March 31, 1998 No. 77

GOVERNMENT OF CANADA TO PROVIDE BILATERAL

SUPPORT PACKAGE TO INDONESIA

The Government of Canada today announced it will provide $280 million as part of a support package to Indonesia to address the hardships its people have suffered as a result of the economic crisis affecting the country. The announcement was made on the occasion of the visit to Indonesia by Secretary of State (Asia-Pacific) Raymond Chan and Secretary of State (International Financial Institutions) Jim Peterson, who are in Jakarta to discuss humanitarian and economic needs with President Soeharto and Indonesian ministers. They are accompanied by a team of officials and experts.

"Indonesia is confronting a food shortage caused by drought, increased prices, distribution difficulties, and a limited ability to import essential foodstuffs," said Foreign Affairs Minister Lloyd Axworthy. "Canadian assistance should help to address the human side of the economic crisis."

"The main objectives of this initiative are to alleviate the suffering of the Indonesian people, to support implementation of the International Monetary Fund (IMF) program, and to address Canadian interests in Indonesia," said Mr. Chan. "Together, we can work to assist our Asian partners in their efforts to overcome the economic turmoil taking place in the region."

The support package will include $250 million in agricultural export credit guarantees managed by the Canadian Wheat Board (CWB). An additional $20 million will be provided in export credits for essential imports support from EDC (Export Development Corporation) under the Canada Account.

"The Canadian contribution serves to bolster Indonesia's efforts to address the crisis by reinforcing the multilateral initiative led by the IMF," said International Trade Minister Sergio Marchi. "EDC will continue to consider business opportunities in Indonesia using its normal commercial criteria."

"This initiative follows Canada's efforts at the multilateral and bilateral levels to help Indonesia deal with the current economic crisis," said Jim Peterson. "The IMF, the World Bank, the Asian Development Bank, and bilateral donors provided US$41.2 billion in assistance to Indonesia in response to the financial crisis in November 1997."

Diane Marleau, Minister for International Co-operation and Minister responsible for la Francophonie, added that the Canadian International Development Agency (CIDA) will respond with more than $9 million in food aid and humanitarian assistance to requests from multilateral and local aid organizations in Indonesia. CIDA will supplement its existing program, designed to help the country in the areas of private sector and human resources development, governance and human rights, and environment, with special technical assistance related to the financial crisis.

The Canadian support package is the result of an initiative involving several government organizations, including the Department of Foreign Affairs and International Trade, the Department of Finance, the Department of Agriculture and Agri-Food, the CWB, EDC and CIDA.

Canada contributed $1 million last December in bilateral food aid to assist the Indonesian people in Irian Jaya suffering from drought. Earlier this month, Canada provided an additional $50 000 for a food program in East Timor. The Canadian government also indicated that it is prepared to work in partnership with Indonesia and other affected countries to combat the forest fire problem in the region.

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For further information, media representatives may contact:

Media Relations Office

Department of Foreign Affairs and International Trade

(613) 995-1874

Hilary Humphrey

Office of the Secretary of State (Asia-Pacific)

(613) 995-1852

Doug Secord

Office of the Secretary of State (International Financial Institutions)

(613) 992-6670

This document is also available on the Department's Internet site: http://www.dfait-maeci.gc.ca