U.S. Department of State Daily Press Briefing #57, 98-05-08

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U.S. Department of State
Daily Press Briefing

I N D E X

Friday, May 8, 1998

Briefer: James B. Foley

ANNOUNCEMENTS
1		Background briefing here May 11 on US efforts to promote
		  religious freedom around the world
1		USG assisting flood victims in Italy
MIDDLE EAST PEACE PROCESS
1,9-10		Report of PM Netanyahu's unwillingness to come to
		  Washington on Monday
2,10-11		Briefer not in a position to confirm that report
2		Amb. Ross prepared to stay several days in order to find a
		  solution
2,3		Briefer not aware anyone focusing on a date other than
		  Monday
2-5		Details of Amb. Ross' schedule not yet available
3		No change in US position on settlement activity
4		Amb. Ross is looking at creative ways to make US ideas
		  acceptable to both sides
4		US ideas are part of an integrated package
10-11		If breakthrough not achieved, US will re-examine its
		  approach to entire process
PRESIDENTIAL AND SECRETARIAL TRAVEL
3		President Clinton and Secretary Albright leaving US on
		  Tuesday, May 12
CYPRUS
5		Amb. Holbrooke's comments described the de facto situation
		  in Cyprus
SIERRA LEONE
5-6		UK company provides security for US mine
6		State Department has been in touch with UK Embassy over
		  Sierra Leone
6		US received no information on arms shipments
NORTH KOREA
6		Statements by DPRK are unfortunate, not founded in reality
7		US is fulfilling its part of the agreed framework, and will
		  continue to do so
7		Financing for KEDO project detailed
8		US has responsibility for providing heavy fuel oil
8		US willing to consider a global solution for funding in
		  context of close congressional consultation
9		US has been assured that Japan and South Korea will meet
		  KEDO obligations
IRAN-LIBYA SANCTIONS ACT
11-12		A decision is close
CONTACT GROUP
12		May 9 is deadline for Milosevic to comply with CG
		  strictures
12-13		Investment ban would have chilling effect on Serbia
13		Investment ban would cover CG members, except for Russia
13		US will continue to urge Russia to persuade Milosevic to
		  act in interest of peace
INDONESIA
14		Situation quiet in Medan
14		Students demonstrations occurred in various places
14		US urges restraint on all sides
14		US provides no military assistance to Indonesia

U.S. DEPARTMENT OF STATE
OFF-CAMERA DAILY PRESS BRIEFING

DPB #57

FRIDAY, MAY 8, 1998, 1:10 P.M.

(ON THE RECORD UNLESS OTHERWISE NOTED)

MR. FOLEY: Good afternoon. I want to let you know that on Monday at 2:30 p.m., we're going to have a background briefing by a senior State Department official on US efforts to promote religious freedom around the world. It will be held here in the State Department briefing room at 2:30 p.m.

Secondly, I have just a little bit of information about the assistance the United States has offered and is supplying to Italy in the wake of the tragic mudslides that you've seen and read about. A US Air Force aircraft transported Italian civil defense workers from Northern Italy to Naples on May 6, to assist with flood relief in that area. The US aircraft was provided in response to a request for assistance from Italian civil and military authorities.

Officials at the US Embassy in Rome and the US air base in Ramstein, Germany, immediately supported this request and authorized the use of the military aircraft that was temporarily deployed at Aviano Air Base in Northern Italy. US forces based in Naples are providing material and personnel to assist rescue efforts; namely, in the form of earth-moving equipment, tents for rescue workers and refrigeration equipment for perishable foods.

With that, I turn to Barry Schweid.

QUESTION: What are you hearing from Jerusalem about Mr. Netanyahu's apparent unwillingness to come here? Are you hearing anything?

MR. FOLEY: Well, I can tell you, first of all, Barry, I have not been in contact with Ambassador Ross, and I don't have a readout of how his initial talks are going. So unfortunately, I won't be able to help you on that. Indeed, I won't be in a position to speak in much detail about the subject, because, clearly, our focus is on his mission now and on our continuing hopes that it will be possible to find a way to reach an agreement that will permit a meeting in Washington on Monday to launch permanent status negotiations.

