Japan pledges to guarantee RI imports<\/p>\n
JAKARTA (JP): A visiting special envoy from Japanese Prime
\nMinister Ryutaro Hashimoto said here yesterday Japan would
\nprovide trade guarantees to back up Indonesian imports.<\/p>\n
The Japanese envoy said the trade financing facilities would
\nbe channeled through Japan's Exim Bank.<\/p>\n
\"On the opening of Indonesian letters of credit (L\/Cs), Japan
\nis determined to assist through a trade insurance scheme issued
\nby Japan's Exim bank,\" Yoshiro Hayashi said after meeting with
\nPresident Soeharto at his private residence on Jl. Cendana,
\nCentral Jakarta.<\/p>\n
He, however, did not provide details on the plan.<\/p>\n
Indonesian importers are facing credit problems to import
\ntheir products as letters of credit issued by Indonesian banks
\nare often rejected by banks abroad.<\/p>\n
Singapore Prime Minister Goh Chok Tong has proposed the
\nestablishment of a multilateral committee to guarantee Indonesian
\nL\/Cs. Goh's initiative, expected to generate a US$20 billion
\nfund, has yet to materialize.<\/p>\n
During Hayashi's meeting, the President was accompanied by
\nState Minister of Research and Technology B.J. Habibie. Habibie
\nand Hayashi jointly chair the Japanese-Indonesian Forum for
\nTechnology.<\/p>\n
\"Japan is determined to continue its assistance and support
\nfor Indonesia in stabilizing its rupiah and to restore its
\neconomy,\" said the former minister of finance.<\/p>\n
The steep appreciation of the dollar against the rupiah since
\nJuly has led prices of most goods, including medicine, to
\nskyrocket. Most raw materials for local medicine production are
\nimported.<\/p>\n
The rupiah was trading at 12,000 to the dollar late Friday
\nmorning, compared to 2,450 to the dollar before the currency
\nbegan its free fall last July.<\/p>\n
The high prices of imports and the inability of producers to
\nimport raw materials following the rejection of Indonesian
\nletters of credit abroad has forced production cuts, leading to
\nshortages of medicines.<\/p>\n
Hayashi also told the President that the Japanese cabinet
\ndecided yesterday to provide Indonesia a 1.02 billion ($8.2
\nmillion) grant to help the country face medicine shortages and
\nprice increases.<\/p>\n
According to the Japanese Embassy, the $8.2 million grant is
\npart of Tokyo's $8 billion dollar rescue package for Indonesia
\nannounced Feb. 20.<\/p>\n
Japan decided last month to provide a $1 billion credit line
\nfor Japanese companies in Indonesia which finance locally
\noperated companies.<\/p>\n
Japan is Indonesia's main trading partner and also its biggest
\ncreditor.<\/p>\n
When asked about the President's plan to peg the rupiah to the
\ngreenback at a fixed exchange rate under a currency board system
\n(CBS), Hayashi responded cautiously: \"CBS is not the only way to
\nrestore the Indonesian economy. There are many things or policies
\nwhich need to be carried out to restore confidence in its
\neconomy.\"<\/p>\n
Japanese Vice Finance Minister for International Affairs
\nEusuke Sakakibara urged Indonesia Tuesday to investigate the
\nfeasibility of the CBS.<\/p>\n
Finance Minister Hikaru Matsunaga also said Indonesia's
\ncurrency turmoil was not over and that the situation here was
\nstill severe.<\/p>\n
\"We are closely following the situation here, especially with
\nthe election of the president and vice president and the
\nformation of the new cabinet,\" a Japanese official, who spoke on
\ncondition of anonymity, said yesterday. (prb)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japan-pledges-to-guarantee-ri-imports-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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