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.