http://www.thejakartapost.com/news/2009/02/17/adb-may-guarantee-ri%E2%80%99s-debts.html
Heavyweights: Asian Development Bank (ADB) president Haruhiko Kuroda greets minister of finance Sri Mulyani Indrawati at a Monday press conference in Jakarta. The ADB said it would provide up to US$1.75 billion in lending commitments. JP/Ricky YudhistiraHeavyweights: Asian Development Bank (ADB) president Haruhiko Kuroda greets minister of finance Sri Mulyani Indrawati at a Monday press conference in Jakarta. The ADB said it would provide up to US$1.75 billion in lending commitments. JP/Ricky Yudhistira
In addition to providing loan commitments, the Asian Development Bank (ADB) may guarantee bonds and loans issued by the government.
“We are exploring a guarantee facility in support of bonds, loans and other debt instruments issued by the government of Indonesia. The guarantee will help lower the cost of financing,” Haruhiko Kuroda, ADB president, told a press conference on Monday, following a meeting with Finance Minister Sri Mulyani Indrawati.
The discussion on these issues however was still at a preliminary stage, he said, adding that Indonesia’s economy, while well-managed, would need all the help it can get so as to minimize the negative impact of the global economic slowdown.
On the lending commitments, the ADB said it would provide $1.75 billion to assist Indonesia in strengthening its fiscal management amid the threats from the global crisis.
Of the total, ADB executive director Ceppie K. Sumadilaga said that the $750 million in project loans had already been initially prepared, with the remaining $1 billion comprising $500 million in program loans and $500 million in standby loans.
Asked when the loans will be disbursed, he said this “will depend on Indonesia’s needs”. The loan tenure is between 17 years and 20 years, while the interest rate is LIBOR plus 0.5 percent.
Mulyani said the loans would help emerging countries like Indonesia to effect counter-cyclical measures. “Our source of financing has become secured with ADB loans.”
The government has set the 2009 budget deficit at Rp 129.5 trillion, or 2.5 percent of the GDP.
Mulyani said earlier several multilateral agencies and countries had provided $6 billion in standby loans for Indonesia. The World Bank is providing $2 billion, the ADB $1 billion, the Islamic Development Bank between $500 million and $1 billion, Japan $1 billion and finally Australia another $1 billion.
To be able to disburse more loans, ADB plans to ask member countries to help to increase the bank’s general capital during its annual meeting in Bali in May.
“ADB’s support to member countries has generally been increasing. Therefore we ask the members to support our capital, increasing (their stake) by 200 percent or so,” said Kuroda.
With the general capital increase, he said, ADB “can provide a larger amount of assistance and be more responsive to financing short-term and long-term loans”.
Indonesia has 1.93 billion SDR, or special drawing rights which are currently equivalent to around $2.88 billion, at ADB. That figure is expected to be raised by 200 percent, said Ceppie.
He said in the upcoming Bali meeting, the ADB member countries would discuss the general capital increase, including the payment method.
“Countries like India and China even ask for a larger increase as emerging countries need more resources.”
The Bali meeting is expected to announce the figure for the Chiang Mai Initiative Multilateralization, a joint cooperation of ASEAN+3 (Japan, South Korea and China) to help countrys act against the deepening global economic crisis, via a pool of funds to be created and accessible to members, to strengthen their foreign exchange reserves.
There will also be international seminars and an ASEAN Investment Day expected to attract foreign investors to put funds into ASEAN countries, particularly Indonesia.
Later in the day, Kuroda will visit the State Palace, with President Susilo Bambang Yudhoyono welcoming ADB’s offers to provide financial assistance to developing economies in the region, including very positive support for Indonesia.
Mulyani, who accompanied Kuroda, said the president was also pleased to learn that ADB had chosen Indonesia to become the host for its 42nd annual meeting in May.
