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U.S. releases humanitarian aid to Indonesia

WASHINGTON, March 24 Kyodo

The U.S. government released Tuesday a humanitarian aid package to Indonesia totaling more than 70 million dollars to restore stability to the country which is suffering from its worst economic crisis in decades.

Stuart Eizenstat, undersecretary of state for economic, business and agricultural affairs, told a press conference that the package is intended to ''restore stability and prevent the financial and foreign exchange crisis from becoming an inflationary crisis.''

The new aid programs include 56 million dollars in food and medical supplies, he said.

The sum is in addition to more than 520 million dollars in existing programs, such as 45 million dollars in development assistance for the Indonesian people, Eizenstat said.

He said Indonesia has been struggling under the worst drought in 50 years, caused by El Nino.

''Higher prices combined with lower incomes caused by the economic downturn will make food and other essential goods increasingly unaffordable by the poor,'' he said.

The new programs also include 14 million dollars in loan guarantees to support labor intensive, small-scale infrastructure-related projects, while financial assistance will be offered to help 12,500 Indonesian students in the United States complete their studies so that they can return home to rebuild their country, Eizenstat said.

He said the aid programs are not tied to conditions being discussed between the Indonesian government and the International Monetary Fund (IMF) on the implementation of Indonesia's reform program.

''We are not trying to tie this directly or indirectly to any political considerations or the IMF. This is for the Indonesian people,'' he said.

He said the World Bank, other international institutions and interested countries will hold a meeting of experts April 1 to reassess Indonesia's humanitarian needs.

Japan, the U.S., Australia and European countries, which are major donors to Indonesia, are expected to attend the meeting.

Australia recently proposed that countries like Japan and the U.S. cooperate in crafting a humanitarian aid program for Indonesia.
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Publication:Asian Economic News
Date:Mar 30, 1998
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