U.S. to offer $56m in aid to Indonesia

U.S. to offer $56m in aid to Indonesia

WASHINGTON (Dow Jones): The U.S. will offer US$56 million in food and medical supplies to meet immediate humanitarian needs in Indonesia, a government official said Tuesday.

Stuart Eizenstat, undersecretary of State for economic, business and agricultural affairs, said the U.S. has significant national security and economic interests in the Asian country.

A fact sheet distributed after Eizenstat briefed reporters said the U.S. Agency for International Development will make available $25 million in PL-480 Title II funds to provide food aid to be distributed by private voluntary organizations to rural poor in eastern Indonesia, where the economic crisis has been exacerbated by an ongoing drought.

In addition, USAID will provide $6 million in essential medical supplies to meet immediate needs of the poor.

Furthermore, the U.S. Department of Agriculture will make available $25 million in concessionary loans under the PL-480 Title I program for public sector purchases of U.S. food.

The precise amounts and commodities must be negotiated, but the assistance will facilitate imports of products that USDA has identified as being in short supply - such as wheat, soybeans and rice - as a result of drought-induced crop reductions, much less favorable exchange rate and the general economic downturn.

In addition to the new programs, USAID and USDA have other, ongoing programs totaling about $520 million designed to help Indonesia.

Eizenstat said efforts are being made to restore stability in Indonesia and prevent worsening of the economic crisis.

"We continue to be concerned about the potential humanitarian effect of this crisis on the Indonesia people, particularly the poorest members of society," he said.

"This crisis comes at a time when the country is also coping with the worst drought in 50 years brought on by El Nio," he said. "Higher prices combined with lower incomes caused by the economic downturn will make food and other essential goods increasingly unaffordable by the poor.

"Although multilateral and bilateral balance of payments financial assistance cannot move forward absent the appropriate policy framework and implementation, humanitarian assistance can and should move forward as necessary."