IMF to mull debt relief for RI
The Jakarta Post, Jakarta
The International Monetary Fund (IMF) has joined the increasing number of creditors willing to consider granting Indonesia debt relief to help cushion the massive financial impact of the Aceh and North Sumatra calamity.
An IMF official, speaking on condition of anonymity, said on Wednesday in Washington that the agency would be willing to talk about debt rescheduling with Indonesia.
Indonesia owes the agency some US$9.9 billion as of April 2004.
"We are offering whatever assistance we can give and indicating to them that, when they feel that they can turn to how we might help, we will be there," he said as reported by AFP.
Some $1.5 billion of the debt is expected to mature in 2005.
The IMF, which consists of 184 member countries and has $97 billion in loans outstanding to 84 nations, would be ready to consider adjusting loan repayments by Indonesia, the official added.
According to Bloomberg, the Washington-based global lender may also provide emergency disaster funds to other affected countries such as Sri Lanka, Thailand, the Seychelles and Malaysia.
Tsunami as high as 10 meters swept through coastlines across the Indian Ocean on Dec. 26, triggered by a powerful magnitude 9.0 earthquake off the coast of Indonesia.
The death count in Indonesia's two provinces alone has reached more than 80,000.
As body counting continues, a huge amount of money will also have to be set aside to help deal with the tragedy, both for humanitarian aid to the victims as well as for financing the rebuilding of severely-damaged infrastructure in the area.
"There has never been anything this sweeping," for the IMF to grapple with, the official said. "There has never been a disaster as horrific as this in terms of its multi-country impact and magnitude."
The IMF's offer comes after Italy, Germany, and the U.S. earlier indicated their willingness to consider offering debt relief to tragedy-hit countries, including Indonesia.
In a statement, Italian prime minister Silvio Berlusconi said he would "study the possibility of canceling aid credits owed by affected Asian nations".
Germany said it would propose a debt moratorium for Indonesia and Somalia when the Paris Club of creditor nations next meets on Jan. 20, while U.S. president George Bush also stated the U.S. would be "open to all requests" to help suffering nations cope with the tragedy.
Meanwhile in Jakarta, Minister for Finance Yusuf Anwar on Thursday welcomed calls for a moratorium on the country's debt repayments, including the one proposed by Germany.
"That is very good if it is true, as it shows international efforts to alleviate our fiscal burden and reduce our debt servicing as well reducing our interest payments," Yusuf said.
He added that the government would immediately follow up on the offer by arranging bilateral talks with creditors, including those grouped under the Paris Club, a grouping of 19 creditor nations and multinational institutions.
Indonesia's total foreign debt stood at $82.1 billion as of the first quarter of 2004, according to central bank data, with around half of this owed to Paris Club nations.
Under the 2004 state budget, for servicing interest payments on foreign debt alone, the government has to set aside some Rp 23.4 trillion.