“The President) hoped that the (annual) forum would discuss not only ADB’s own agenda, but also (other issues) so that ADB can be an integral part of solutions to the (global economic) crisis in the Asian region,” she said. (*)
Heavyweights: Asian Development Bank (ADB) president Haruhiko Kuroda greets minister of finance Sri Mulyani Indrawati at a Monday press conference in Jakarta. The ADB said it would provide up to US$1.75 billion in lending commitments. JP/Ricky YudhistiraHeavyweights: Asian Development Bank (ADB) president Haruhiko Kuroda greets minister of finance Sri Mulyani Indrawati at a Monday press conference in Jakarta. The ADB said it would provide up to US$1.75 billion in lending commitments. JP/Ricky Yudhistira
In addition to providing loan commitments, the Asian Development Bank (ADB) may guarantee bonds and loans issued by the government.
“We are exploring a guarantee facility in support of bonds, loans and other debt instruments issued by the government of Indonesia. The guarantee will help lower the cost of financing,” Haruhiko Kuroda, ADB president, told a press conference on Monday, following a meeting with Finance Minister Sri Mulyani Indrawati.
The discussion on these issues however was still at a preliminary stage, he said, adding that Indonesia’s economy, while well-managed, would need all the help it can get so as to minimize the negative impact of the global economic slowdown.
On the lending commitments, the ADB said it would provide $1.75 billion to assist Indonesia in strengthening its fiscal management amid the threats from the global crisis.Of the total, ADB executive director Ceppie K. Sumadilaga said that the $750 million in project loans had already been initially prepared, with the remaining $1 billion comprising $500 million in program loans and $500 million in standby loans.
Asked when the loans will be disbursed, he said this “will depend on Indonesia’s needs”. The loan tenure is between 17 years and 20 years, while the interest rate is LIBOR plus 0.5 percent.
Mulyani said the loans would help emerging countries like Indonesia to effect counter-cyclical measures. “Our source of financing has become secured with ADB loans.”
The government has set the 2009 budget deficit at Rp 129.5 trillion, or 2.5 percent of the GDP.
Mulyani said earlier several multilateral agencies and countries had provided $6 billion in standby loans for Indonesia. The World Bank is providing $2 billion, the ADB $1 billion, the Islamic Development Bank between $500 million and $1 billion, Japan $1 billion and finally Australia another $1 billion.
To be able to disburse more loans, ADB plans to ask member countries to help to increase the bank’s general capital during its annual meeting in Bali in May.
“ADB’s support to member countries has generally been increasing. Therefore we ask the members to support our capital, increasing (their stake) by 200 percent or so,” said Kuroda.
With the general capital increase, he said, ADB “can provide a larger amount of assistance and be more responsive to financing short-term and long-term loans”.
Indonesia has 1.93 billion SDR, or special drawing rights which are currently equivalent to around $2.88 billion, at ADB. That figure is expected to be raised by 200 percent, said Ceppie.
He said in the upcoming Bali meeting, the ADB member countries would discuss the general capital increase, including the payment method.
“Countries like India and China even ask for a larger increase as emerging countries need more resources.”
The Bali meeting is expected to announce the figure for the Chiang Mai Initiative Multilateralization, a joint cooperation of ASEAN+3 (Japan, South Korea and China) to help countrys act against the deepening global economic crisis, via a pool of funds to be created and accessible to members, to strengthen their foreign exchange reserves.
There will also be international seminars and an ASEAN Investment Day expected to attract foreign investors to put funds into ASEAN countries, particularly Indonesia.
Later in the day, Kuroda will visit the State Palace, with President Susilo Bambang Yudhoyono welcoming ADB’s offers to provide financial assistance to developing economies in the region, including very positive support for Indonesia.
Mulyani, who accompanied Kuroda, said the president was also pleased to learn that ADB had chosen Indonesia to become the host for its 42nd annual meeting in May.
“The President) hoped that the (annual) forum would discuss not only ADB’s own agenda, but also (other issues) so that ADB can be an integral part of solutions to the (global economic) crisis in the Asian region,” she said. (*)
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