http://www.abc.net.au/news/newsitems/200503/s1321646.htm
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Last Update: Friday, March 11, 2005. 5:27pm (AEDT)
Debt freeze may increase burden: Indonesia
A debt-freeze offer from the world's rich creditor nations would not help
Indonesia much but the country will still review the offer, a senior government
official says.
The Paris Club of creditors has offered to freeze the debt payments of
countries hit by the December 26 Asian tsunami until the end of this year.
Indonesia, the country worst hit by the tsunami, owes about $US48 billion to
Paris Club lenders.
"I think we are going to look at it again, but from a cash flow point of view
it would be very hard on us. It would only increase our burden," Mulia
Nasution, a director-general at the Finance Ministry, said.
"As has been said by the coordinating Minister for Economic Affairs, it would
not do much help for us."
The creditors say the deferred debt would be repaid over five years with a
one-year grace period.
Moratorium interest accrued in 2005 would be capitalised and paid as a deferred
amount.
Just after the tsunami, France said it expected Indonesia, Sri Lanka and the
Seychelles to take up a debt-freeze offer.
Other countries hit by the disaster included Thailand and India.
Indonesia's Planning Minister, Sri Mulyani Indrawati, says reconstructing the
country's tsunami-hit area would cost up to 10 trillion rupiah ($US1.1 billion)
in 2005 and 40-45 trillion rupiah over the next five years.
Australia agreed to join other Paris Club creditors in offering the governments
of tsunami-affected countries a debt moratorium for 2005, but still believes
direct, targeted assistance is the best option.
"Australia is pleased that the debt moratorium will be in addition to the
direct assistance already committed by Paris Club members," Foreign Minister
Alexander Downer and Trade Minister Mark Vaile said in a statement.
Australia sent around 1,000 military personnel to neighbouring Indonesia as
part of the aid effort following the earthquake and tsunami.
It has also pledged $A1 billion over five years for the country's
reconstruction.
Australia also contributed $A60 million to the international tsunami aid
effort.
About 300,000 people were killed or left missing when the tsunami swept across
the Indian Ocean.
Most casualties were in Indonesia.
- AFP
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