Travel: But political unrest could pose trouble

The Asian financial turmoil is great for holders of foreign currency but something more like a nightmare for most citizens of the countries whose currencies have been decimated. The downside for travellers could be political unrest. Steven Vines reports.

The longer-term impact of the Asian economic crisis may be to bring simmering political tensions in the region to the boil. "It's a great time to come here unless you have a concern about unrest", says Diana Moxon, a travel consultant based in Jakarta.

In Indonesia, where the financial crisis has hit hardest, the army has been put on a stage-3 alert. This means it is on alert for trouble even though it has yet to break out.

However, tension is very close to the surface. It was seen in food shops this week which were swamped by anxious shoppers worried that food might disappear and that their money would become worthless.

If the International Monetary Fund (IMF) has its way, the government will be forced to cut the subsidies, primarily the fuel subsidy, which make the difference between millions of people living above or below the poverty line.

A stockbrokers' report issued in the capital Jakarta yesterday stated that 80 per cent of public companies would be bankrupt if foreign banks refuse to roll over loans due for repayment in the near future.

"There are no riots on the streets, but you can feel an atmosphere of tension," said a Jakarta resident. The tension has already boiled over in Bandung, a city with a large student population, where minor rioting was reported earlier in the week.

The usually meek local media has started openly to criticise President Suharto, whose authoritarian government has no ready-made means of transition to another form of rule. The President and his entourage, who are widely perceived as having made fortunes during his period of office, will not disappear quietly into the night.

Meanwhile, in Thailand, the financial crisis has already brought down one government and brought in another headed by the generally well-regarded Chuan Leekpai. Because Mr Chuan has a reputation for honesty, expectations of his ability to put things right are high. Yet the local currency and stock market are caught in a relentlessly declining spiral, and companies are closing.

The new government has a lot of enemies, some of whom are in the military and have the ability to cause considerable disruption. In Malaysia, the Prime Minister, Mahathir Mohamad, still has a firm grip on government despite tensions within the ruling party and an undercurrent of criticism over his outspoken attacks on foreign investors which have fuelled the massive slump in Malaysian financial markets.

Holidaymakers in South-east Asia need have no immediate concerns about running into civil unrest, but they should be aware of the tension beneath the surface.