- The Washington Times - Thursday, July 27, 2000

Indonesia must pay

The U.S. ambassador to Indonesia says Washington is losing patience with the South Pacific island nation over its failure to pay $290 million in an overdue claim by the U.S. Overseas Private Investment Corp. (OPIC).

Ambassador Robert Gelbard told the Jakarta Post yesterday that the United States could resort to the seizure of Indonesian assets if the government continues to ignore a decision ordered by an international arbitration panel last year.

"There is always the possibility of declaring expropriation," he said. "If we were to do this, it would result in a dramatic deterioration of the rupiah [the country's currency] and would hurt Indonesia very much."

OPIC, which insures certain U.S. private investments in foreign countries, is trying to recover the money it spent in a partial payment to a U.S. power company, MidAmerican Energy Holding. It was the largest claim OPIC has paid.

MidAmerican, formerly known as CalEnergy, is owed $572 million from Indonesia's state electricity company, PT Perusahaan Listrik Negara (PLN).

PLN said it has no money to pay the claim, forcing MidAmerican to seek an insurance settlement with OPIC.

"The result unfortunately was that OPIC, an agency of the U.S. government, had to pay out the largest claim in its history to this company," Mr. Gelbard said.

Kosovo pact signed

Ambassador John Menzies is putting the best spin on a joint declaration on the future of Kosovo reached this week by ethnic Albanians and Serbs after three days of talks in the Virginia countryside.

"Perhaps the most difficult decision in a peace process is the choice to meet the other and to work together," said Mr. Menzies, a special adviser to President Clinton and Secretary of State Madeleine K. Albright.

"At this meeting, the participants crossed that threshold," he told the Agence France-Press news service.

The meeting last week at the historic Airlie House in Warrenton, Va., was the first intensive talks between the two ethnic groups since NATO attacked Serbian forces that were trying to drive Albanians out of Kosovo more than a year ago. The war reversed the situation, as Albanians returned and Serbs fled.

NATO and U.N. peacekeepers have been trying to repatriate the Serbs since arriving in June 1999.

The Airlie Declaration committed both sides to strive for a democratic government; however, the Serbs said they do not trust the Albanians enough to take part in coming municipal elections.

The declaration notes Serbian complaints:

"The development of democracy in Kosovo deserves the highest priority, and all participants agreed that free elections are a key element in this process," the declaration reads.

"Albanian representatives insisted on full participation by the Serbian community in registration and voting.

"They noted that participation in the electoral process would provide evidence of Serbian commitment to a free and democratic Kosovo."

However, the declaration adds, "The Serbian community does not have full freedom of living and movement, while many others remain displaced outside Kosovo."

Thirty-nine representatives of the Albanian and Serbian Kosovar communities participated in the talks organized by the State Department and the U.S. Institute for Peace. The State Department released the declaration on Tuesday.

Diplomatic duty

U.S. Ambassador to Peru John Hamilton gets the duty of attending the inauguration Friday of President Alberto Fujimori, whose election is sparking widespread street protests and criticism from foreign governments.

"The United States government has decided against sending any representation from Washington to attend the ceremony in Lima," State Department spokesman Philip Reeker said yesterday.

"Our ambassador will be attending our ambassador who is resident in Lima and that will be one of the lowest-profile representations at the inauguration. Most other governments in the hemisphere will be sending people from their capitals.

Mr. Fujimori won a third term in May in an election that was boycotted by the political opposition, which claimed the vote was rigged.

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