Paris Club backs Indonesia debt deal



28th September, 2001.

The Paris Club of official creditors has backed the second phase of a two-year debt-rescheduling deal with Indonesia, Japan's Ministry of Finance (MOF) said on Thursday. "The Paris Club contacted us and other creditor nations to confirm that there was no disagreement on its decision to approve the deal," a senior Finance Ministry official said. "The procedure (for the debt-relief accord) is finished."

The move paves the way for formal clearance of the second stage of a $5.8 billion debt accord struck in April 2000.

The $5.8 billion package covered public debt that Indonesia needed to pay back between April 2000 and March 2002, the official said.

The second year of that agreement involved about $2.8 billion, a source closed to the Paris Club said earlier this week.

Japan, which holds about $2.7 billion of the $5.8 billion package, plays an important role in negotiations between the Paris Club and Indonesia.

Indonesian President Megawati Sukarnoputri met Japanese Finance Minister Masajuro Shiokawa on Thursday, but the two did not discuss the accord, the MOF official said.

The Paris Club had planned to review the deal earlier this month, but that review was put on hold after the September 11 air attacks in the United States.

The International Monetary Fund said the day before the attacks that it had struck a deal with Jakarta on its economic programme.

That was a decision the Paris Club creditors had been waiting for before approving the April 2001-April 2002 stage of the accord.-Reuters

Copyright 2001 Reuters