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Canberra, Jakarta in falling-out

Source
Australian Financial Review - April 17, 1998

Geoffrey Barker – Australia has lodged two angry high-level diplomatic protests with Jakarta following disclosures that the Indonesian Vice-President, Dr J.B. Habibie, backed Malaysia's veto on Australian membership of the Asia-Europe Summit (ASEM).

The Australian protests stressed Canberra's sense of betrayal by Indonesia after efforts to assist Jakarta in its financial crisis dealings with the US, the World Bank and the International Monetary Fund.

Given its eagerness to join ASEM, Canberra was outraged by the actions of Dr Habibie. Australia will not now join ASEM before its third meeting in Seoul in 2000.

Moving to mark Australia's lack of confidence in the Indonesian Vice-President, and a new willingness to put Indonesia on the defensive, the Minister for Foreign Affairs and Trade, Mr Alexander Downer, has told Jakarta he was "personally hurt" by Dr Habibie's actions at the ASEM2 summit in London this month.

It is understood Mr Downer was particularly irked because of his strong personal efforts to assist Indonesia. With senior officials, Mr Downer made an urgent unscheduled trip to Washington and Asian capitals last month urging the IMF and World Bank to be flexible in dealing with Indonesia and urging Japan to offer more help. The Australian protests were revealed in a leaked cable sent by the Indonesian Ambassador to Australia, Mr Sastrohandojo Wiryono, to the Indonesian Foreign Ministry earlier this month. Existence of the cable was reported earlier this week by the Indonesian newspaper Kompas.

Mr Wiryono reports in the cable, written in Indonesian, that he was called first by the Secretary of the Department of Foreign Affairs and Trade, Mr Philip Flood, on April 6. The message that Mr Downer was "personally hurt" was delivered in a later telephone call to Mr Wiryono by a DFAT assistant secretary, Mr John Dauth. Mr Wiryono reported the words "personally hurt" in English.

Details of the cable, passed to The Australian Financial Review yesterday, suggested Australia learnt of Dr Habibie's support for Malaysian Prime Minister Dr Mahathir from Malaysian sources at the ASEM2 meeting. Australia had expected Indonesia to fight for Australia's admission, and was deeply offended by Dr Habibie's willingness to back Dr Mahathir. Yesterday the Indonesian Foreign Minister, Ali Alatas, denied Indonesia was not supporting Australian membership of ASEM. "If there was that impression, it is not true", he said. But Mr Alatas conceded that Vice-President Habibie had participated in talks in London "as if Indonesia is now not supporting Australia anymore".

The Australian Department of Foreign Affairs and Trade moved to paper over the dispute, saying that Dr Habibie had spoken to the Australian Ambassador to Djakarta, Mr John McCarthy, reaffirming Indonesia's support for Australia's membership of ASEM. ASEM is the key body through which Asia and Europe are seeking to develop closer economic ties. But Australia has little confidence in Dr Habibie, who was appointed by President Soeharto despite widespread Indonesian and international concern. Canberra believes Dr Habibie was unduly influenced by the anti-Australian Dr Mahathir at the London meeting. His presence will be an ongoing irritant in Australia-Indonesia relations.

Australia acknowledges Dr Habibie did not specifically speak against Australia's admission to ASEM. But he said he had discussed the issue with Dr Mahathir, and believed ASEM needed "quality not quantity" and should consolidate its membership. "The question of expansion is not one we are pursuing at present," he reportedly said.

Mr Flood told Mr Wiryono that Australia was "puzzled" by reports that Dr Habibie had supported Dr Mahathir, in vetoing Australian entry to ASEM.

He said Australia had been "very helpful" to Indonesia in its dealings with the International Monetary Fund and thought it was "a friend in good standing with Indonesia".

Less than two weeks ago Australia agreed to bring forward the release of $US300 million of its $US1 billion loan pledge to Indonesia provided Indonesia accepted economic reforms demanded by the IMF.

In doing so the Government set aside grave concerns over expensive family and crony projects in Indonesia and over the apparent unwillingness of Dr Habibie to eliminate import restrictions which the IMF demanded be removed.

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