Indonesia declines debt relief

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”: Wira­ju­da’s tune has changed, it seems from “this CNN report”: 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.

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