Settlement of external debts through the UN recommended

JAKARTA (JP): Settlement of developing countries' external debts should be integrated with the programs of international institutions under the United Nations (UN), high- ranking officials said here yesterday.

Emil Salim, chairman of the economic team of the Non-Aligned Movement (NAM), told newsmen yesterday that the United Nations Development Program (UNDP) will help solve the external debts of developing countries.

"The administrator of the UNDP, Gussputh, has agreed to coordinate related institutions under the UN to revise the agenda, where debt problems are discussed," Emil Salim told journalists after reporting to President Soeharto about his trips to a number of countries to convey the results of the NAM's ministerial meeting on external debts, which was conducted here last month.

Emil was accompanied by Minister/State Secretary Moerdiono, Coordinating Minister for Economy and Finance Saleh Afiff, and the government's economic adviser Widjojo Nitisastro in yesterday's meeting with Soeharto, the current chairman of NAM.

Last month, ministers of 31 least-developed NAM countries met here to discuss the most appropriate approach for solving the debt crises. They ended their three-day meeting with a call for a 70-percent exemption of the external debts of least-developed nations.

Emil Salim noted that the UNDP welcomed the results of the Jakarta meeting and promised to use them as a reference in revising the agency's agenda.

He said that the appeal of the Jakarta meeting is that it was rational in that a number of countries truly cannot pay their debts and even continue to wrangle in debt traps.

"Aid given to least-developed countries to pay their debts cannot solve their debt problems comprehensively ... as their buying power will be declining," he said. "Well, developed countries can channel their aid but least-developed countries will continue to sink."

Moerdiono noted that there are at least 58 heavily indebted countries, of which 32 are least-developed countries. The actual arrears of the 32 countries were much larger than the 20 percent threshold: 91 percent had arrears exceeding 50 percent, half had arrears exceeding 86.7 percent and 39 percent had arrears in excess of 90 percent.

The total of long-term debts of those countries in 1992 amounted to US$247.6 billion, 26 percent of which was owed to multilateral financial institutions, 49 percent to governments and their agencies and 24 percent to private creditors. (rid)