Paris Club reschedules Indonesia's debts<\/p>\n
PARIS (Agencies): The Paris Club of 19 government creditors
\nagreed on Thursday to reschedule US$5.8 billion in Indonesia's
\ndebts due to mature between April, 2000 and March 2002.<\/p>\n
Indonesian chief economics minister Kwik Kian Gie told
\nreporters after a day-and-a-half-long meeting here that
\nthe debt principals were rescheduled for 20 years.<\/p>\n
\"This result is quite encouraging and reflects international
\nconfidence in Indonesia's ability to recover its economy,\" Kwik
\ntold reporters after the signing of the rescheduling package
\nagreement.<\/p>\n
Kwik said $2.21 billion of the rescheduled debts originally
\nwould mature this year, $2.98 billion in 2001 and $717 million in
\nthe first quarter of 2002.<\/p>\n
\"The rescheduling package will greatly help us manage our debt
\nservicing burdens and our state budget,\" he added.<\/p>\n
President Abdurrahman Wahid, who was immediately briefed in
\nHavana on the agreement, expressed a great relief, saying \"our
\nwork is now fully accomplished.\"<\/p>\n
Abdurrahman, who is in Cuba to attend the summit of the Group
\nof 77 developing nations, expressed gratitude to the
\nInternational Monetary Fund and other institutions who backed
\nIndonesia at the Paris meeting.<\/p>\n
The President also thanked French President Jacques Chirac and
\nDutch Prime Minister Wim Kok for their full support to make the
\ndebt-rescheduling negotiations successful.<\/p>\n
Earlier last September, Indonesia and the Paris Club also
\nreached an agreement to reschedule $4.2 billion in debts that
\nwere due to mature by March, 2000.<\/p>\n
\"This is a clear signal of confidence we have in the
\nIndonesian economy,\" said Philippe de Fontaine Vive, vice
\nresident of the Paris Club.<\/p>\n
The accord hinges on recognition by the International Monetary
\nFund that Indonesia has implemented a series of reforms it
\nrecommended. A decision is expected by the IMF's board in early
\nJune. The IMF withheld $400 million in aid last month because it
\nwas not satisfied the nation had met conditions for releasing the
\nfunds.<\/p>\n
The debt rescheduling is expected to boost flagging foreign
\ninvestment and to also help Indonesian companies restructure $81
\nbillion in debt. It should also help the government reach its
\ntarget of 4 percent economic growth this year, after zero growth
\nlast year and a 13.2 percent contraction in 1998.<\/p>\n
The IMF will decide this week when to send a review team to
\nIndonesia, a prerequisite for releasing the money.<\/p>\n
The stalled $400 million IMF payment is part of a $5 billion,
\nthree-year loan the fund approved in February under an
\ninternational bailout plan worth more than $50 billion.<\/p>\n
The Indonesian Bank Restructuring Agency has met most of its
\nIMF obligations, including filing bankruptcy cases against four
\ncompanies and transferring bad debt from Bank Mandiri. IBRA said
\nit plans to sell about a third of PT Bank Central Asia in an
\ninitial share sale.<\/p>\n
Indonesia Finance Minister Bambang Sudibyo said the government
\n\"got what we asked for.\"<\/p>\n
The Paris Club's De Fountaine Vive said the rescheduling
\npackage is based on the Indonesian government's 1998 memorandum
\nof understanding with the Paris Club on the rescheduling of its
\nsovereign debt.<\/p>\n
The club's members are sure the new and improved agreement
\n\"should contribute to better capital inflows into Indonesia,
\nespecially from the private sector,\" he said.<\/p>\n
\"The current agreement is a clear signal for the markets of
\nthe Paris Club's confidence that the recovery of the Indonesian
\neconomy is there, and will be sustained,\" he added.<\/p>\n
Indonesian representatives were nevertheless candid about the
\ntask of pushing through future economic reforms through the
\nIndonesian legislature.<\/p>\n
\"We will have to fight hard for approval in Parliament,
\nbecause this is a real Parliament,\" said Bambang. (byg)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/paris-club-reschedules-indonesias-debts-1447893297",
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