U.S. Urges Suharto To Show Restraint
The Clinton administration, worried that political upheaval in Indonesia could wreck the country's international economic rescue, is warning the government of President Suharto to show restraint in dealing with student demonstrations and other forms of dissent.</br></br>But administration officials said that despite mounting criticism of the Suharto regime's human rights practices, they are not threatening to cut off Indonesia's $43 billion bailout led by the International Monetary Fund. Depriving the country of desperately needed cash, they argue, would only deepen its economic crisis and increase the chances of social turmoil and bloodshed.</br></br>The IMF is expected to approve another $1 billion installment for Indonesia on Monday. Administration and IMF officials said that last-minute negotiations are continuing but that Indonesian authorities, after balking for months, appear to be complying with IMF demands for economic reforms, including the dismantling of monopolies run by the president's relatives and cronies.</br></br>Behind the flurry of maneuvers lies the administration's anxiety about keeping the situation in Indonesia, the world's fourth most populous country, from spinning out of control.</br></br>Indonesia's financial condition remains extremely fragile, with its currency deeply depressed, inflation soaring and joblessness spreading. An outbreak of social chaos in Indonesia could spook investors in neighboring countries and cause the Asian financial crisis to worsen, U.S. and IMF officials fear. Moreover, the Indonesian archipelago straddles major shipping lanes, and civil strife there could disrupt global commerce.