Peter Hartcher – The international community's $US43bn ($64bn) package for support of Indonesia is a waste of money, according to a US analyst and former senior policy maker in the Bush Administration.

With the Soeharto Government now negotiating to win back the support of the International Monetary Fund, the president and founder of the Asia-Pacific Policy Centre in Washington, Doulas Paal, said the IMF should walk away from Indonesia.

"We ought not to have an IMF program for Indonesia, it will just waste taxpayer money," Mr Paal said.

While he advocated aid for the Indonesian people, he opposed financial support for the Soeharto regime. The international community should accept that the regime was in terminal decline, he said.

Mr Paal was special assistant to Presidents Bush and Reagan for national security affairs and senior director for Asian affairs on the National Security Council. Previously, he specialised in Asian affairs at the CIA and the State Department.

"The fear that all powers have is that they want stability, but Soeharto can't deliver stability and we don't know anybody else who can deliver," Mr Paal said in an interview with The Australian Financial Review. "I think events will end up being led by the rabble.

"Great powers have tremendous difficulty with situations like this. Look at the example of the Shah of Iran. He made it difficult for any successor to emerge and we are still feeling the consequences of that."

In the case of the Philippines, Mr Paal said, the US was fortunate to have had Corazon Aquino to support "as a working solution" in opposition to the dictator Ferdinand Marcos.

"But in Indonesia, we are not even close to having anyone like that there." Instead of supporting the Soeharto regime through an IMF program, the international community should concentrate their efforts on other areas, according to Mr Paal.

"First, we should do whatever we possibly can to extend aid at the provincial level," he said. "Food aid is easy to keep up because the farm lobbies always support it. Just writing cheques is harder politically.

"Number two, we should try to insulate others from Indonesia's collapse. We should be looking at how to limit future exposures and unwind existing exposures." IMF technical support for economic and financial reform might be supportable, Mr Paal said, but not financial support.

He said the security consequences of the collapse of the regime should be able to be contained within Indonesia and were unlikely to spill over into neighbouring countries.