JITF's life extended until end of 2003

The Jakarta Post, Jakarta

The Financial Sector Policy Committee (FSPC) has approved the request of the Jakarta Initiative Task Force (JITF) to extend its mandate for another year until the end of 2003, according to a government official.

Mahendra Siregar, an expert staff at the Office of the Coordinating Minister for the Economy, said on Monday that the extension was needed because the Task Force could not fully complete its debt restructuring workload by the time its tenure expired at the end of this year.

"The FSPC has recognized that the JITF would not able to meet the deadline, therefore the FSPC granted them the extension," he told The Jakarta Post.

The FSPC groups a number of senior economics ministers and has the final say on the country's major corporate and bank restructuring programs.

Established by the government in 1998, the JITF is in charge of restructuring the country's huge corporate debts, especially those owed to foreign creditors.

It plays a role as a mediator between the indebted corporate sector and creditors. But debtors and creditors cannot be forced to apply for a JITF facilitation program.

The total foreign debt owed by the country's corporations amounts to around $70 billion.

JITF said earlier that of some $30 billion in corporate debt registered with the Task Force, the JITF had managed so far to finalize the restructuring of some $15.4 billion in debt, meaning that it needed more time restructure the remaining $14.6 billion.

For this year, the JITF is planning to mediate the restructuring of debts worth up to $4 billion.

The establishment of the JITF was also aimed at helping revive the country's anemic real estate sector, which faces difficulties in obtaining credit lines due to its huge debt burden.

A successful debt restructuring program is also seen as being crucial in returning confidence to foreign investors.