U.S. to donate 1.5m metric tons of wheat to RI

U.S. to donate 1.5m metric tons of wheat to RI

WASHINGTON (Reuters): The United States will donate up to 1.5 million metric tons of wheat to Indonesia over the next eight months as part of a $7.9-billion international effort to support democratic reforms,

Indonesia is "much too important a country to let try to muddle through a very, very difficult situation," said Brian Atwood, administrator of the U.S. Agency for International Development, in announcing the assistance.

By the end of the year, as much as 100 million people -- or roughly half of Indonesia's population -- could be "living in extreme poverty," Atwood said.

But with the new aid, Indonesia may be able to emerge from its financial crisis in less time than it took the United States to climb out of its 10-year Great Depression, he said.

The wheat donations, which are valued at $190 million, include initial shipments of 500,000 tons which are expected to arrive by the end of the year.

The United States is prepared to donate up to one million tons more of wheat for delivery by next spring if that would not disrupt commercial sales or hurt local farmers by flooding the market with unneeded food, Atwood said.

At a separate event, U.S. Agriculture Secretary Dan Glickman dismissed charges made by Australia that U.S. plans to donate a total of 2.5 million tons of wheat around the world to reduce a domestic surplus were tantamount to "dumping."

"We're not doing anything insidious," Glickman told reporters, noting that the United States has a long history of donating surplus farm goods. "There is nothing new here. The United States is the most giving nation in the world."

Altogether, US AID is providing approximately $300 million in aid to Indonesia, including the prospective wheat donations and $50 million worth of rice and other food items that the agency is already in the process of buying.

Other aid includes $47 million in development assistance, $10 million in disaster aid and $5 million in loan guarantees, Atwood said. The U.S. Agriculture Department also will provide $25 million in long-term, low-interest loans to help Indonesia purchase additional foodstuff.

The U.S. aid is part of an overall package of $7.9 billion in international aid for Indonesia pledged by more than 30 donor countries in Paris on Wednesday at a conference organized by the World Bank.

Atwood said those pledges, which were more than World Bank officials expected, reflect "a very, very good performance on the important of the international community."

But Atwood cautioned that it was important that Indonesia stay on the path of democratic reform. Without "continued movement toward that goal, then it will be extremely difficult" for the Indonesian economy to recover, he said.

While no explicit conditions are attached to the new aid, "I'm sure the international community will want to reconsider its position if there is any hesitancy" on Indonesia's part to move toward democracy, Atwood said.

In Sydney, Australian said yesterday the United States had agreed to structure an aid plan to give Indonesia 1.5 million tons of wheat in a way that would avoid damaging Australian wheat interest in one of its key markets.

"The Americans have given us an undertaking that their development assistance program for Indonesia won't in the area of wheat cut across our commercial wheat market," Australian Foreign Minister Alexander Downer told reporters.