Malaysia pledges $1b in aid for Indonesia

Malaysia pledges $1b in aid for Indonesia

JAKARTA (JP): Malaysia pledged US$1 billion in assistance to
Indonesia yesterday to supplement the currently negotiated
financial package from the International Monetary Fund (IMF) to
restore confidence in the Indonesian economy.

Malaysian Deputy Prime Minister and Finance Minister Anwar
Ibrahim, who was on an unannounced one-day visit to Indonesia
yesterday, said he believed that Indonesia's economic
fundamentals were sound and the current crisis was a matter of
market confidence.

"We believe in Indonesian economic fundamentals and support
efforts to restore confidence," Anwar said after a one-hour
meeting with President Soeharto.

"We've also said that we're ready to provide funds to help
restore confidence ... specifically $1 billion," he said.

Anwar added that he would follow up on his country's financial
offer with his Indonesian counterpart, Minister of Finance Mar'ie
Muhammad.

He said the two countries had also agreed to take mutual
steps, along with other members of the Association of Southeast
Asian Nations (ASEAN), to fight currency speculation.

Anwar said he was visiting Indonesia to exchange information
on the latest economic developments and the monetary crisis and
also to thank Indonesia for steps taken to tackle the haze
covering the region.

The haze has been blamed on forest fires raging through large
tracts of land in Indonesia.

The meeting followed last week's unannounced visit by
Singaporean Prime Minister Goh Chok Tong, which resulted in a
pledge by Singapore to help Indonesia with financial assistance
to restore market confidence.

Minister/State Secretary Moerdiono said at the time that the
Singaporean aid would further strengthen Indonesia's foreign
exchange reserves and its currency.

Bank sources in Jakarta said yesterday that Singapore's
financial aid to Indonesia could amount to at least $5 billion.

On Malaysia's commitment, Moerdiono said yesterday it would be
separate from a financial package currently being negotiated with
the IMF.

"And of course the President welcomed Malaysia's goodwill as a
manifestation of sound bilateral relations in the spirit of
ASEAN," Moerdiono said.

When asked if Australian Prime Minister John Howard would also
pledge similar aid to Indonesia, Moerdiono said: "So far, there
is no indication of that."

Howard will make a two-day state visit, starting today, on his
way back from a meeting of the Commonwealth states in Edinburgh.

Yesterday, Moerdiono also denied reports that the IMF team had
left for Washington, saying that the team was still in Jakarta in
their final stages of talks with Indonesian officials.

He said the government would soon announce measures to restore
confidence in conjunction with IMF's financial assistance.

But he reiterated that the measures being discussed were
Indonesia's own programs and would be supported by the IMF.
(prb/rid)

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