Japanese experts upbeat on RI's debt<\/p>\n
JAKARTA (JP): Indonesia's external debt will be manageable,
\neven at a moderate economic growth rate of between 3 percent and
\n4 percent, as long as export growth occurs sufficiently faster
\nthan import growth, according to a proposal by five prominent
\nJapanese economists.<\/p>\n
\"In our view, Indonesia is not insolvent, and will remain
\nsolvent as long as the economy is well managed,\" stated the
\nproposal publicized here late on Wednesday.<\/p>\n
The report said that the \"growing out of debt\" strategy would
\nbe achieved through the expansion of exports which did not lead
\nto corresponding import growth.<\/p>\n
It added that measures must be taken to promote economic
\ngrowth by channeling domestic and external resources into
\nproductive and viable investment projects.<\/p>\n
\"These measures should include the continued efforts in
\nbanking reform and corporate debt restructuring, development of
\nsound financial and capital markets, and a sufficiently stable
\nexchange rate regime to retain export competitiveness,\" the
\nproposal said.<\/p>\n
Indonesia's total external debt at the end of March 1999 was
\nestimated at US$146 billion, or about 85 percent of gross
\ndomestic product. More than $70 billion of the total debt is owed
\nby the public sector.<\/p>\n
The government recently said that it had no plans to seek
\nadditional debt relief, despite strong pressure from leading non-
\ngovernmental organizations and legislators.<\/p>\n
\"We welcome the decision of the new administration to honor
\nthe existing public debt obligations, while effectively easing
\nthe payment burden through new financing and rescheduling,\" the
\nproposal said.<\/p>\n
The report said that taking debt reduction steps would prompt
\nthe international financial markets to lend to Indonesia.<\/p>\n
The government has said that it intends to seek a rescheduling
\nfacility on its $2 billion foreign debt maturing next year.<\/p>\n
The government plans to meet with the Paris Club creditors
\ngrouping sometime in January.<\/p>\n
Meanwhile, Japanese deputy vice finance minister Takatoshi Ito
\nsaid on Wednesday that Japan would support Indonesia's efforts to
\nease the burden of its public sector external debt obligations by
\nproviding new debt financing.<\/p>\n
\"I think Japan is more forthcoming than the other creditors,\"
\nIto told The Jakarta Post on the sidelines of a media conference
\nabout publication of the proposal at Bank Indonesia.<\/p>\n
He said the Japanese commitment would be made at the meeting
\nbetween Indonesia and the Paris Club.<\/p>\n
He said that an approval of the country's new letter of
\nintent, which is basically part of the government's economic
\nstrategy, by the International Monetary Fund would pave the way
\nfor the Paris Club meeting.<\/p>\n
The IMF is expected to approve the new letter of intent
\nsometime in the middle of next month.<\/p>\n
The Japanese economists also reminded Bank Indonesia to pay
\nclose attention to the stability of the rupiah not only against
\nthe U.S. dollar but also against other major currencies,
\nincluding the Japanese yen.<\/p>\n
\"Japan is one of Indonesia's trading partners,\" said Masaaki
\nKomatsu, an economist at the Hiroshima University, one of the
\neconomists responsible for the proposal.<\/p>\n
\"A currency basket should be used at least as a criterion for
\nassessing the appropriateness of the exchange rate policy,\" he
\nsaid. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/japanese-experts-upbeat-on-ris-debt-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}