Jan Pronk provokes controversy over Indonesia in Europe

By Aboeprijadi Santoso

THE HAGUE (JP): As the economic crisis in Asia continues to provoke discussion in Europe, a controversy has arisen in the Netherlands over the provision of credit for Indonesia.

The Dutch minister of development co-operation Jan Pronk said that the billions of U.S. dollars credit pledged by the IMF and the Dutch government should be tested against the willingness of President Soeharto's government to implement the IMF reforms.

Earlier, upon his return from a brief visit to Indonesia, Dutch foreign minister Hans Van Mierlo said that his government would consider providing two billion guilders credit to enable Indonesian firms to continue operations.

However, last Sunday, in a statement issued before a local party meeting in the city of Nijmegen, Pronk seriously questioned the commitment to reforms among "Soeharto's clique" whom, he said, he "would not trust for a dime".

No financial aid should be provided before Soeharto has given "hard commitments" on the ways it will be spent. "It should definitely be ascertained," he explained, "that the reforms will really be implemented. Soeharto has not done it so far, and I have no reason to assume that he, as of today, will suddenly act differently".

Pronk's use of the term "Soeharto's clique" in particular, has been described as blunt and undiplomatic. It stirred controversy among his colleagues in the cabinet.

A spokesman from the foreign affairs ministry in The Hague said last week that Pronk's "exceedingly critical" statement should not be considered indicative of official Dutch government policy.

Minister Van Mierlo made clear to Pronk that his comments "were not stated on behalf of the cabinet and did not reflect the views of the cabinet", the spokesman said.

Pronk made his comments following Soeharto's statement on the plan to use the IMF aid to secure the rupiah at a fixed exchange rate to the U.S. dollar.

Funds directed to Indonesia, "should not be spent on useless and large scale projects, or selected short term debts. That's purely a waste. Projects to promote employment and to seriously rationalize the banking system should instead be supported," Pronk said.

Although the Netherlands supports the European Union's endorsement of the IMF plan, it has not yet made any decision on the possibility of bilateral Dutch aid.

The Dutch cabinet fully supports the IMF terms and believes that the Indonesian government should work toward price stabilization, strengthening its financial reserves, increasing liberalization of its economy and fighting corruption.

No money should be wasted, the foreign minister's spokesman agreed, but "one would do well to remember Pronk's own basic assumption -- that political criticism of foreign regimes should not disadvantage the poorest inhabitants of the country".

Meanwhile, Dutch minister of finance Gerrit Zalm came out in support of Pronk's objection to Van Mierlo's intention of providing additional Dutch support.

The IMF and the G-10 group of the ten most industrialized nations should take the lead in helping Indonesia, Zalm said.

Any extra bilateral initiative would only weaken the IMF's bargaining position in negotiation with Soeharto's government, he said.

Both Pronk and Zalm intended to raise the issue during the cabinet's weekly meeting last Friday, however the meeting was canceled because of a visit to Brazil by Van Mierlo.

Pronk had been at the center of Dutch-Indonesian controversy in the past. His protest against the Dili incident of 1991 in East Timor and his plan to freeze Dutch aid to Indonesia provoked strong protest from Jakarta and caused the international donor conference for Indonesia (IGGI) to become defunct.

Parliamentary support for Pronk's human rights protest later turned to criticism. Pronk has had a low profile in Indonesian matters ever since. But three weeks ago he expressed his concerns on the plight of the Indonesian people, who are afflicted by the economic crisis.

The controversy must also be seen in the light of party campaigns for local elections held last Wednesday and forthcoming parliamentary elections in May.

Pronk's party, the labor party (PvdA), is in the lead, while Van Mierlo's liberal party, the D-66, PvdA's junior coalition partner, is in serious declining.

Van Mierlo's move against Pronk is viewed as an attempt to encourage votes for the D-66, the so-called "party of reasonable people", among whom Pronk is not particularly popular.

Curiously enough, Pronk received unprecedented support from some influential liberal circles and his former adversary, the conservative party (VVD), including the finance minister Zalm.

The leading Dutch liberal newspaper NRC Handelsblad, usually close to the VVD, recognized the prudence in Pronk's assumption that the idea of a CBS may have been intended to help industries owned by well connected officials and families in Jakarta repay their debts.

However, Pronk "is not in the right position" to issue blunt criticism of the Soeharto government publicly, it said.

Even if it was wise to do so now, the foreign minister -- not the minister of development co-operation -- should be the one to issue criticism, the paper's editorial said.

Speaking on the financial obligations of foreign relations, another area of conflict between Van Mierlo and Pronk, Prime Minister Wim Kok said, "the minister of foreign affairs is the captain of the whole ship".

But, at least one long time Indonesia watcher, the prominent church minister Pieter Paul Van Lelyveld, sees the controversy as having future implications for the two countries.

"Minister Jan Pronk and President Soeharto clearly dislike each other very much. As long they remain part of their respective governments, Dutch-Indonesian relations will not return to a normal and natural state, of the sort expected between two friendly nations".