In terms of the Prime Minister's ability to be here on Monday, this question, Barry, was asked yesterday, because we'd seen coming out of Israel some comments casting doubt on that. But we view the fact that the Prime Minister had requested Ambassador Ross to travel to Israel as indicative of a willingness on his part, as well, to go the extra mile to see whether it would be possible to close the gaps and to be able to be here next week on Monday for the summit meeting in Washington.

QUESTION: You don't have word that Netanyahu is unable to come, under your dictum?

MR. FOLEY: No.

QUESTION: No?

MR. FOLEY: What do you mean by --

QUESTION: Well, did he accept the terms?

MR. FOLEY: That is not a formula that I would accept.

QUESTION: Well, your kind invitation to come here on US terms, yes. And apparently he's rejected it; is that correct?

MR. FOLEY: Not to my knowledge, no.

QUESTION: Oh, okay, because the reports I'm getting --

MR. FOLEY: He's invited Ambassador Ross to Israel in order to see whether a way can be found on the basis of the American ideas to reach agreement.

QUESTION: No, I'm sorry, because just as the briefing was called, reports are beginning to come from there that he has said, no thank you, under those conditions.

MR. FOLEY: I'm not aware that Israel has closed the door on that possibility. On the contrary, Ambassador Ross is prepared to stay there several days. The Sabbath, obviously, is beginning there now, but he's willing to stay there several days to see, as Spokesman Rubin said yesterday in London, whether in these final days it will be possible to reach agreement based on the US ideas.

QUESTION: Does that mean that if not Monday, perhaps another day could be worked out?

MR. FOLEY: I'm not aware that anyone is talking about a different date other than Monday. Obviously, the President and Secretary are traveling on Tuesday to Germany to attend the summit in Berlin.

QUESTION: Do you know, is Ross meeting with Israeli officials now?

MR. FOLEY: I believe he had an opportunity to meet upon his arrival there this morning. But as I said, I've not spoken to him or his party so I can't confirm any specific meetings.

QUESTION: You don't know his schedule?

MR. FOLEY: No, I don't.

QUESTION: I mean, I'm not asking because if we knew the meetings were still going on we might be able to infer something.

MR. FOLEY: Yes, if I could help you on that, I would. If I can get any information of that nature this afternoon, please call and I'll convey that to you, at least in terms of his schedule and meetings and what we know about those. I would assume, though, that the onset of the Sabbath will preclude meetings during that period - of a formal nature, in any event.

QUESTION: Is there anything particularly sacred about Monday? Or is it a sense that there should be a deadline, that a deadline would focus people's minds and - is there any reason why it couldn't go until later when the President and the Secretary will be available again after their various activities in Europe?

MR. FOLEY: Well, I wasn't with the delegation in London, and some of your colleagues here in this room were, and may be in a better position than I to discuss the rationale behind Monday specifically. But as I indicated, the President and Secretary are leaving the country on Tuesday, and they felt that the prospect of a summit meeting to launch historic permanent status negotiations on Monday was a very attractive possibility. It was one that was also permitted by their overseas travel schedule.

QUESTION: She's not going to the G-8, is she?

MR. FOLEY: No, she's not.

QUESTION: Well, then, she could be back Thursday, right? Or Friday?

MR. FOLEY: I believe that following the summit meetings in Berlin, she will have additional travel. I can't confirm that, but I understand that she will have additional travel in Europe on Friday. Then there's just a short weekend -- Saturday, Sunday -- before the US-EU Summit on the following Monday, which the Secretary will be attending along with the President.

QUESTION: So I suppose even though she's not going to Birmingham, she'll stay?

MR. FOLEY: Yes, my understanding is that she'll be staying on in Europe, yes, and maybe doing business on the Friday.

QUESTION: Do the American ideas that you talk about include a time-out on settlements?

MR. FOLEY: Well, our position has not changed on the time-out; that is still part of our four-part agenda.

QUESTION: Well, yesterday it was a three-part agenda -

MR. FOLEY: No, that was a different question. That had to do with the aims of a Washington summit meeting next week.

QUESTION: But the time-out is still part of the American -

MR. FOLEY: Yes, it is: of the American four-part agenda, yes.

QUESTION: I have a question on Cyprus.

MR. FOLEY: Are we finished with the Middle East? I'm not anxious to close off dialogue on any issue.

QUESTION: Well, you don't have any word from Ross, really.

