U.S. to resume support for loans to Indonesia: Albright

U.S. to resume support for loans to Indonesia: Albright

WASHINGTON (Reuters): United States Secretary of State
Madeleine Albright announced Wednesday that Washington would
resume support for international lending to Indonesia.

"We will support proposals for new World Bank and Asian
Development Bank lending to Indonesia," she said in a speech to
the Asia Society in New York.

The United States withheld support for international lending
to Indonesia as political and economic turmoil engulfed the
country in May and led to the resignation of president Soeharto
and his replacement by current President B.J. Habibie.

An International Monetary Fund team is now in Jakarta to
finalize the country's new budget and "we hope that an agreement
can be reached soon that will release the next tranche of funds",
Albright said.

The IMF was due to disburse a further balance of payments loan
of about US$1 billion early this month. But it was sidetracked by
the upheaval over Soeharto.

Albright said it was too early to know if Habibie's new
government would pursue and succeed in making political reforms
based on democratic principles.

"But it is not too early to reaffirm America's commitment to
do all we can to help the Indonesian people. This is the right
thing. It is also the smart thing because prospects for a stable
transition to democracy will increase if humanitarian needs are
addressed," she said.

As a result, in addition to backing international lending, the
United States will pledge $65 million in food and medical
supplies for Indonesia as a supplement to U.S. assistance
programs already underway, she said.

"We are considering how best to use our support in the months
ahead in areas such as civic education, development of a free
press, the promotion of ethnic tolerance and technical assistance
for elections," she said.

Also, the full complement of American personnel in the U.S.
Embassy in Jakarta has been restored, she said.

Staff were withdrawn when the political turmoil and violence
erupted.

She praised Habibie for assembling a strong economic team and
said he had also taken steps to address the longstanding problem
of East Timor.

"The United States would strongly support efforts by the new
government to build a real consensus on East Timor through
additional confidence-building measures, a reduced military
presence and a genuine dialog with its people," she added.