Holland to set up trade facility for RI firms

JAKARTA (JP): Deputy Prime Minister of the Netherlands Hans van Mierlo said here yesterday the Dutch government planned to establish a trade facility to guarantee Indonesian imports.

"The Netherlands is examining the possibility of setting up, in a multilateral framework, a special trade guarantee facility that could enable Indonesian companies to continue the production of goods and import necessities," van Mierlo, who is also the Dutch foreign minister, said.

Speaking before the Indonesia-Netherlands Association and Forum Indonesia-Netherlands, he said the proposed facility was part of the country's efforts to help rescue Indonesia from the economic crisis.

On Feb. 3, Singapore Prime Minister Goh Tok Chong proposed the establishment of a multilateral committee to guarantee letters of credit (L/C) issued by Indonesian banks.

Indonesian importers have complained that their L/Cs were rejected by foreign banks for fear that the local banks could not service their commitments.

Van Mierlo, who arrived here Tuesday evening for a three-day visit, said Dutch commercial banks had also pledged to participate in order to help settle the Indonesian private sectors' mounting foreign debts.

The banks participated in a 90-day freeze for foreign loans to Indonesia's private sector. They had also agreed to roll over the loans, he said.

"ABN/AMRO (a leading Dutch bank) is very active in Indonesia, and the Steering Committee of Lender Banks, is working on a solution for restructuring the private debts."

Van Mierlo is scheduled to meet President Soeharto today.

Last month, the Indonesian government announced a de facto moratorium for offshore loans made by the country's private sector, which is estimated to amount to US$73 billion.

About $23.07 billion of the total is owed by private national companies and the remainder by foreign and joint venture firms.

Government representatives have been asking lender countries such as Japan to negotiate the rollover of loans.

"To a certain extent, the international financial sector has a shared responsibility for supplying credit without sufficient surveillance," van Mierlo said.

The Netherlands has contributed more than $300 million as part of the $43-billion bailout package arranged by International Monetary Fund (IMF) to cope with the Indonesian crisis.

"Furthermore, we have emphasized that further study is needed on ways of achieving more equitable burden-sharing among international financial institutions, bilateral governments and commercial creditors," he said, adding that the Dutch government would follow up on the issue with the IMF.

Touching on the role of the European Union in the recovery of Southeast Asian economies, he said the union had no institutional framework to furnish financial support to correct the imbalances of payment in Asia.

Instead, the European member states channeled their financial assistance through other institution such as the IMF, the G-7 and G-10, he said.

But countries in the European Union and Southeast Asian region could further intensify the exchange of thoughts on how Europe can assist the governments to overcome the crisis, he said. (das)