Japanese govt pledges to assist Indonesia

Japanese govt pledges to assist Indonesia

JAKARTA (JP): The Japanese government has reaffirmed its
previous pledge that it would help Indonesia resolve its economic
crisis.

A Japanese economic mission, led by Tadao Chino, assured the
President yesterday that Japan would do its best to help
Indonesia.

"In the talks with the President, I conveyed Japan's
determination as an old friend to support Indonesia in overcoming
the problems it faces," Chino said yesterday.

Chino, an advisor to the Japanese finance ministry, said Prime
Minister Ryutaro Hashimoto sent his delegation to Indonesia to
obtain first-hand information from the government and to
determine the most appropriate ways to help the country.

Chino said he agreed with Soeharto that the country's major
problems revolved around its private sector debt and import
troubles.

"I and the President agreed to have further contacts in
solving the problems faced by Indonesia," said Chino.

Indonesia's private corporate debt as of December totaled
US$73.96 billion of the country's total $137 billion debt.

The government has reported that $23.07 billion of the
corporate debt is owed by private Indonesian companies, while the
remainder is owed by foreign firms and joint-venture companies.

Indonesia is also currently facing serious problems in
importing goods because many foreign banks are rejecting letters
of credit issued by Indonesian banks.

Japan is Indonesia's biggest creditor and most important
trading partner. The country pledged $5 billion in aid to
Indonesia last year as a part of the $43 billion rescue package
sponsored by the International Monetary Fund (IMF).

Japanese diplomats said yesterday Japan might also raise the
issue of Indonesia's problems at the forthcoming finance
ministers' meeting of the Group of Seven (G-7).

"We are closely watching the situation here, and we are
prepared to give all possible assistance to Indonesia," a
diplomat, who ask not to be named, said yesterday.

Meanwhile, Chino told a news conference at the Japanese
embassy yesterday that Indonesia should be very cautious about a
planned currency peg.

Chino said he had examined the proposal, under which the
Indonesian rupiah would be rigidly fixed to a dollar exchange
rate.

"They (the government) should be very, very careful to see if
the prerequisites are here," Chino was quoted by AFP as
saying.

"Without the preparation of such prerequisites, implementation
will not be very successful." He did not elaborate on what the
prerequisites were. (prb)