RI, U.S. sign $485.5m debt rescheduling

The Jakarta Post, Jakarta

Indonesia and the United States signed on Monday an agreement that reschedules US$485.5 million in principal and interest payments on Indonesia's official debt to the U.S., which falls due between April 1, 2002 and Dec. 31, 2003.

The agreement was signed by Minister of Finance Boediono and U.S. Ambassador to Indonesia Ralph L. Boyce, the U.S. Embassy in Jakarta said in a statement on Wednesday.

The agreement gives Indonesia the most favorable terms the U.S. government is able to offer and are consistent with the guidelines agreed upon by the Indonesian government and the Paris Club of creditor nations in April of this year, the statement said.

"This agreement is another sign of the strong U.S. support for the government's efforts to push forward with its economic reform program.

"The government's success in stabilizing the economy has brought concrete benefits to millions of Indonesians. We urge the government to continue its efforts to promote sustainable economic development in Indonesia," Boyce said after signing the agreement.

Thirty-seven percent of the loans to be rescheduled are classified as official development assistance (ODA). These loans, which consist primarily of food aid and other forms of assistance from the United States Agency for International Development (USAID), include an interest rate that is substantially below market levels.

They are being rescheduled at concessional rates over a 20- year period with a 10-year grace period.

Non-ODA loans, which are primarily commercial credits, are being rescheduled over 18 years with a five-year grace period.

"Indonesia's agreement with the Paris Club provides a framework for debt rescheduling of this type," the embassy said.