Creditor nations approve RI's debt swap proposal<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government claimed on Tuesday it had received agreement
\nfrom eight creditor countries for debt swap schemes, which are
\nexpected to help ease the burden on the state budget in the
\nrepayment of sovereign debt.<\/p>\n
Senior official at the State Ministry of National Development
\nPlanning Koensatwanto Inmpasihardjo said of the 15
\ncreditor nations being offered debt swap proposals, eight had
\nwelcomed the scheme while the remainder had either completely
\nrejected it or were still studying it.<\/p>\n
Koensatwanto said the eight nations comprised Canada, Finland,
\nFrance, Germany, Italy, New Zealand, Sweden and the UK, while
\nrejections had come from Australia, Denmark, Japan and South
\nKorea. The others were still undecided, pending further
\nconsideration.<\/p>\n
The debts swap is a concept that the government has been
\ndeveloping, as part of efforts to take pressure off the state
\nbudget for debt repayments, especially foreign ones.<\/p>\n
Although details are still sketchy, the concept is largely
\ntied to the country's foreign debt restructuring program, such as
\nthat via the Paris Club mechanism.<\/p>\n
The country's total public debt currently stands at around
\nUS$132 billion, or some 90 percent of the country's gross
\ndomestic product (GDP) for this year, estimated at around $165
\nbillion.<\/p>\n
Of that amount, $70 is owed to foreign lenders.<\/p>\n
GDP measures total value of goods and services produced in a
\nyear.<\/p>\n
Such a huge debt burden has created budgetary constraints,
\nlimiting the amount of funds allocated to development programs,
\nwhile a huge amount must be allocated to service debt.<\/p>\n
For example, the allocation for debt repayment this year
\nstands close to Rp 120 trillion, which accounts for around 35
\npercent of entire state expenditure.<\/p>\n
Elsewhere, Koensatwanto said the debt swap agreement with the
\neight countries covered various schemes such as swaps for nature
\nconservation and for poverty eradication.<\/p>\n
However, he fell short of explaining how much debt reduction
\nthe government would obtain from this, saying that agreements
\nwith each creditor nation still had to be worked out.<\/p>\n
Reports have said that Germany has agreed to set aside 50
\nmillion deutschemarks for the debt swap scheme.<\/p>\n
He also said that Japan had rejected the program on the
\ngrounds that such a scheme would be considered some sort of debt
\nhaircut, a very sensitive issue in the country at present.<\/p>\n
As for Austria, it decided to oppose the swap as it did not
\nhave a legal basis on which to consider it.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/creditor-nations-approve-ris-debt-swap-proposal-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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