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Indonesia optimistic about Paris Club rescheduling

SINGAPORE: Indonesia's top economic minister Kwik Kian Gie expressed optimism on Sunday that Jakarta would obtain a rescheduling of its massive $2.1 billion debt at a meeting this week of its Paris Club of official creditors.

Kwik, in Singapore for routine medical checks, told Reiters in a telephone interview the necessary lobbying had been done and the April 12-13 meeting, was "a matter of confirmation about previous things which have been discused before".

"The fact that the Paris Club is going to have a meeting exactly on time as was planned... is a very clear indication about their optimism," he said, adding "I am quite optimistic".

Kwik said Indonesia, fresh from meeting an International Monetary Fund (IMF) deadline for a slate of reforms necessary to free a critical injection of funds, would not be able to pay up should its Paris Club creditors not reschedule the debt.

"It is a matter of we just can't pay...there is just no money to be used to pay that, the total stock of debt is just too much, it has been accumulated for 32 years," he said.

The Indonesian government had announced on Friday it had met nearly every deadline set by the IMF, a vital step in securing another $400 million from the fund.

"All items listed in the letter of intent (with the IMF) with the Jakarta Initiative were met," Investment Minister and head of the body, Laksamana Sukardi, told reporters on Friday.

One demand was action by the so-called Jakarta Initiative, the body charged with helping restructure Indonesia's more than $60 billion private sector debt.

The measures include a promise to restructure $10 billion in debt this year.

The government also announced other measures to restructure two major state banks, also on the IMF list of demands.

The IMF wants Indonesia to meet a second set of reforms by April 21 if it is to release the $400 million, part of a three-year $5 billion package to help rescue Indonesia from its worst recession in two generations.

Kwik said he was optimistic the April 21 deadline would be met and not postponed. "That (deadline) is okay, it is timely."

Rumours have emerged in Indonesia that President Wahid would reshuffle his cabinet and drop some ministers whom many analysts blame for the latest strains with the IMF.

"I haven't heard anything and I have not seen any sign from the President in all the contact that I have had with him," Kwik commented on the issue of a cabinet reshuffle.

"Only the President has the prerogative rights to do that and so from anyone else except the President, if they say something about that it is pure speculation."-Reuters