Minister calls for Japanese aid to go on

Minister calls for Japanese aid to go on

TOKYO (Dow Jones): The political vacuum in Japan will hurt the
yen and increase uncertainty in the region, Indonesia's
Coordinating Minister for Economy, Finance and Industry Ginandjar
Kartasasmita said yesterday.

Ginandjar told reporters in Tokyo that he hopes Japan's
political crisis will not affect the country's direct support for
Indonesia. He said past changes in the government haven't
affected bilateral assistance pledges.

But Ginandjar said he is concerned the "vacuum may have some
indirect effects on us." He added that "the vacuum itself may
also create uncertainty in this region."

Ginandjar said that he plans to ask Japanese government
officials, including the finance minister, to support the
additional US$6 billion aid for Indonesia.

He said the request is being coordinated by the International
Monetary Fund, but that he was to explain Indonesia's
requirements to the various governments that control the IMF.

"It will be a full day," Ginandjar said.

The minister said that he will speak with Japanese officials
Tuesday about securing an additional $6 billion in aid to
Indonesia under auspices of the IMF. He declined to say how much
of that aid will be specifically requested from Japan.

"As far as we are concerned, it is the $6 billion that is
important," Ginandjar said, adding that the sources and breakdown
of the funds were not important.

Ginandjar also said he hopes the meeting of the Bank for
International Settlements in Tokyo yesterday and the meeting of
central bankers from around Asia on Tuesday will produce some
sort of action or understanding to stabilize currencies in the
region, especially the yen and the Chinese yuan.

"I think this is the responsibility of central bankers," the
minister said. "They cannot do it alone -- there has to be an
international effort."

Commenting on a meeting between Indonesian officials and
representatives from Japanese banks yesterday morning to promote
Indonesia's plan to restructure about $80 billion in bank and
corporate debt, Ginandjar said Japanese banks don't seem opposed
to the plan.

He said that there were three options available for creditors
and Indonesian borrowers: to join the plan, to come up with an
alternative agreement among themselves, or for the borrowers to
go bankrupt.

Debt roadshow

Indonesian officials met with representatives from Japanese
banks yesterday morning to promote the Southeast Asian nation's
plan to restructure about $80 billion in bank and corporate debt,
and delegates leaving the meeting said talks progressed smoothly.

"It went satisfactorily," said Nalin P. Samarasinghe, resident
representative at the Japan office of the Asian Development Bank
after the meeting. Samarasinghe said the meeting consisted mostly
of an explanation of the restructuring program by Ginandjar
Kartasasmita, Indonesia's coordinating minister for economy,
finance, and industry.

A delegate leaving the meeting said there were a few technical
questions from Japanese banking representatives on the
restructuring program. He added that the banks seemed optimistic
about joining the scheme.

The delegate added that there were also some questions on
exactly how the Indonesian Debt Restructuring Agency (INDRA) will
protect Indonesia's currency -- an integral promise made in the
debt restructuring plan agreed to last month.

Indonesia and a steering committee of international creditors
agreed June 4 to restructure $80 billion in foreign private debt
to alleviate pressure on the country's cash-strapped companies
and shaky foreign exchange markets.

The June agreement is voluntary for both Indonesian debtors
and their foreign lenders. Indonesian government officials and
debt committee members are therefore marketing the deal in six
major cities worldwide. Tokyo is the fourth stop on their global
tour.

Ginandjar told the meeting that an agreement on interbank debt
will give immediate relief to pressures on the foreign exchange
market and help to strengthen the rupiah, according to prepared
remarks made available to the press. He said that it is necessary
to extend the maturities of the external debts of Indonesian
banks to allow time for financial reform measures to take hold
and for banks to regain access to markets.

"The extension of maturities will create a manageable maturity
profile and substantially aid Indonesia's balance of payments.
Again, participation by all creditors is critical to the success
of our efforts," Ginandjar said.