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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