Michael Millett, Tokyo – International donors will provide another $US4.8 billion in aid for Indonesia, despite expressing serious misgivings about its political, economic and environmental performance over the past year.
The financial commitment – the amount Indonesia had requested to help overcome its chronic budget shortfall – came after key Indonesian officials vowed to work harder on reforms across virtually every aspect of public administration.
The struggling nation has fallen well short of its earlier pledges to overhaul the economy. It has also attracted international criticism over its apparent reluctance or clear inability to control the military and pro-Jakarta militia who are causing havoc in West Timor.
Indonesia's errant behaviour triggered pre-conference warnings that future aid could be jeopardised if the administration of President Abdurrahman Wahid did not "lift its game". Officials involved in the Consultative Group on Indonesia meeting in Tokyo said this message had been reinforced at the two-day gathering.
Jakarta had been given "a strong political message" about the international community's impatience. But they also conceded privately that Indonesia's fragile economic and political state made it impossible for the threats on aid to be carried out.
"There was a clear acknowledgment at the CGI that a lot more needs to be done and at a much faster pace," an Australian official said. "The international community is not satisfied that the authorities have done all they can to ensure the safety of the refugees and to disarm the militias.
"They [the Indonesian Government] have assured us that things are being done, we must accept this. But there was also an acceptance that pushing too hard would be counter-productive."
Donor countries, including Australia, are concerned that tightening the financial screws would make life even harder for the Wahid Government, further frustrating the reform program.
Withdrawing aid would simply involve more hardship for the general population, and could inflame dangerous nationalist sentiment. "The stability of the country is important to everybody," the Australian official said. "You don't want a situation where too many opportunities are given to madcap nationalists to say 'We don't want the West, we don't need the Americans'."
Sources said the refusal of Japan, as host nation, to countenance "conditionality" as part of the relief package had forced other nations, particularly the US, to soften their position. However, they pointed out that Indonesia had been taken to task over its "backsliding" in a number of reform areas. The donor countries had also extracted new pledges on painful and politically sensitive corporate debt restructuring.
[On October 20 the Straits Times reported that some 100 protesters staged a noisy but peaceful rally outside Jakarta's presidential palace. Organisers accused Mr Abdurrahman of using economic changes prescribed by international lenders to make deals with rich business interests at the expense of ordinary people who are bearing the brunt of Indonesia's ongoing economic crisis - James Balowski.]