Jakarta – A senior US envoy yesterday lauded the efforts of President Megawati Sukarnoputri's government to reform the Indonesian economy, nurture democracy and combat terrorism.

US Trade Representative Robert Zoellick lavished praise on the President and said her administration's success was vital to America's interests in South-east Asia.

He visited Jakarta a day after touring Batam and Bintan, where he announced that the Indonesian islands would be included in a free trade pact expected to be signed between the US and Singapore later this year.

Under the deal, certain high-tech electronic goods made on the two islands will be regarded as Singapore-made products. They will enjoy the dual benefits of cheaper labour and duty-free access to American markets.