Cohen urges Indonesia to act quickly

Cohen urges Indonesia to act quickly

KUALA LUMPUR (Reuters): U.S. Defense Secretary William Cohen
urged Indonesia yesterday to move quickly to bring its economy in
line with the International Monetary Fund's policy prescriptions.

"It's important for Indonesia to act quickly to try to conform
its economic structures as closely as possible to the IMF
recommendations," Cohen told a news conference in the Malaysian
capital.

Cohen, who met Malaysian Prime Minister Mahathir Mohamad
earlier on Monday, was scheduled to travel on Tuesday to Jakarta
where he was to confer with President Soeharto.

The U.S. defense secretary spoke as IMF representatives and
senior U.S. officials led by Deputy Treasury Secretary Lawrence
Summers were in Jakarta to discuss Indonesia's efforts to
overcome the effects of a regional economic crisis.

Cohen, asked to comment on the possibility of race riots in
Indonesia or migration of disgruntled citizens, said it would be
counter-productive to speculate.

He said Washington was aware that IMF-led rescue plans can be
austere and lead to difficulties in some countries, but that they
offered the best chance for those economies to stabilize.

Indonesia, Thailand and South Korea have turned to the IMF for
emergency aid.

"For the moment, they need a stabilizing force which comes
from IMF assistance," Cohen, flanked by Malaysian Deputy Prime
Minister Anwar Ibrahim, said. "It's the best hope that they have
for recovery."

Cohen said that in his talks with Mahathir and Anwar at the
outset of his seven-nation Asian tour, he did not suggest
Malaysia needed to turn to the IMF for emergency aid.

"I did not suggest to Dr Mahathir or the deputy prime minister
that they should invoke the need for IMF funding," he said. Anwar
later told the news conference that Malaysia had decided it did
not have to resort to IMF aid.

Cohen said the United States had funneled emergency assistance
to the region through the IMF-led programs, and he did not
anticipate that Washington would provide direct funding to the
region.

The U.S. defense chief said Washington was also trying to help
troubled Asian countries by allowing them to stretch out or defer
payments for weapons.

Anwar said the economic slowdown had forced his country to
revise some earlier defense spending projections. "We have agreed
to defer many earlier commitments," he said, adding that Malaysia
still intended to have an efficient, modern military force.

Cohen said he did not expect the region to reject U.S.
military cooperation because of its economic woes. "There is a
very strong support for maintaining the American presence," he
said.