RI, Argentina are different: Minister
RI, Argentina are different: Minister
The Jakarta Post, Jakarta
Indonesia will not face a similar fate to Argentina because it
is facing different economic difficulties and is taking different
solutions to deal with its problems, economic minister Dorodjatun
Kuntjoro-Jakti announced, following a Cabinet meeting on
Thursday.
"In the Cabinet meeting we specifically reported on the
difference between Indonesia and what is being faced by
Argentina," Coordinating Minister for the Economy Dorodjatun
said.
He said Argentina, with a population of just 37 million, had a
foreign public debt of some US$130 billion while Indonesia, with
a 210-million-strong population had some $70 billion in public
debt.
While both are heavily indebted countries, they have different
debt structures, he added.
The bulk of Argentina's debt, some 95 percent, was obligatory
and largely privately syndicated, unlike Indonesia's debt, which
comes from international loans.
With the Argentine currency pegged to the dollar, its export
competitiveness will suffer greatly because of the dollar's
appreciation, while Indonesia had, on the contrary, benefited
from greater competitiveness and a larger variety of products,
Dorodjatun said.
"So we are very different from Argentina," Dorodjatun said.
Dorodjatun reaffirmed the government's commitment to honor its
obligation to repay its huge debt and would not follow
Argentina's move to halt payments of its debt.
"Our commitment is that we will honor all our foreign debt
payment obligations. We will not halt our debt payment," he said.
The new Argentinean administration declared on Sunday that it
was halting payments on its public debt, which stand at $132
billion, the biggest default in history.
Argentina's economic turmoil started when the International
Monetary Fund (IMF) decided last week to suspend a stimulus
package intended to bail out the country's already evaporating
economy.
The failure of Argentina to meet the required target of zero
deficit was the reason behind the fund's decision to suspend its
$1.3 billion in loans.