Japan agrees to reschedule RI's $2.8b sovereign debt
Japan agrees to reschedule RI's $2.8b sovereign debt
JAKARTA (JP): The Japanese government finally signed a formal
agreement with the government of Indonesia on Friday to
reschedule the latter's US$2.8 billion sovereign debt maturing
between 2000 and 2002.
The agreement was signed here by the Director General for
Foreign Economic Relations of the Ministry of Foreign Affairs
Makarim Wibisono and the Japanese Ambassador in Indonesia Yukio
Takeuchi.
The debt will be rescheduled into 15-20 years, but the country
must start making installment by 2004.
The debt rescheduling is part of the agreement reached by the
government in April 2000 with the Paris Club of creditor nations
to reschedule Indonesia's $5.8 billion sovereign debt.
Under the Paris Club mechanism, the government must further
negotiate with individual creditor nations over details of the
rescheduling.
The government has been trying to reach a final deal with the
Japanese government, the country's largest creditor, for about a
year.
Masaya Fujiwara, counselor of economic and development of the
Japanese Embassy, said that around 50 percent of the debt or $1.4
billion matured between April 2000 and March 2001, and the other
half matured in April 2001-March 2002.
He said that the rescheduling of the $1.4 billion debt
maturing in April 2001-March 2002 would only be implemented if
Indonesia reached a new economic agreement with the International
Monetary Fund (IMF).
"It will also be executed if the Indonesian government reach
an agreement with the IMF," he said, adding he was optimistic
that Indonesian government and IMF would reach a deal.
Relations between the government and IMF turned ugly after the
latter delayed the disbursement of its next loan tranche to the
country late last year amid signs that Indonesia was wavering
with the implementation of agreed economic reform program.
The worsening relations with the IMF had raised concern that
the government might fail to obtain the debt rescheduling
facility from the Paris Club, which is crucial to the
survivability of the 2001 state budget.
But new Coordinating Minister for the Economy Burhanuddin
Abdullah expressed optimism earlier this week that the IMF would
finally send its review mission to Jakarta sometime next month to
make a new agreement, which would pave the way for the
disbursement of the IMF loan.
Takeuchi said that the rescheduling demonstrated a strong
support from the Japanese government to help Indonesia focus on
its economic reforms.
"We would like to see the Indonesian economy get back in the
right track and then grow continuously," he told reporters after
the signing ceremony.
Meanwhile, Makarim said that the Japan's loan rescheduling
would enable the government to maximize government revenue for
the country's development.
"It is very helpful for the country as the debt maturities are
delayed between 15 and 20 years," he said.
Finance Ministry officials have earlier expressed optimism
that other Paris Club members would also finally sign a debt
rescheduling agreement with Indonesia. (05)