By Paul Blustein
Washington Post Staff Writer
Wednesday, March 25, 1998; Page A04

The Clinton administration said yesterday it will donate $56 million in food and medical aid to Indonesia, a gesture aimed at demonstrating sympathy for the country's plight even as Washington continues to demand economic reforms from the government of President Suharto.

The aid includes grants of food to be distributed in drought-stricken areas, essential medical supplies for the poor and concessionary loans for purchases of U.S. farm products.

The move comes amid fears that the economic crisis in Indonesia, the world's fourth-most populous-country, is arousing deep anger among its 200 million people that could trigger social chaos and anti-American sentiment. The United States is standing firmly behind a decision by the International Monetary Fund to suspend Indonesia's $43 billion international bailout program because of Suharto's reluctance to implement reforms.

Administration officials maintained that the offer of humanitarian aid is separate from the suspension of the much bigger IMF rescue package. "We are not trying to tie this directly or indirectly to any political considerations or the IMF," said Stuart Eizenstat, the undersecretary of state for economic affairs. "This is for the Indonesian people."

The Clinton administration is still eager to cajole Suharto further into compliance with the IMF, officials said. The Indonesian government has been signaling in recent days that it is trying to reconcile with the fund. Its actions included an interest rate increase, announced Monday, that drew public praise from IMF officials in Jakarta.