MR. FOLEY: No.

QUESTION: So to ask you about refinements and such may be futile, huh?

MR. FOLEY: I think so.

QUESTION: Do you remember when Albright said - well, here's something you probably can address. Her words were "water down" -- that the US positions would not be watered down. But we know refinements don't mean watering down in State Department parlance. Is there any change in that construction -- not watering down, but there are room for refinements?

MR. FOLEY: Well, certainly there's been no change in the Secretary's statement about not watering down the American ideas. I indicated -- you weren't here yesterday, though - that the American ideas are part of a package -- an integrated package -- involving parallel steps to be implemented simultaneously. And all through this process, especially in recent weeks, we have been involved in trying to refine those ideas to take account of the requirements and points of view of the two parties. Ambassador Ross is continuing that effort. He is looking at creative ways to make the US ideas acceptable to both sides.

But it is, as Mr. Rubin indicated in London yesterday, still on the basis of the American ideas that were presented to the two parties in London.

QUESTION: By the way, does he see Mr. Arafat, too?

MR. FOLEY: I'm not aware - I was asked that yesterday, and I had no information that such a meeting was envisaged or that the Chairman was even going to be available. I have no I information on that today.

QUESTION: Is it possible for you to perhaps get touch with Dennis by our day's end there - since it will be later there - and if there is anything --

MR. FOLEY: Well, I undertook a few minutes ago to try to find out whether there were any details concerning his schedule, his movements, his meetings that I could share with you that I don't have right now. So I will make a "college try," and you have my phone number. If I have that information, I'll be glad to share it with you.

QUESTION: (Inaudible.)

MR. FOLEY: That is a novel phrase, George. I commend you on your expanding lexicon.

QUESTION: Some of the statements by Ambassador Holbrooke and the comments you made today or three days ago created some space for misinterpretation of US policy --

MR. FOLEY: How's that?

QUESTION: Regarding the political situation in Cyprus, about the recognition of one government in Cyprus and --

MR. FOLEY: About what?

QUESTION: Recognition of one government in Cyprus. You said also that there are two peoples in Cyprus who are alienated and divided. So could you make a clarification on the US stance on these issues?

MR. FOLEY: Well, there are two communities on Cyprus. But in terms of Ambassador Holbrooke's remarks, I believe there's been speculation in Cyprus that those remarks represented a change in US policy. I addressed that to some degree myself the other day here - making clear that what Ambassador Holbrooke describing was a de facto situation which has existed in Cyprus for a long time. There certainly has been no change in US policy, though, I can assure you of that.

In particular, Ambassador Holbrooke was not in any way signaling a policy change with regard to our excellent relationship with the Republic of Cyprus, which, indeed, is the only government that we recognize on the island. Nor was he according any official status to the Turkish-Cypriot entity in the north. Ambassador Holbrooke and Special Cyprus Coordinator Miller have said repeatedly and publicly that the US does not recognize the so-called Turkish Republic of Northern Cyprus. However, because he had been invited by both sides to try to start a process to settle the Cyprus problem, Ambassador Holbrooke's response - and it was to a question that was asked of him - concerning the situation on the ground was intended to advance our effort. There's really nothing new here at all.

QUESTION: A British company has been accused of supplying arms to Sierra Leone, despite the UN embargo. The company says they had - they claim they had support from the State Department. Can you comment on that?

MR. FOLEY: Yes, the company involved is Sandline International, and it's a private security firm in the UK. Sandline International periodically contacted US State Department officials and commented on the situation in Sierra Leone, but provided no information on arms shipments. I think that's the critical point that you're asking me about, and I'd like to be very clear about that. However, Sandline International provides security for private mining and construction interests, including an American mine in the Sierra Leone countryside. I would note that Sandline employees were among the few expatriates who remained in Sierra Leone after the coup, and kept in touch with State Department officials, as was perfectly legitimate for them to do and for us to do on our side.

QUESTION: They provided no information on arms shipments?

MR. FOLEY: Yes, that's true.

QUESTION: The company says that they informed the State Department at the highest level. What level would that be - kept you informed on what they were doing?

MR. FOLEY: Oh, you'd have to ask them about that; I have no information to that effect. I understand that some officials in our Bureau of African Affairs had the kind of conversations with Sandline that I described a minute ago, but that's the extent of what I can confirm.

