Paris Club III set for April: Minister

Dadan Wijaksana, The Jakarta Post, Jakarta

The Paris Club donor countries and the International Monetary Fund (IMF) have agreed to hold talks with Indonesia in April to discuss the rescheduling of the country's sovereign debt maturing this year, according to finance minister Boediono.

"Since Jan. 17, several creditor nations and the IMF have been involved in preliminary meetings, in which they decided on April for talks with Indonesia," Boediono said on Monday.

The Paris Club groups together Indonesia's major sovereign creditors for talks on the rescheduling of debt repayments.

To help ease the burden on the state budget, Indonesia has been seeking debt rescheduling consideration over the past couple of years.

Unlike the previous years, however, the upcoming Paris Club III talks would be different, as Indonesia will not only seek the rescheduling of debt principal, but also interest rate payment, together totaling Rp 27 trillion (US$ 2.6 billion).

Of the amount, Rp 7 trillion is in the form of interest.

By comparison, Indonesia secured in 2000 a debt rescheduling scheme worth some $5.8 billion.

Although the move may risk Indonesia's rating, the government seems to have running out of alternatives given the huge foreign debt payment next year, which is projected at more than $10 billion.

The payment delay is also seen as crucial to the government's efforts to help maintain the 2002 state budget deficit at 2.5 percent of gross domestic product.

Elsewhere, Boediono also said that an IMF delegation was expected to visit in mid February to hold talks with the government regarding the fourth Letter of Intent (LoI) signed at the end of last year.