Govt to meet Paris Club in November

Govt to meet Paris Club in November

The government is to meet with the Paris Club of creditor
nations on Nov. 10 and Nov. 11 to seek the rescheduling of some
Rp 27 trillion (US$2.7 billion) in sovereign debt, both principal
and interest, to help ease the burden of the 2002 state budget,
said the deputy for international affairs at the office of the
coordinating minister for the economy Syafruddin Tumenggung.

He added that the government was also scheduled to meet with
the Consultative Group on Indonesia (CGI) on Nov. 7 and Nov. 8 in
Jakarta to seek some Rp 35.4 trillion in loans to help plug the
2002 state budget deficit.

Syafruddin was quoted by Antara on Wednesday as saying that
both Coordinating Minister for the Economy Dorodjatun Kuntjoro
Tjakti and Minister of Finance Boediono would lead the Indonesian
delegation at the meeting in Paris.

He said that the government had engaged in intensive
discussions with several Paris Club members, including Japan.

Boediono said late on Tuesday that the government was seeking
to reschedule some Rp 20 trillion in debt principal and Rp 7
trillion in interest payments to help next year's state budget.

Indonesia has never requested the rescheduling of interest in
the past. Last year, the Paris Club granted Indonesia a
rescheduling facility of some US$5.8 billion, but only for debt
principal.

With such a huge foreign debt payment requirement next year,
seeking the rescheduling of both principal and interest is
unavoidable to help maintain the budget deficit at a manageable
level of around 2.5 percent of gross domestic product.

The International Monetary Fund's Jakarta representative,
David Nellor, said on Tuesday that it was possible for Indonesia
to obtain the rescheduling of interest on top of the principal
rescheduling.

Several economists, however, fear that the move could
downgrade the country's sovereign rating and create new pressure
on the rupiah. -- JP