Subject: Aust. Fin. Review: Aid Donors Losing Patience with Indonesia

Australian Financial Review Monday, September 25, 2000 -front page-

Aid donors losing patience with Indonesia

By Geoffrey Barker

International aid donors are "ready to snap" over Jakarta's apparent reluctance to control marauding militias in West Timor, according to highly placed Australian officials.

If Australia and other members of the World Bank-chaired Consultative Group on Indonesia, which meets in Tokyo next month, fail to maintain aid levels, relations between Canberra and Jakarta may be threatened again.

But Western anger over the killing earlier this month of three United Nations refugee workers and Indonesia's apparent hesitation in cracking down on militia violence is such that there has been a hardening of attitudes in Western capitals, the Australian officials said.

Following last week's visit to Jakarta by the United States Secretary of Defence, Mr William Cohen, the US has told Australia that it remains seriously concerned about the continuing militia violence and would support stronger action against Indonesia.

In the past, Australia, which is one of Indonesia's largest aid donors, has supported the maintenance of international aid on liberal terms and has opposed US calls for tougher conditions.

This time, though, the situation is under review, a senior source said.

Australian officials consider that President Abdurrahman Wahid is caught in a vise between military elements that support the militias and the international community, which has become increasingly impatient since the killing of the UN workers.

"We have been burned off too often in the past by the Indonesians over the militias ... So we are being polite but tough to ensure this time they really deliver.

"We believe the Indonesians have the capability to deal with the militias. It's just a matter of whether they have the will - particularly on the ground in West Timor," the official said.

But if no action is taken against the militias, or if there is further harassment or killing of UN workers in West Timor, Australian thinking is that the Tokyo meeting should be postponed, raising questions about continuing bilateral aid, World Bank assistance and about future IMF programs.

Such steps would be devastating for Indonesia's struggling economy and, given Australia's influence within the CGI, would precipitate intense Indonesian hostility towards Australia.

It would also throw into doubt the Australia-Indonesia ministerial forum meeting now scheduled for next month - and further delay the long-expected visit to Australia by President Wahid at the end of October or early November.

The CGI meeting is due to be attended by Japan, the US, Germany, Australia, the European Union, the UK and Nordic countries. On 1998 figures, Australia was Indonesia's third-largest bilateral aid donor behind Japan and Germany. It is respected as extremely well informed on Indonesian affairs.

At present, Australian officials believe that at most they can expect limited progress towards disarming the militias and that it will be a "fine matter for judgement" what the CGI decides on the future of aid.

They have no hopes that the Indonesian Government is likely to arrest militia leader Enrico Guterras before the Tokyo meeting, but expect Indonesia to deliver on assurances given to the UN Security Council and to Foreign Affairs Minister Mr Alexander Downer in New York last week that militias would be disbanded and disarmed under an agreed timetable.

It is understood that leading US Administration figures, including Secretary of State Dr Madeleine Albright, have indicated their determination to ensure the success of the UN peacekeeping operation in East Timor.

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