QUESTION: And also with the British Embassy.

MR. FOLEY: Yes, it's true that the State Department has been in touch with the British Embassy concerning the situation in Sierra Leone. And the State Department asked the British Government to take a strong leap in soliciting logistical and technical support for ECOMOG operations in Sierra Leone, as was requested under, I believe, three UN Security Council resolutions.

QUESTION: I was told in the building yesterday that you had no information on arms shipments going to the rebel factions in Sierra Leone excluding -- the phrasing excluded the option of providing weapons to ECOMOG, which I understand is what actually took place.

MR. FOLEY: As I said, we had been in touch with the British Government concerning logistical and technical support to ECOMOG. However, I can re- state that we received no information concerning arms shipments into Sierra Leone.

QUESTION: Jim, on another subject, have you seen the statements coming out of North Korea threatening to resume their nuclear weapons program unless the fuel oil shipments, as promised, arrive?

MR. FOLEY: Yes. Those statements are unfortunate, because they're not founded on the reality of what the United States is doing in implementing the agreed framework. We expect and trust that the North Koreans will continue to implement their side of the agreement enshrined in the agreed framework. The United States has fulfilled its part of the agreed framework and will continue to do so.

We believe that the agreed framework is in the interests of all parties and that its provisions will be carried out by all parties. Construction of the light water reactors and deliveries of heavy fuel oil are ongoing, and we continue to work with other members of KEDO parties on financing. We, of course, closely monitor the agreed framework. We are, until now, satisfied that the DPRK has indeed met its obligations to the present.

QUESTION: You're saying that the fuel oil shipments have arrived on schedule, on time and in the right quantities?

MR. FOLEY: Thus far they have. The fact of the matter is that the United States is committed to providing a certain amount of fuel oil per year. And we fully expect that by the end of this year we will have provided the amount of heavy fuel that we have pledged to provide.

QUESTION: Is it possible that some of those shipments would be delayed? Could this have caused some of the concern on the part of the North Koreans -- that by the end of the year it may all be there but if it arrives in tranches later than they expect, might that raise concern?

MR. FOLEY: Well, I'm not aware that there has been any delay in the timetable of shipments. That may be the case; I just don't know about it. What I am saying, though, is that we have a commitment. Thus far, we have met the commitment, and we fully intend to do so. By the end of the year, we intend to have reached the levels of heavy fuel oil shipments that we pledged to make.

Certainly, there's been speculation publicly in the media about financing for KEDO and for all the obligations under KEDO. Under the agreed framework, we worked with South Korea and Japan, as you know, to create KEDO - the Korean Peninsula Energy Development Organization - in order to fund and oversee the light water reactor project. KEDO has agreed on an estimated cost of $5.2 billion for the light water reactor project funding, over the life of this roughly ten-year project. Discussions among KEDO members on financing have been ongoing.

The Republic of Korea has agreed to fund 70 percent of the construction in Japan, a significant part of the project. KEDO has funding for the current year, and discussions over details of the funding for the rest of the life of the project continue.

QUESTION: Is there concern - I mean, Japan and South Korea are a good deal less flush today than they were in 1994. Is there concern that they might not be able to afford these sums of money?

MR. FOLEY: Well, Secretary Albright, of course, was recently in the region, in both South Korea and Japan, and had discussions with officials in both governments about KEDO financing. We have received no indications on the part of either government that they will be unable or unwilling to fulfill their commitments.

QUESTION: What percentage is South Korea up for - 17 or 70?

MR. FOLEY: 7-0.

QUESTION: 7-0. And does South Korea or Japan have any role in providing the fuel oil, or is that a unilateral US obligation?

MR. FOLEY: Well, the US, I would point out, has already contributed approximately $86 million to KEDO for heavy fuel oil, and also for KEDO administrative expenses. The US has also provided roughly $27 million for the canning of spent fuel rods.

I believe that the US is indeed responsible for the bulk of the provision of heavy fuel oil. I'm not sure that that is a 100-percent responsibility; but we have a large responsibility in that. On the light water reactor construction, we have no plans ourselves to participate in funding, in conformity with previous agreements. However, the US has discussed with Japan and South Korea the possibility of our making some contribution for safety-related elements of the light water reactor project in some future year. If this happens, it would only take place as part of a comprehensive solution to KEDO's funding problems. And we would, of course, only consider committing to fund light water reactor safety-related items after close consultations with the Congress.

