Cutting aid to RI -- does it send a message?

Cutting aid to RI -- does it send a message?

By Jim Anderson

WASHINGTON (DPA): U.S. National Security Adviser Sandy Berger,
accompanying President Clinton in East Asia, said last Friday
that nothing has been ruled out in possible U.S. actions against
the Indonesian government now that it was clear the Indonesian
military is directly participating in the violence in East Timor.

The U.S. government took the mainly symbolic action of cutting
off a military training program for about 20 Indonesian military
officers. That led some members of the U.S. Congress to urge for
an end to the much larger economic assistance program for
Indonesia.

But U.S. officials have made it clear that they see no point
in slashing or freezing the economic program, which amounts to
about US$85 million for the current year.

The U.S. Agency for International Development (USAID)
justified their point by saying in a statement, "Indonesia is
grappling with a complex crisis of mutually reinforcing
political, economic and social dimensions. Its success in
resolving the crisis carries significant implications for U.S.
interests."

Although the U.S. program is relatively small compared to
World Bank and International Monetary Fund (IMF) financial
assistance, the United States plays a sort of platoon leader's
role. Other donors, including Japan and the IMF, tend to follow
the American lead, giving Washington a large amount of leverage.

Some Timorese leaders, including Nobel Peace Prize winner and
independence movement leader Jose Ramos-Horta, have called for a
halt in American financial assistance to the Indonesian
government as a powerful signal of international revulsion at
what is going on in East Timor.

But even Ramos-Horta stops short of suggesting an end to
humanitarian aid.

The question then becomes: What is humanitarian aid and what
is not?

For example, there is $13.5 million in the USAID package for
child survival and disease prevention. Surely that is
humanitarian. And so is another $11.5 million in food aid for a
country where one-fifth of the 200 million people live below the
poverty line and the per-capita income dropped last year from
$1,200 per year to $400.

Or what about a program designed to reform and restart the
country's financial system, where banks have virtually ceased
operations? The problem there is that without a banking system,
businesses have ceased to hire workers or stock up on new
supplies, resulting in a 33 percent unemployment rate and a
currency that is worth about one-third of what it was 18 months
ago.

Also, since the financial sector has stopped operating, so
have most of the large commercial distribution systems, resulting
in sky-rocketing food prices, which in turn have fueled looting
and burning of rice warehouses.

Well, then, how about cutting the technical aid designed to
preserve the country's remarkably diverse biological system? That
will help lead to a further destruction of the country's primary
few and an increase in the deliberate burning down of forests to
turn it into agricultural land. Last year, the massive burning
created a huge trans-national haze that affected much of the rest
of the region, including tourism and even air traffic safety.

The same questions arise about other programs in the USAID
package, including the one for strengthening independent media,
promoting human rights, and helping draw up new transparency laws
that would have the effect of ending at least some of Indonesia's
endemic corruption and crony system.

The dilemma appears to be this: A foreign aid program that is
effective is worth keeping, even if it does have the unintended
consequence of giving support to a government that fails to
respond to international outrage.