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| Saturday, 15 January 2005 |
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Tsunami states see problems with Paris Club offer LONDON, Friday (Reuters) In the rush to help the tsunami-hit Asian countries, the world's rich nations may have failed to take into account economic and regional realities. On Wednesday, the Paris Club of creditor nations made what looked like a generous gesture by offering an interim freeze on debt repayments by the countries of the Indian Ocean which have seen their people killed and their infrastructure ravaged. Some of the reactions have been less than enthusiastic. Analysts said the hesitation of countries such as Indonesia and Thailand which bore the brunt of the tsunami's destructive force was understandable. They wanted to know whether by accepting they would lay up trouble for themselves in the future in the form of higher borrowing costs, lower credit ratings, higher future debt repayments and blows to their geopolitical prestige. Indonesia on Thursday sent out conflicting signals about the Paris Club offer. German Economy Minister Wolfgang Clement, after a meeting with Indonesian Foreign Minister Hassan Wirajuda, said Jakarta was reticent on accepting a debt moratorium and was definitely not in favour of a debt waiver. But Indonesia's chief economics minister, Aburizal Bakrie speaking to reporters in Jakarta welcomed the Paris Club freeze offer which he said he hoped would be extended to a year. Analysts said Indonesia, which plans to tap global capital markets this year to sell sovereign bonds, would not like its borrowing costs to rise due to any debt relief measures doled out by Western nations. Thailand has also rejected an offer of debt moratorium and India, a country which is campaigning for a permanent seat on the U.N. Security Council and sees itself as a regional power, has declined foreign help. |
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