Govt starts debt payment deferrals: Minister<\/p>\n
JAKARTA (JP): Indonesia began deferring payments of its
\nsovereign debt this month in line with agreements made with the
\ncountry's major international lenders, a senior minister said
\nyesterday.<\/p>\n
Coordinating Minister for Economy, Finance and Industry
\nGinandjar Kartasasmita added that Indonesia may defer more
\nsovereign debt payments for the 1999\/2000 fiscal year if the
\neconomic situation demanded it.<\/p>\n
He said reports that the country had missed sovereign debt
\npayments for August were inaccurate, noting that the country had
\nsimply begun to implement an agreement reached with the
\nInternational Monetary Fund (IMF) and the Paris Club of creditor
\nnations.<\/p>\n
\"This is not a default,\" Ginandjar told journalists before a
\nCabinet meeting at the Bina Graha presidential office. \"What we
\ndid has already been told to the donor countries.\"<\/p>\n
He stressed that the government would only defer payment of
\nits debt principal but would continue to pay the interest.<\/p>\n
The head of the Ministry of Finance's legal and public
\nrelations bureau, Hadiyanto, noted in a statement that the
\nsovereign debt rescheduling would apply to bilateral debts.<\/p>\n
The rescheduling of the government's bilateral debts began
\nAug. 6, Hadiyanto said.<\/p>\n
\"Debts other than bilateral ones, like bonds and commercial
\nloans, will still be serviced,\" he said.<\/p>\n
Ginandjar said the sovereign debt rescheduled this fiscal year
\nwould total US$1.25 billion, as agreed with the IMF and the Paris
\nClub.<\/p>\n
\"We will discuss the issue again for the next fiscal year,\" he
\nsaid. \"If we still need to, we'll repropose it next year.\"<\/p>\n
The $1.25 billion is part of an additional $6.2 billion in new
\nfinancial aid to Indonesia arranged by the IMF. The funds were
\ncommitted by, among others, international lenders which agreed to
\nreschedule debt payments.<\/p>\n
The government previously said that countries which had agreed
\nto reschedule debt payments included the U.K., the U.S., France
\nand Germany.<\/p>\n
Japan and other bilateral lenders and international financial
\ninstitutions chose to give Indonesia fresh loans to repay its
\ndebts to them.<\/p>\n
Ginandjar said Japan had committed $1 billion to Indonesia for
\ndebt servicing.<\/p>\n
Details on the sovereign debt rescheduling are to be fleshed
\nout at a meeting of Paris Club members in the French capital on
\nSept. 22 and Sept. 23, at which Indonesia will be represented by
\nMinister of Finance Bambang Subianto.<\/p>\n
Ginandjar said the current debt rescheduling, however, would
\nnot be extended for 30 years -- as was the case in the early
\n1970s when the country was recovering from the economic turmoil
\nof the previous decade.<\/p>\n
\"Maybe it will not be for that long, only for the current
\nperiod of hardship or during the time when we want to safeguard
\nour balance of payments.<\/p>\n
\"If our economy is recovering and our exports are back to
\nnormal, we can fulfill the repayments. We're going to discuss
\nthose problems with the Paris Club.\"<\/p>\n
Ginandjar said the timing would be governed by several
\nfactors, including the successful implementation of the Frankfurt
\nagreement between Indonesian private debtors and international
\nbanks to reschedule the country's massive private sector debt.<\/p>\n
\"We will also look at the Russian method,\" Ginandjar said.
\n(prb\/rid)<\/p>",
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