Lee Siew Hua, Washington – The United States has been urged to help Indonesia to regain the world's confidence and help it to improve its relations with the International Monetary Fund.

Prime Minister Goh Chok Tong said the US should take these steps when he spoke of the need for Washington to pay closer attention to East Asia amid unsettling political changes and despite US frustrations with slow reforms in Asean.

He told the US-Asean Business Council at its annual dinner: "When the political situation in Indonesia stabilises, the US, with its friends and allies, must help Indonesia regain international confidence. "We must help it improve its relations with the World Bank and IMF, and encourage investors to revisit Indonesia."

Otherwise, Indonesian instability would affect US allies such as Australia, Japan and South Korea, he cautioned. Sitting beside vital shipping lanes, a resentful Indonesia would be a global problem.

The most important issue in Indonesian politics today was the nature of the new political order, he said. It would take years before a new balance was established among all political groups, from the presidency, to the military, to separatist groups, he noted.

He said a consensus had emerged among Indonesia's elite that political change was needed to restore growth and stability. He said: "The expectation is not that a new government will immediately solve all problems. Given the complexity of Indonesia's problems, the hope is that a modicum of stability will be restored at the centre. This would at least allow a start at addressing Indonesia's problems in a coherent manner and at regaining investors" confidence."

While developed countries had established institutions to maintain stability during political change, East Asia's institutional framework was far weaker, and Indonesia was a case in point, he said.

He recalled that a senior official from the previous US administration told Singapore leaders in 1998 that Indonesia needed a "discontinuity" in the way its government was run.

He said: "Singapore leaders responded that it was best to bring about change gradually. No successor president would be as strong as Suharto to enforce the tough conditions that the IMF required. Indonesia is now living with the consequences of discontinuity."

Indonesia was unique, he said. "No other major East Asian economy has such a brittle system or is likely to face a crisis of such magnitude and complexity."