Nine states offered debt relief<\/p>\n
Agencies, Jakarta<\/p>\n
Wealthy creditor nations have offered to let nine tsunami-hit
\ncountries halt repayments on billions of dollars of debt, but
\nonly three said they planned to accept the Paris Club's proposal.<\/p>\n
Jean-Pierre Jouyet, chairman of the Paris Club of creditor
\nnations, said in Paris that countries directly affected by the
\nDec. 26 Indian Ocean earthquake and tsunami could halt debt
\nrepayments if they wanted to.<\/p>\n
The moratorium could last up to a year, depending on
\nassessments by the International Monetary Fund. It will \"allow
\nthese countries to dedicate all available resources to address
\nhumanitarian and reconstruction needs,\" Jouyet was quoted by AP
\non Wednesday.<\/p>\n
Only Sri Lanka, Indonesia and the Seychelles have expressed
\ninterest so far. Some countries have suggested that a debt
\nmoratorium is not the most appropriate response to the disaster.<\/p>\n
Indonesia, while signaling that it plans to take up the offer,
\nhas said cash would be more useful. The country would be the
\nbiggest beneficiary of the moratorium, saving US$3 billion in
\ndebt repayments due this year, Jouyet said.<\/p>\n
\"We will continue to have discussions on this offer of a debt
\nmoratorium,\" Indonesian Foreign Minister Hassan Wirayuda was
\nquoted by AFP in Berlin after talks with German counterpart
\nJoschka Fischer.<\/p>\n
\"They want grants,\" German Finance Minister Hans Eichel said.
\n\"Indonesian creditworthiness in capital markets shouldn't be
\ndamaged under any circumstances.\"<\/p>\n
The most indebted of the affected countries, Indonesia was
\nalso hardest hit by the earthquake and tsunami with more than
\n110,000 people killed.<\/p>\n
In Jakarta, the government says it will carefully consider the
\noffer from the creditor nations.<\/p>\n
\"If the offer does not fit our policies, we will not submit
\nany request for a debt moratorium,\" Minister for Finance Yusuf
\nAnwar said on Thursday.<\/p>\n
\"The assessment will take up to three months before the Paris
\nClub considers further policies based on each country's situation
\nand request.\"<\/p>\n
Coordinating Minister for the Economy Aburizal Bakrie said the
\ngovernment would not be hasty in accepting the debt moratorium
\noffer, although its immediate $350 million relief during the
\nthree-month assessment period would certainly ease the debt
\nburden on the state budget.<\/p>\n
\"We can ask for a moratorium of up to five years but only if
\nwe join the IMF program, which we don't want to do,\" he said.<\/p>\n
The previous government terminated all IMF programs last year
\nalthough the country is still under a post-program monitoring
\nscheme following public pressure.<\/p>\n
The central bank's foreign affairs director, Kusumaningtuti,
\nsaid Indonesia could have received debt relief of nearly $5
\nbillion if the government could convince the Paris Club that the
\ncountry was highly indebted due to the tsunami.<\/p>\n
The Paris Club's Naples Terms, she said, stipulates that a
\ndebt reduction can reach up to 67 percent of the total non-
\nofficial development foreign debt in the form of non-official
\ndevelopment assistance (ODA).<\/p>\n
She added that Indonesia could also request debt cancellation
\nof up to $218.5 million from various projects in Aceh and North
\nSumatra which were financed by foreign loans.<\/p>\n
\"The projects are now devastated and rendered useless by the
\ndisaster, so it is only appropriate that repayment of the loans
\nare canceled,\" she said.<\/p>\n
Kusumaningtuti suggested that the government intensify the
\nimplementation of debt swap schemes with creditor countries,
\nwhich could see debt relief of up to $818 million, particularly
\nwith Indonesia's major creditor Japan. Japan has contributed 35
\npercent of the country's outstanding foreign debt of $79 billion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/nine-states-offered-debt-relief-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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