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Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 10/09/99

Transcript No. 99/61

TRANSCRIPT

of

THE HON PETER COSTELLO MP
TREASURER

Interview with Neil Mitchell, 3AW

Friday, 10 September 1999

SUBJECT: East Timor

MITCHELL:

….Mr Costello, good morning

 

COSTELLO:

Hello Neil, how are you?

 

MITCHELL:

I'm okay. Now it's reported that you are ruling out economic sanctions on Indonesia over East Timor - is that right?

 

COSTELLO:

No that's not the case at all. The Government has said that we will be making representations in the IMF and the World Bank, who are both aware of the situation and are very aware of our views in relation to this. In fact I'll be going to the IMF and the World Bank at the end of September and making the point that we think the situation in east Timor is a deplorable situation. The World Bank and the IMF will have to give very careful consideration to their programs. And in addition to that, as you know, the Australian Government had volunteered to be part of second-tier financing in relation to Indonesia and we have not advanced any money under that second tier financing.

 

MITCHELL:

That was around a billion dollars?

 

COSTELLO:

Yeah that was around about a billion dollars. We have not dispersed a dollar of that even though we announced in principle that we would. We have never drawn down on those funds and…

 

MITCHELL:

What and we will not now?

 

COSTELLO:

Well I can't see that we will be in the current situation, no.

 

MITCHELL:

What about trade sanctions?

 

COSTELLO:

Well trade sanctions are a matter that will be considered by the Government in due course and if after that consideration the Government comes to that view I expect that it would be announced, but it's not my place to announce that and as I've said all of these matters are kept under consideration.

 

MITCHELL:

You're reported as saying that you thought economic sanctions and trade sanctions would in fact not fix anything in the short term, is that accurate?

 

COSTELLO:

No the point that I've made is that economic and trade sanctions when they work, the experience of South Africa was that they did work and they took twenty or thirty years to have the effect. That was the point that I've been making and what we need obviously is something that's going to have much quicker effect than the long-term effect than trade and economic sanctions have

 

 

MITCHELL:

And what is that, is that approaching the IMF and the World Bank or…?

 

COSTELLO:

Well in the first place it's securing agreement for a peacekeeping operation in East Timor.

 

MITCHELL:

Yeah.

 

COSTELLO:

We shouldn't be sitting around saying to ourselves let's do something that will have an effect in ten or twenty years, doesn't mean we should rule that out, but we shouldn't be saying well you know let's go the long route. What we ought to be trying to do is go the short route and the short route is a peacekeeping operation in East Timor, which is what the Government is doing everything within its diplomatic power to try and secure.

 

MITCHELL:

Yes, but the Indonesians are resisting that, how do we put pressure on them?

 

COSTELLO:

Well we're putting pressure on them directly with our own representation, we're raising it in the international forum, but more than that we expect that the UN is in negotiation with them. Now you've got to come back to this point that the agreement in relation to East Timor is an agreement which is brokered by the UN and Indonesia's a party to it and Portugal is a party to it and very solemn assurances were entered into as part of that and the UN is the broker. The UN was the force that was going to monitor the ballot …

 

MITCHELL:

But those assurances have been broken haven't they?

 

COSTELLO:

…and with assurances from Indonesia in relation to security. Now …

 

MITCHELL:

But those assurances have been broken haven't they?

 

COSTELLO:

The UN expects those assurances to be met and in the absence of meeting them there has been an attempt to have an international force which will be meeting them and the Australian Government is using every means that is available to it to try and secure that.

 

MITCHELL:

Are you aware that armed Australian troops are now guarding the airport as people are evacuated?

 

COSTELLO:

Well I know that Australia has indicated that it will help with the evacuation and it will take the necessary measures to secure (inaudible).

 

MITCHELL:

Well I was talking to Lindsay Murdoch at the UN compound about an hour and he told me that's what's happening. They're being hidden on trucks, guarded as they fly out, as they are taken to the airport. So what will you tell the IMF and the World Bank at the end of the month?

 

COSTELLO:

Well we'll tell the IMF and the World Bank that we consider the situation to be very grave, that the IMF will have to clearly consider whether or not it'll be proceeding with the package and that in proceeding with the package they'll have to assess the compliance that Indonesia has shown in relation to this matter and in relation to economic restructuring. We have already made these representations.

 

MITCHELL:

But are we asking them to withhold money?

 

COSTELLO:

Well we have already made representations at the IMF and at the World Bank and drawn it to the attention of the World Bank and the IMF and we've secured an assurance from them that they are looking very carefully at the situation in relation to East Timor and will take that into account. Now the fact of the matter is that there is not another draw-down on those funds in the near future but we have an assurance from the IMF and the World Bank that they will consider the security situation if there is to be another draw-down in the future.

 

MITCHELL:

Thank you very much for speaking to us.

 

COSTELLO:

It's a great pleasure Neil.