18th October 2022 – Four countries erased Indonesia’s foreign debt up to 334,94 million US dollars or up to IDR 5 trillion. These four countries are Germany, Italy, the United States of America, and Australia.
According to the Special Staff to the Minister of Finance for Strategic Communication through the Twitter account @prastow, Yustinus Prastowo, the erasure of the foreign debt is a result of restructuring.
He explained that the four creditor countries are committed to erasing Indonesia’s debt through a conversion scheme or debt swap. The agreed conversion of debt is programs or projects that must be carried out by the Indonesian government.
Some of the projects are education, health, and global fund for Germany, health for Australia, tropical forest for the United States of America, and housing and settlement for Italy.
Additionally, Prastowo explained that the cumulative total value of the debt swap agreed with bilateral creditors was eq 334,94 million US dollars. As of 30th September 2022, eq 290,51 million US dollars has been realized.
Prastowo added that this is an impressive achievement and proof that there is high mutual trust.
As a form of commitment to the implementation of the agreement, the Government has contributed to carrying out these activities with a value of eq 215,35 million. It was one of the ways to make a serious commitment.
Prastowo did not deny that the elimination of these foreign debts would have good consequences. In line with the spirit of the United Nations, which is instead of paying debts, it is better to use the money to invest in climate resilience, sustainable infrastructure, and a green transition of the economy.
Currently, Indonesia has debt that reached to IDR 7,236,61 trillion, equivalent to 38,30 percent of the gross domestic product until the end of August 2022. This debt is increased by IDR 100,49 trillion from the previously IDR 7,163,12 trillion in July 2022.
Furthermore, Indonesia’s foreign debt by the end of August 2022 was recorded at IDR 397,4 billion US dollars. This figure is lower than the external debt in the previous month of 400,2 billion US dollars.
