RI will need int'l help beyond 1999: Downer

RI will need int'l help beyond 1999: Downer

CANBERRA (AP): Indonesia will continue to need international
financial aid "over the coming year and beyond," Australian
Foreign Minister Alexander Downer said yesterday.

Downer, who visited Indonesia last week, said in a speech that
President B.J. Habibie and his government are facing very
difficult times.

"Undertaking a once-in-a-generation political transition and a
political reform process in the midst of a severe regional and
economic downturn is a daunting task," Downer said.

"Indonesia will continue to need international financial
support over the coming year and beyond to allow the government
to see through its promise of fresh parliamentary and
presidential elections," he added.

But Downer also said the steps the international community is
already taking to help Indonesia provide solid grounds for
optimism.

"Ideally these will, through the creation of a broad-based
leadership, establish the basis for a renewal of investor
confidence and economic revival in the long term," he said.

Downer, who was addressing Australian exporters in Melbourne,
said the East Asian region as a whole was still facing very real
challenges.

But he urged business not to lose faith in the region.

"It is important to ensure that the previously excessive
rhetoric regarding the East Asian economic miracle does not swing
too far the other way and become overly pessimistic," he said.

Australia has pledged US$1 billion to an International
Monetary Fund (IMF) rescue package for Indonesia.

It has also stepped up bilateral aid to its northern neighbor
since the regional crisis began last August.

Indonesia wants the United States to contribute directly to an
additional $4 billion to $6 billion rescue package the IMF is
putting together to help the Asian nation face a severe economic
crisis.

Indonesia, the world's fourth most populous nation, has
already been promised a $43 billion IMF bailout that is being
paid in installments.

The United States, Japan and Australia agreed to participate
in the major bailout package with so-called second line of
defense funds.

Indonesia expects its economy to contract by 13 percent to 15
percent this year, the first time the economy has shrunk since
1963.

The country's currency, the rupiah, has lost 80 percent of its
value against the dollar.