The Australian government got it right in refusing to join the call for Indonesian debt relief but, instead, offering soft loans instead bq. Speaking to the Financial Times during a one-day visit to Berlin, Mr Wirajuda [the Indonesian Foreign Minister] said: “We prefer to have a combination of mechanisms, including grants, concessionary loans but also trade facilitations and debt swaps.” He said his government would hold talks with the Paris Club about a debt moratorium, but stressed that “from the very beginning we didn’t ask (for a moratorium), it was offered to us”. He added: “We’re sensitive (about a moratorium) as we have a good record of paying our debts and are cautious that the offer (could) affect our good standing in the markets, especially as we now try to attract more foreign investment.” (“Financial Times”:http://news.ft.com/cms/s/eb1bc15c-658b-11d9-8ff0-00000e2511c8.html) Wirajuda’s tune has changed, it seems from “this CNN report”:http://money.cnn.com/2005/01/11/news/international/indonesia_debt.reut/. He may have been pulled back into line by the Indonesian Finance Minister, Jusuf Anwar, who made a distinction between grants, rescheduling and debt relief. Anwar said that Indonesia was seeking only a rescheduling of debt repayments—worth about $US3.2 billion over the next two years—not a restructuring or refinancing of it’s debt. bq. “Paris Club is for rescheduling. If there is any country on its own initiative (that wants) to give us a haircut … Thank God. But we do not ask for that,” he told reporters on Monday.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher