APEC supports immediate aid for Indonesia

APEC supports immediate aid for Indonesia

KANANASKIS, Alberta (Agencies): Asia Pacific Economic
Cooperation (APEC) finance ministers unanimously agreed the next
disbursement of International Monetary Fund (IMF) aid to
Indonesia shouldn't be delayed "unduly," Canadian Finance
Minister Paul Martin said Saturday.

Martin said that while the ministers agreed at a meeting
Saturday that the next $1-billion tranche from the IMF's $10-
billion standby facility for Indonesia should be released as soon
as possible, the IMF needs to be sure that the new Indonesian
government will pursue economic reform.

"Nobody wants to delay unduly, and everybody wants to ensure
that when the funds are advanced, they will have the maximum
effect," Martin said.

He said comments made during the meeting showed the ministers
want the funds to be released "in a timely way, as soon as
possible."

IMF officials last week postponed an early-June board meeting
during which release of the next tranche of a $10-billion standby
credit facility to Indonesia was to have been voted on.

The announcement that the vote on the $1-billion tranche had
been delayed followed widespread anti-government protests and an
outbreak of violence in Jakarta, which led to the resignation of
Soeharto Thursday and B.J. Habibie's appointment to succeed him
as president.

Martin acknowledged that while some ministers called for an
immediate disbursement of the IMF funds, others cautioned that
the situation should be monitored more closely. However, he said
such differences "were easily reconciled."

The potential for a prolonged delay irks Jakarta's immediate
neighbors, who worry economic conditions in Indonesia could
worsen and unleash a flood of refugees to their shores.

"The United States has the time and the luxury to wait, but I
think, considering Indonesia, (that) it's not fair, not
acceptable, not just, for a country that has undergone such a
traumatic experience," said Malaysia's Deputy Prime Minister and
Finance Minister Dato Seri Anwar Ibrahim.

Anwar also said he will urge the leaders of the IMF, World
Bank and Asian Development Bank to support Habibie. He said it
wouldn't be fair to press Indonesia to do more at this time and
urged officials "not to frustrate the changes that are taking
place."

Japan, whose Finance Minister Hikaru Matsunaga came under fire
once again for his own country's weak economy, agreed. "One month
is a limit. They (Indonesia) cannot wait any longer than that," a
Japanese official said.

Martin said the IMF "... is in the process of monitoring the
situation in Indonesia. The Fund has been encouraged to
recommence the structural loan program as quickly as possible,
and I think there is renewed confidence in a number of the
measures and in the members of the new cabinet that have been put
in place.

"But I think that at the same time we mean to make sure that
those reforms are going to be put in place and that the situation
evolves in a way that it should," he added.

He said measuring the extent of Indonesia's political
stability as a condition for resumption of the IMF lending
program was "really a judgment call...."

He said it is "very clear that economic reforms without
political reforms and the (implementation) of a strong social
package is simply not going to last."

The APEC groups Australia, Brunei, Canada, Chile, China, Hong
Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan,
Thailand and the United States. Peru, Russia, and Vietnam are
observers and will join APEC later this year.

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