Tony Wright, Jakarta – The Prime Minister has told Indonesia's President Soeharto that Australia, in the spirit of "regional mateship", stands ready to dig deep as part of a major international rescue package for Indonesia's ailing economy.
Mr Howard would not put a figure on Australia's proposal, but indicated that it was likely to be as much, and possibly substantially more, than the $US1 billion it has already provided to prop up Thailand's economy.
However, he said Australia's assistance would be part of an arrangement supervised by the International Monetary Fund (IMF) and was conditional on Indonesia accepting that it had to abide by terms set by the IMF.
Mr Howard's offer came during an hour-long talk with Mr Soeharto here yesterday.
He said it was "an important element of Australia's role as a fully active participant and player in the Asia-Pacific region".
"It is the act of a friend, it is an act of a good neighbour, it is an act of a nation willing to assist another nation with which it has very long-term interests and long-term association," he said.
"It is also in the interests of the Australian nation and the Australian people that the Indonesian economy be strengthened and be supported - Indonesia is increasingly buying Australian goods and services.
"I regard the offer I made today to the President as a very important manifestation of the closeness of that relationship."
Mr Howard's offer came less than 24 hours after Mr Soeharto's surprise announcement that Singapore had offered arescue package of $US10 billion, and that Malaysia had offered $US1 billion.
But Indonesian officials said the money from Malaysia would come with no strings attached, and was widely seen as an attempt to allow Indonesia to bypass stringent economic reforms that would come with IMF intervention.
IMF conditions would be likely to require that Indonesia crack down on its generous bank credit policy and reduce protection on such projects as its national car - production of which is owned by Mr Soeharto's son Tommy - and its domestic aircraft industry, which is supported by the Science Minister, Dr B.J. Habibie, a protege of the President.
Indonesia's economy is reeling from a collapse in the value of its currency, the rupiah,and is suffering a crisis in agriculture and lack of confidence among international investors following drought and uncontrolled forest fires that have spread a choking haze across South-East Asia.
Mr Howard said Australia's help would come either as "an initial support mechanism" or in the form of a "stand-by credit facility".
Last month Australia provided $US1 billion to Thailand in the form of a currency swap in an attempt to halt the slide of the Thai baht.
Asked how much Australia was willing to stake for Indonesia, Mr Howard said he would "not get into amounts".
Asked whether he believed Indonesia would be willing to accept an IMF package, Mr Howard said he had detected from Mr Soeharto that Indonesia was "very close to reaching agreement" on the IMF proposal.
Mr Howard said he had also raised the issue of human rights in East Timor, and had urged Indonesia to give the East Timorese a greater say in their own affairs.