Holland provides trade financing guarantees to RI

Minister of Economic Affairs Wijers and Minister of Finance Zalm have, in consultation with Minister of Foreign Affairs Van Mierlo, have decided to provide a credit-insurance facilities for short-term export transactions with Indonesia to an amount of NGL 250 million for this current year.

Calculating an average credit term of about three months, a total export volume of NGL 1 billion (US$500 million) can be realized on a yearly basis.

The Netherlands Government expects that the facility will have a positive effect on trade between the Netherlands and Indonesia.

The facility will enter into force after the latest agreement between the IMF and Indonesia has been formalized and as soon as the IMF has announced to resume payment to Indonesia and will be administered by the Netherlands Credit Insurance Company (NCM).

Apart from the new facility, it has also been decided to intensify The Netherlands Management Cooperation Program (NMCP) and the Scholarship and Practical Training Program. The two programs are executed by VNO/NCM, the Netherlands employers organization.

The three measures have been taken in consultation with the Netherlands business community at a round-table conference convened by Minister Wijers. The feasibility of other suggestions from the Netherlands' business community is still subject to further investigation.

Due to the economic crisis, the Netherlands trade with Indonesia has practically come to a standstill, entailing negative consequences for the Indonesian people and the Netherlands business community. The new trade financing facility allows for a resumption of imports into Indonesia, necessary for local production and export from Indonesia.

It will hopefully bring back confidence in the Indonesian economy, resulting in a stronger rupiah. It is also foreseen that through the Netherlands trade financing guarantees for Indonesia, the import of (raw materials for) essential goods and medicines will be facilitated.