Soeharto to open NAM's ministerial meeting on debt

JAKARTA (JP): President Soeharto, the current chairman of the Non-Aligned Movement (NAM), will officially open the group's first ministerial meeting on external debt here today to formulate ways of reducing the debt burdens facing its members.

Coordinating Minister for Economy and Finance Saleh Afiff announced yesterday that the three-day meeting will seek solutions to the crippling debt problems encountered by developing nations.

"The meeting is also expected to hear a report from the movement's ad hoc advisory group on how to solve this problem," he said following a meeting between members of the advisory group and the President.

The advisory group yesterday submitted a report to the President on how to solve their heavy debt burdens.

Saleh said 31 of the movement's least developed members, including Bhutan, Cambodia, Chad, Comoros, Madagascar, Mali, Mauritania, Mozambique, Myanmar and Uganda, will participate in the meeting which will be opened at the State Palace before proceeding at the Jakarta Hilton Convention Center.

Saleh said the delegates will be able to attend a plenary session of the House of Representatives (DPR) on Tuesday, during which time the President will deliver a state address.

"They will also attend the celebration of Indonesia's 49th Independence Day on Wednesday," he told the press briefing, which was also attended by the chairman of the ad hoc advisory group, Gamani Corea of Sri Lanka, Nana Sutresna, a special assistant of NAM's chairman, Widjojo Nitisastro, the chairman of Soeharto's team of experts, and Minister/State Secretary Moerdiono.

The advisory group, consisting of experts from developing nations, was set up during the NAM summit here in September 1992 to assess debt problems facing the movement's least developed members and formulate possible approaches to overcome them.

Revival

Gamani said that the ability of the debtor nations to revive their economies through domestic savings, investments and new foreign capital inflow is limited due to their heavy debt burdens.

He said that most of the 58 indebted countries in Latin America, Africa and Asia are no longer able to repay their debts because of internal problems such as food shortages.

Some 32 of the heavily-indebted countries in 1992 were least developed countries whose total debts reached US$248 billion.

Gamani said that rescheduling their loans is no longer enough because that would only aggravate the problem resulting from the mounting costs of the interest-on-interest effect.

He said that scaling down their debts, for example, to 70 percent could be an appropriate approach to give those heavily indebted nations some breathing room.

According to the advisory group's report, many of those countries already face negative growth, thus their difficulties in servicing foreign debt has resulted in a continued increase in arrears. It said that around 91 percent of the 58 heavily indebted nations have arrears of above 50 percent of their total debt. (hen)