RI and France sign debt swap agreement

RI and France sign debt swap agreement

Agence France-Presse, Jakarta

The Indonesian government has signed an initial agreement with
France to convert US$65 million' worth of Jakarta's debt into
local currency via a sale to investors, it was announced Friday.

The main objective of the memorandum of understanding is to
boost foreign direct investment in Indonesia, said a statement
from the Indonesian economics ministry.

It said the $65 million debt available under the conversion
scheme represents part of Indonesia's outstanding debt to France
as of March 31, 2000. The amount may be increased as agreed by
the two governments.

Under the agreement, France will sell the eligible claims
above a minimum price to investors. The investor who buys the
claims can swap them against proceeds in rupiah.

It said the Indonesian government will pay a given price in
rupiah to the investor in exchange for the French claims.

All non-resident investors in Indonesia whose projects have
been approved by the authorities may buy part of the eligible
claims.

Foreign Minister Hassan Wirayuda is due to arrive in France
Friday to start an eight-day European visit that will also take
him to Austria, Slovenia and Portugal.

Approved foreign investment in Indonesia fell last year by 35
percent but it rose sharply in the first quarter of this year to
$2.49 billion, almost double the total for the same period in
2002.