Tsunami summit excludes debt moratorium talks

Fabiola Desy Unidjaja The Jakarta Post/Jakarta

The government has decided not to include the discussion on a debt moratorium for Indonesia in the agenda of the upcoming international emergency relief summit, the Minister of Foreign Affairs Hassan Wirayuda said on Tuesday.

However, while saying that the government was not in a position to ask for such a facility, Hassan was quick to add that it would not nevertheless reject any offers that might come from the donors.

"The debt moratorium will not be discussed in the coming summit, but if some countries would like to bring it up, we would welcome it," Hassan told a press conference following a limited Cabinet meeting to discuss the preparations for the summit.

The government expects to secure pledges from international donors at the forthcoming summit on Thursday for the rehabilitation of Aceh and North Sumatra, which were hit by an earthquake and massive tsunami which has so far killed more than 94,000 people.

The government has said that it was likely to spend at least Rp 10 trillion (US$1.07 billion) for reconstruction in the provinces over the next five years.

Minister of Finance Yusuf Anwar said last week that, while the government would ask the World Bank and Asian Development Bank (ADB) to start reimbursing their undisbursed loan commitments, it would also seek debt relief from creditors grouped under the Paris Club.

At the moment, undisbursed loan commitments from the World Bank and ADB stand at about $3 billion.

Several donor countries -- Germany, France, the U.S. and United Kingdom -- have indicated they were willing to offer debt relief for disasters-stricken countries, including Indonesia.

Debt relief would be helpful for the cash-strapped government, with some Rp 46 trillion (USS5.11billion) set to mature this year which effectively limits its ability to finance rebuilding.

Elsewhere, Vice President Jusuf Kalla said that the government would welcome any debt rescheduling offers, and had asked the National Development Planning Agency (Bappenas) to look into which debts could be rescheduled.

The Vice President further said the government should take the initiative to pursuit the offer from donor countries to support relief efforts in Aceh.

Some 26 countries as well as international organizations have agreed to attend Thursday's emergency meeting, which will discuss various rehabilitation programs for the affected countries as well as an early warning system in the region to prevent a repeat of such a calamity.

Meanwhile, Dow Jones reported that the government and several donor countries had agreed to set up a joint office in Jakarta for the reconstruction of the two provinces.

"The joint office will coordinate all grants and loans designated for Aceh reconstruction," Anggito Abimanyu, a senior official at the finance ministry, was quoted as saying.

He said that the United Nations Development Program (UNDP) would coordinate relief work, which is expected to take six months.

The World Bank, Japan, and the Asian Development Bank will coordinate the rehabilitation program, which is expected to take two years, and the reconstruction, which will likely take up to five years, Anggito said.