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)