RI expects DM 50 million in debt-for-nature swap
RI expects DM 50 million in debt-for-nature swap
Tertiani ZB Simanjuntak, The Jakarta Post, Jakarta
The government is expecting to receive a 50 percent reduction
of the Dm 50 million that it owes Germany if a planned debt-for-
nature-and-sustainable-development-swap is agreed to by the
creditor nation in January 2002, an official said on Monday.
Director general for forestry protection and nature
conservation at the Ministry of Forestry, Wahjudi Wardojo, said
that the government was still waiting for approval from the
creditor on the swapping scheme to conserve five national parks.
Two of the national parks are located in Sumatra, two are in
West Java and East Java respectively and the other is on the
island of Lombok, he said.
He explained that in a proposal submitted by the Coordinating
Ministry for the Economy last October, the government had
negotiated the writing off of the Dm 25 million in exchange for
Indonesia financing the conservation of the national parks.
"We have not yet heard from our counterpart. But we expect
that the scheme would be able to take place in January," he said
at his office, adding that both countries had a similar fiscal
year that starts in the first month of each year.
Wahjudi said that in the negotiations, Germany had required
assurances that the government could control the scheme and that
the current amount of financing to the national parks was similar
to the amount the scheme had given.
Therefore, the government is waiting for commitment from the
Ministry of Finance and the National Development Planning Agency
(Bappenas) to increase the funding from the current $1 million to
$5 million for each national park.
DNDS is a scheme intended to reduce the country's foreign debt
by swapping it for the commitment to use its domestic financial
resources for conservation activities.
The scheme is favored by Jakarta to lighten its heavy debt
burden, which forces the government to allocate more of its
budget for debt repayments than for development.
In the 2002 budget, Indonesia has to reimburse up to Rp 130
trillion ($13 billion), or some 44 percent of total revenues,
while development spending gets only Rp 47.1 trillion, or only
about 2.8 percent of the estimated gross domestic product (GDP).
The government also has to gradually pay back its Rp 656.7
trillion in domestic debts, which should be settled in 2018 and
another $1.3 billion this year to pay the loan from the
International Monetary Fund (IMF)'s economic recovery programs.