QUESTION: Is removal of the rods, is that going forward?

MR. FOLEY: My understanding is that it's almost complete.

QUESTION: Do you have any complete idea of how much do you expect Japan or South Korea to contribute in all the heavy oil --

MR. FOLEY: I don't have the specific figures. Certainly, the percentages that were committed to, though, at the time of the signing of the agreed framework are a matter of record; and I just noted those.

QUESTION: How much do you figure the safety-related equipment will cost?

MR. FOLEY: I don't have a figure on that. Of course, this is in the idea stage. As I said, we would be willing to consider this as part of a comprehensive solution to the funding of the light water reactors, over the life of the project: that's number one. Number two, we would have to sit down with Congress and reach agreement on this. So I'm not in a position to talk about numbers at this point.

QUESTION: But the reason this has come up is essentially because Japan and South Korea are running into problems in coming up with their contributions?

MR. FOLEY: Well, I think that we have received assurances that both Japan and South Korea will meet their obligations. I see no indication otherwise. There has been, I'm sure you're aware, a desire on their part to see the United States participate in some way in the light water reactor area. So we're looking creatively at this as a possibility, as I said, within the context of a global solution to the issue.

QUESTION: And just one last one - did the Secretary, when she was in South Korea and Japan, did she ask either country to participate in contributing to the fuel oil endeavor?

MR. FOLEY: I'll have to take that question.

QUESTION: (Inaudible.)

MR. FOLEY: Thank you, Barry.

QUESTION: Can I ask you about - well, those of us who were there.

MR. FOLEY: Is that on the record or --

QUESTION: I can go on background.

(Laughter.)

But it wasn't volunteered; it came out really reluctantly because, as you know, they're paying most of the bill for the reactor.

MR. FOLEY: Anything else?

(Laughter.)

QUESTION: Yes. Netanyahu's not coming here. Do you want to revise your response that you haven't given up hope? Or if you can't do that, could you point us to where -- should this be the case - where might - it's a little scattered today because the Secretary's in London and it's sort of a White House meeting, and you're here -- the State Department is in business here. Where might the response of the reaction come from?

MR. FOLEY: Well, first of all, Barry, you have stepped out of the room and, thankfully, returned to the room and brought the Middle East back to the fore of our briefing today. But you may have obtained information that I don't have.

QUESTION: No, I just thought it was simultaneous with your coming in here - the wires.

MR. FOLEY: No, I'm just not aware that there's been any definitive statement on Israel's part that the Prime Minister will not be able to attend a summit meeting in Washington on Monday.

QUESTION: You see, I ask for several reasons. One reason I ask is, you're in a difficult situation. If you say no other date is being talked about, that might be what you're supposed to say before he says no. If he says no, I don't know that that will stand. Maybe another date is acceptable.

MR. FOLEY: I don't know that you're right, either. What we have said and that I can repeat - and I don't think I can say very much on the subject, given that Ambassador Ross is over there and we're hopeful that he'll reach agreement. But what we have said is that we've come to the end of the road of the American effort to try to bridge the gap on the interim issues in order to launch permanent status negotiations. After all, we are now less than one year away from what is supposed to be the conclusion of the permanent status negotiations. We've reached the end of that road.

What we wanted to do was to hold a meeting in Washington to herald the launching of permanent status negotiations, not to register continued failure to launch permanent status negotiations. So we have said -- and I can repeat it -- that in the event that we're not able to hold such a meeting, then what the United States will do is to re-examine our approach to the entire Middle East peace process.

QUESTION: And not hold a meeting at a later time?

MR. FOLEY: We do not see a purpose in holding a meeting to register a lack of agreement. That's the end of the road that we've arrived at -- the current American effort -- and we envisage such a meeting in Washington as a historic occasion to launch permanent status negotiations, not to have another meeting for meeting's sake.

QUESTION: I understand. But when you said we need to re-examine our approach, would that be the next step, as opposed to reconsidering the schedule for the meeting?

MR. FOLEY: If we are unable to achieve a breakthrough to launch permanent status negotiations, the United States will re-examine its current approach to the Middle East peace process.

