Japan to push for continued aid to RI

Japan to push for continued aid to RI

BIRMINGHAM, England (AP): The turmoil in Indonesia indicates the need for political and economic reform, but should not derail aid programs through the International Monetary Fund, a senior Japanese government official said Friday.

The official, briefing reporters on Japan's position at the G- 8 summit of the world's richest countries, acknowledged that in providing aid through the IMF, it is important for recipient countries to abide by rules of transparency.

But he added that donor countries must avoid putting too many conditions on the aid - or being "preachy" - because that can fuel nationalist reactions.

Indonesia has emerged as a major concern at the summit, with riots and looting reaching their worst level in decades and growing calls for President Soeharto to step down.

The riots were touched off by sharp government-ordered increases in the prices of basic goods and services last week.

The austerity measures were a condition of the IMF's US$43 billion aid package to bail out the Southeast Asian nation.

Soeharto on Friday rolled back the price hikes on gasoline and other essential fuels.

The Japanese official, who spoke on condition of anonymity, called for the utmost restraint from the Indonesian government and the protesters so that the situation will not deteriorate further.

He refused to comment on whether Japan's government wants Soeharto, who has been in office for more than three decades, to resign.

Instead, Japan believes it is important for the leaders at the G-8 to take a more positive approach by expressing their confidence in the medium- and long-term economic prospects of Asia.

Despite the current financial crisis throughout the region, the economic fundamentals in the countries are strong, he said.

Japan has by far been the biggest provider of aid to the hardest-hit countries in the region, pumping in more than US$42 billion.