Japanese lenders 'flexible' over loans
Japanese lenders 'flexible' over loans
JAKARTA (JP): Japanese creditors are offering flexibility to help Indonesian borrowers overcome their increasing debt problems caused by the steady appreciation of the yen.
"I think there is flexibility to eliminate some individual problems. And we have to solve them on a case by case basis," Kenji Kawakatsu, vice chairman of the Japan Federation of Economic Organizations (Keidanren), said here yesterday.
Kawakatsu, also senior advisor to Sanwa Bank, Ltd., acknowledged that the surge of the yen value against other major currencies could not be cured by offering short-term lending.
"That's a totally different matter," Kawakatsu said in a press conference headed by Keidanren's chairman, Shoichiro Toyoda. Yesterday the Keidanren delegation ended its three-day visit to Indonesia.
Kawakatsu suggested that Indonesian borrowers negotiate with their lenders in Japan whenever they face debt servicing problems.
Economist Dorodjatun Kuntjoro-Jakti suggested last month that Indonesia draw on fast-disbursing, soft-term loans to accelerate the repayment of its yen-denominated debts, especially those with heavier terms or those due for repayment.
The yen has appreciated by 23 percent against the Indonesian rupiah since early January. Some 40 percent of Indonesia's foreign debt of about US$87.6 billion -- of which $58.6 billion is owed by the government -- is in yen.
Indonesia's private sector debts in yen denomination are expected to exceed the figures compiled by the government due to high private investment from Japan. As of last December, Japan was still the largest investor in Indonesia, with 20 percent of the country's foreign investments, or US$18.6 billion.
Japan said last week, however, that it had no plans to ease the burden of its Asian borrowers, including Indonesia.
During their three-day visit here, the Keidanren delegates met with President Soeharto, Vice President Try Sutrisno, a number of ministers and executives from the Indonesian Chamber of Commerce and Industry.
Concern
After meeting with Soeharto yesterday, Toyoda, who led the delegation, said that the President expressed his concern with the yen appreciation.
"President Soeharto told us that because of the yen appreciation, Indonesia is suffering from its impact. And we replied that Japan is taking counter measures," Toyoda said at yesterday's press conference.
Toyoda, also chairman of Toyota Motor Corp., voiced hope that the yen would be more stable on international currency markets in response to yen-stabilizing measures taken by Japan last week.
Last Friday, Japan announced its economic stimulus package, including a broad outline for quicker deregulation, more imports and greater domestic demand.
Indonesian Minister of Industry Tunky Ariwibowo told journalists that President Soeharto asked for Keidanren's help in opening up Japan's market to Indonesian products. (rid)