QUESTION: Well, there used to be a hovering threat that, I guess, didn't frighten anybody, that if you couldn't get the sides together you might just sit it out and give up the ghost. But Albright sort of retracted that in London when she said peace in the Middle East is far too important for us to simply abandon the effort. So, when you say re-examine, is the State Department still saying that one of the options is to sort of take a recess from mediation?

MR. FOLEY: Well, it's a fully legitimate question, Barry, and it's one with potentially profound significance: a re-examination. But I'm not in any position to describe what that may or may not mean, because we're not there yet. We are still -- and in spite of, perhaps, your own skepticism -- we are still hopeful that we can have such an historic meeting next week.

QUESTION: Well, it's not my skepticism, it's just that I realize that it hasn't been in major newspapers yet, but the wire services do have consistent reports now that he has said, I can't make it by Monday.

MR. FOLEY: I understand. I've not heard that from Ambassador Ross.

QUESTION: Okay.

QUESTION: Where do you stand on a decision on ILSA? There's a letter today, apparently from some influential senators, pressing the Administration to impose sanctions and I wondered where that whole process stands.

MR. FOLEY: The decision is close; that's all I can tell you.

QUESTION: The decision's been close for six months.

MR. FOLEY: Yes, I knew that you were going to throw that back at me because, indeed, we have stated that we expected a decision "soon," at several points. However, this is very serious business and it involves many elements, including examination of the facts and circumstances. And, as you know, given the onset of the Asian financial crisis, one thing that we did do was take another look at the possible impact of that crisis on this matter. But you'll just have to watch and wait in order to see. I am telling you that the decision is going to be forthcoming; I can't tell you what day, but it's close.

QUESTION: I mean, the problem becomes that when you say soon, soon, soon and people sort of report that as actual fact, and then soon really turns out to be six months, and that's not soon and words lose meaning, so --

MR. FOLEY: No, I understand, and I acknowledge the fact that you would feel that way. So I've said what I have to say and you're just going to have to wait over the next short period to see the fact that we will be making that decision and bringing it to your attention.

Q (Inaudible.)

MR. FOLEY: I'm not in a position to announce the date of the decision. I said it's close.

QUESTION: Do you feel a need to make that decision before the Birmingham summit and the EU summit?

MR. FOLEY: Well, I think we're in the final stages of making that decision. Whether it can be made before the summit or around the summit, I am not aware that we've made that decision. But I said the decision is forthcoming. Obviously, the summit itself is just around the corner; so they're going to occur in the same neighborhood. I can't tell you whether it's going to be before or around about the time of the summit.

QUESTION: What can you say about Eizenstat's travels at the moment?

MR. FOLEY: I have no information on that. I believe he's attending, with Secretary Albright, the meeting of the G-8 foreign and finance ministers; that's all I can tell you.

QUESTION: The Contact Group meeting starts in about 14 hours, given the time difference. Do you have any comments on that - any expectation as to what might happen?

MR. FOLEY: You are of course familiar with the fact that in its last meeting in Rome, the Contact Group set May 9, I believe, as a deadline for Mr. Milosevic to follow through on a series of steps, including embracing a framework for dialogue; agreeing to a stabilization package; agreeing to international participation in negotiations; agreeing to ending the repression; and to undertaking an unconditional dialogue with the Kosovar Albanians. Those were the demands of the Contact Group in Rome. Of course, immediately, an investment ban - I'm sorry - an asset freeze - was agreed upon. And it was also agreed that an investment ban would be implemented automatically on May 9 if Milosevic had not taken those steps.

So we're on the eve of that meeting. I'm not sure that it's a Contact Group meeting as such. The foreign ministers who are present in London, who include the Contact Group foreign ministers, will meet on Kosovo either today, tomorrow or perhaps on both days. But our expectation, as I said yesterday, is that the investment ban will come into effect starting tomorrow.

QUESTION: For lack of progress?

MR. FOLEY: For lack of progress, yes.

QUESTION: Any numbers yet on the impact that might have?

MR. FOLEY: I don't have that. First we're going to have to implement it. I suppose that, sometime next week, appropriate legal mechanisms must be implemented -- in this country, as well as in other countries -- in order to make this investment ban take effect. Once we go through that paperwork, perhaps we'll be in a position to assess for you what the impact might be.

