RI set to assist in debt management

RI set to assist in debt management

JAKARTA (JP): Coordinating Minister of Economy and Finance
Saleh Afiff said here yesterday that Indonesia is ready to
provide technical assistance to help the least developed
countries (LDCs) manage their debts.

"We are ready to provide technical assistance especially in
helping the debt-ridden countries negotiate with their
creditors," he told the press following the closing of the
second-day session of the ministerial meeting of the Non-Aligned
Movement (NAM).

Afiff said that the recommendations prepared by the NAM's
advisory group of experts on external debt, which included the
proposal to cut debts of LDCs by 70 percent and a change in the
international debt policy, was welcomed in the meeting. It was
attended by representatives of the NAM's 31 least developed
members.

The minister, who presided over the meeting yesterday, said
that a number of participants had asked President Soeharto in his
capacity as NAM chairman to submit the recommendation to
creditors.

Some others had requested the NAM chairman seek a possible
cooperation in debt management, he said.

"But if the question is whether Indonesia would also provide
financial assistance. The answer is clear... we don't want to
take over their debt problem," he said when asked about the
assistance Indonesia could give in solving the debt crisis of the
poorer nations.

Indonesia, which has foreign loans of around US$90 billion,
has been widely recognized for its success in managing its huge
debts.

Meanwhile Dennis de Tray, a representative of the World Bank
in Jakarta, said that creditors -- especially multilateral
financial agencies -- would face difficulties in discussing the
proposal of the NAM's advisory group to cut the debt of least
developed nations by 70 percent.

He said the World Bank, for example, should consult its
shareholders on how to response the debt reduction proposal.

Larger role

On Saturday Afiff called on international financial
institutions to play a larger role in solving the debt crisis of
least developed countries.

Speaking at the opening of the meeting, Afiff said that the
involvement of the financial agencies is an important factor in
the efforts to find a more comprehensive way of solving the debt
problem.

"The reduction of multilateral debt is indeed urgent," said
Afiff.

According to a report by the NAM's ad hoc advisory group on
debt, there were at least 58 heavily debt-ridden countries, of
which 32 were classified as least developed.

The total long-term debt of these countries reached US$247.6
billion in 1992, 26 percent of which was owed to multilateral
financial institutions, 49 percent to governments and their
agencies and 24 percent to the private creditors.

Speakers at the meeting included President Soeharto's team of
experts comprising of Widjojo Nitisastro, Mohammad Sadli, Ali
Wardhana, Radius Prawiro, Suhadi Mangkusuwondo and Emil Salim.

Widjojo, who gained much praise for his active role in the
restructuring and rescheduling of Indonesia's foreign debt in
1970s, told the meeting that the rescheduling of debt is no
longer efficient or sufficient for the nations with heaviest debt
burden as the strategy would hamper the revival of their
economy.(hen)