Donors likely to provide debt relief<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Indonesia moved closer to securing debt relief on Wednesday with
\nJapan, the country's largest single donor, joining a group of
\nnations supporting the idea.<\/p>\n
According to a source, Japanese Prime Minister Junichiro
\nKoizumi would announce Japan's willingness to provide debt relief
\nfor disaster-stricken countries -- including Indonesia -- at
\nThursday's summit on the Asian tsunami where he is scheduled to
\ndeliver a speech.<\/p>\n
\"Prime Minister Koizumi will deliver a five-point initiative
\nin his speech to help the nations affected by the tsunami. And
\nthe most important point is Japan's readiness to provide a debt
\nmoratorium,\" the source told The Jakarta Post.<\/p>\n
The move would be a major step for Japan in its foreign-loan
\npolicy as no country has been granted such a moratorium or
\nrescheduling policy by the country before, the source added.<\/p>\n
Indonesia is the largest recipient of Japanese loans. Data
\nfrom Bank Indonesia shows that Japan's official development
\nassistance (ODA) to Indonesia stood at US$22.08 billion, as of
\nthe first quarter of 2004, of the country's $82.11 billion in
\ntotal outstanding foreign debt.<\/p>\n
\"The details of the conditions of the moratorium will be
\ndiscussed bilaterally further by senior government officials,\"
\nthe source said when asked about the details.<\/p>\n
The United States, Germany, France, Italy, Canada and the
\nUnited Kingdom have indicated their willingness to discuss a debt
\nmoratorium with tsunami-stricken countries to help compensate for
\nthe massive funds needed to rebuild their respective areas.<\/p>\n
The proposal will be discussed at a Jan. 12 meeting of the
\nParis Club, which groups 19 creditor nations that provide loans
\nto Indonesia. Overall, Paris Club debts total $47.8 billion, with
\n$3.15 billion in principal and $1.36 billion in interest maturing
\nin 2005.<\/p>\n
Last year, the Paris Club wrote off 80 percent of Iraq's $39
\nbillion foreign debt and interest repayments.<\/p>\n
Apart from the moratorium offer, Koizumi will also announce
\nthe dispatch of the country's largest-ever disaster relief
\ncontingent. The personnel will number up to 800.<\/p>\n
Indonesia was the hardest hit country in the Asian region with
\nmore than 94,200 fatalities in Aceh and North Sumatra.<\/p>\n
President Susilo Bambang Yudhoyono welcomed the idea and said
\nany form of debt rescheduling would benefit the country.<\/p>\n
Asked whether the relief would simply be in the form of debt
\nrescheduling or a write-off, he replied that he was not sure,
\n\"but even a rescheduling will still be a good opportunity\".<\/p>\n
Susilo was hopeful that the issue would also be discussed at
\nthe upcoming G-8 meeting.<\/p>\n
However, Australian Prime Minister John Howard told reporters
\nin Canberra he was not sure that a debt rescheduling would be the
\nbest option to help those in need.<\/p>\n
\"There is no guarantee that if you do it, what is forgiven or
\nwhat is the subject of a moratorium will end up going in aid,\" he
\nsaid as reported by Reuters.<\/p>\n
Indonesia has a debt of about A$1.4 billion ($1.1 billion) to
\nAustralia, also a member of the Paris Club of creditor nations.<\/p>\n
Stronger words came from the international agency Oxfam
\nadvocation director James Ensore, who said all funds from donors
\nfor emergency relief and the rebuilding process should come in
\nthe form of grants, instead of loans, if the donors indeed intend
\nto help the crisis-affected countries.<\/p>\n
Oxfam International is a confederation of 12 independent
\nagencies operating around the world. It estimated that the
\nforeign debt burden of the countries affected by the tsunami
\nreached about $300 billion, while the relief aid pledged stands
\nat about $30 billion.<\/p>",
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"sponsor": "Okusi Associates",
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