Of course, the impact is not probably something that can be scientifically delineated, because we're talking about preventing investments from occurring. If we have information about investments that are in the pipeline that will be prevented from going forward, perhaps we can share that; perhaps it's proprietary information that we cannot share. But we have always stated, though, that we believe that the sanctions that had progressively been implemented on the Serb economy -- on top of the outer wall of sanctions, which are still in existence -- are undoubtedly having a very severe chilling effect on the Serb economy and on prospects for further investment in Serbia. Also on the part of Serbian entrepreneurs, I would add.

QUESTION: There have been articles that have talked about a very large Italian telephone company contract that would supposedly stop millions of dollars worth of investment. It would be just useful, in writing about this, to know about any other major examples.

MR. FOLEY: I understand that. I can't give that to you today. Let's see the investment ban imposed, and maybe we'll be in some position to give you some of that, if we can. But we believe it will be significant.

As you know, the Contact Group in London, I believe, implemented a ban on Western participation in privatization in Serbia, which had been a source of revenue for Milosevic personally. We believe that was significant. But you're absolutely right: To the extent that there were major investments in the pipeline that are now going to be halted by this, we think it's going to have, really, a very crippling effect on the Serb economy.

I think that's an economy that's not difficult to cripple, given its current state.

QUESTION: Is it intended that this investment ban should cover - well, is it going to cover everybody or just Contact Group members, or are there other countries that are being asked to - how does it work?

MR. FOLEY: Well, certainly, it obligates the members of the Contact Group, who endorsed this step in Rome. As you are aware, Russia disassociated itself from the decision. But we fully intend to urge friends and partners and other nations around the world to implement a similar investment ban. But I think no one can argue with the fact that the leading members of the Contact Group - some of the great industrial powers who are signing on to this investment ban -- would offer the potential for the most help and assistance to the Serb economy. And this will, of course, evaporate once the investment ban is implemented.

QUESTION: You were saying that Russia would be free, under its own stipulation, to go ahead and invest and not freeze funds? In other words, they're not taking part in the sanctions.

MR. FOLEY: It's a matter of record - Russia has disassociated itself from this step.

QUESTION: I know; I'm asking the effect. They would be free, under their stipulation, not to obey this --

MR. FOLEY: Well, we will continue to urge Russia to undertake measures that can help persuade Mr. Milosevic to do what is in his interest to do, to do what is in Russia's interest to do, and is in the interest of all nations concerned about peace in the Balkans - which is to take the reasonable steps to diffuse the militarization of the conflict, the repression underway, and to sit down and negotiate directly and fairly with his fellow citizens, the Kosovar Albanians of Kosovo.

QUESTION: Jim, is there any change in your assessment of the situation in Indonesia -- the depth or the breadth of the of the demonstrations that are currently going on?

MR. FOLEY: There is not a change in our assessment; I can give you an update on the situation as we see it today. The city of Medan remained quiet today, May 8, after rioting earlier in the week -- apparently related to fuel price increases. Meanwhile, student demonstrations have continued at several campuses and various parts of Indonesia. In Padang, West Sumatra, local citizens joined a large demonstration march from the university campus to the city center. The demonstrators have called for political and economic reform and an end to government corruption and high prices. The crowd stoned several buildings after police tried to break up the demonstration, but there were no reports of burning or looting.

As you know, we have urged the Indonesian Government to continue to allow peaceful demonstrations and we understand, of course, the Indonesian Government's desire to protect the welfare of its citizens by maintaining law and order. But we continue to urge the security forces -- and we also urge students and the public -- to show restraint and to refrain from violence. Although Indonesia is undeniably moving through a difficult period, we believe that violence will benefit no one.

QUESTION: Is the military training program for Indonesia under review?

MR. FOLEY: At present, the United States, as you know, George, does not provide any military assistance for Indonesia. We have allocated $400,000 for Indonesian participation in our expanded IMET program. This training represents an opportunity to expose the Indonesian military to US military professionalism and American culture and values. We believe that elsewhere in the world, experience has demonstrated that this kind of contact often builds constructive relationships with military officers that would otherwise be difficult. But in terms of the status of that particular program, I'd have to refer you to the Pentagon.

Thank you.

(The briefing concluded at 1:45 P.M.)

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