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)