Japan to give 1.3b yen in trade financing

JAKARTA (JP): The government of Japan will provide Indonesia with 1.3 billion yen (US$9.74 million) in trade financing in addition to other financial aid it has already pledged to help the country, a senior Japanese official said here on Monday.

Japan's minister of international trade and industry, Kaoru Yosano, said the new loan reflected his country's desire to help Indonesia survive its worst ever economic turmoil.

Earlier this year, Japan pledged to contribute US$5 billion to the $43 billion rescue package brokered by the International Monetary Fund (IMF) to help Indonesia through the crisis.

It has also provided $1 billion in trade financing through its Exim Bank and a further $1 billion for trade insurance to "anticipate problems affecting trade activities," Antara quoted Kaoro as saying.

Kaoro led a delegation of top economic officials from the Japanese government on a two-day visit here which ended on Monday.

During his visit, he met with President Habibie, Minister of Industry and Trade Rahardi Ramelan, and Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita.

Kaoro told reporters after Monday's meeting with Habibie that political stability in Indonesia was crucial to stability throughout the region.

He expressed optimism and said Indonesia had a "very promising" future despite the deepening crisis, pointing to its vast size and natural resources.

"Indonesia is facing difficulties right now, but the economic future of Indonesia is very promising because the country is richly endowed with natural resources and the government is enthusiastically involved in political and economic reform," he said.

He said Japan would do whatever it could to help restore economies across the Southeast Asian region, all of which have been damaged to varying degrees by the economic crisis which began last year.

Kaoro said the Japanese automotive industry would hold discussions with its Indonesian counterparts at the end of this year.

The dialog will involve government representatives, business leaders and bankers from both countries and will aim to develop new ideas in the automotive industry, he said.

He said his country would also help finance the training of 10,000 workers in Indonesia's automotive sector who have lost their jobs.

The Japanese government will finance three quarters of the training program, while the industry will finance the remainder, he said.

Japan has also vowed to help Indonesia provide the growing number of poor in the country with a greater degree of social security.

It has pledged to provide 500,000 tons of unhusked rice in the form of a loan and to donate a further 50,000 tons of rice to help Indonesia combat widespread food shortages. (das)