Government creditors in the Paris Club will this week consider a debt moratorium for Sri Lanka and Indonesia, two of the countries worst affected by last month's tsunamis, although experts have questioned the usefulness to Jakarta of such a move.
While Asian and world leaders convening in Jakarta last Thursday backed a freeze on debt payments from tsunami-hit nations, only two of the 11 countries -- Sri Lanka and Indonesia -- have asked to have their financial situation reviewed by the Paris Club at a meeting here beginning on Wednesday, according to Club sources.
Another source close to the Paris Club has said the meeting would debate a debt repayment freeze but not a cancelation.
A cancelation or restructuring, of which Britain is the main proponent, could come later "in a second phase," the source said.
Suspending debt payments from countries affected by the Dec. 26 disaster won the backing on Friday of finance ministers from the Group of Seven (G7) industrialized countries.
The British government, which holds the rotating G7 presidency, said the idea would be debated by the Paris Club this week.
With an external debt of US$132 billion, of which US$70 billion is owed to public creditors or has been guaranteed by public bodies according to the World Bank, Indonesia has said it hopes debt relief will be proffered without conditions.
Brian Hammond, head of the statistics and monitoring division at the Organization for Economic Cooperation and Development, said Indonesia presents "a more difficult" case than Sri Lanka since its financial reputation on capital markets could take a greater hit.
Experts have warned that debt relief could prove to be counterproductive, causing a lowering in a country's credit rating and making it vulnerable to higher interest rates on future loans.
Lower ratings in addition threaten to leave foreign investors wary.
Indonesia has had its rating reduced by Standard and Poor's three times following a debt arrangement with the Paris Club.
"Normally the Paris Club asks for equivalent action by the private sector and that's precisely why Thailand and India and Malaysia wouldn't want to go anywhere near [debt relief]," Hammond said.
A Paris Club agreement is systematically tied to a reform program drafted by the International Monetary Fund, which many beneficiary governments and populations have found to be harsh.
Hammond said Sri Lanka is the only country that could truly benefit from a rescheduling of its debt, given that the private sector accounts for a relatively small part of external obligations.
"But for Indonesia, given the amount of the country affected, the amount of the economy affected ... and the importance of private and short-term debt, it may well be better for them to have reconstruction," he added.
Taiwan is projected to lose a working-age population of about 6.67 million people in two waves of retirement in the coming years, as the nation confronts accelerating demographic decline and a shortage of younger workers to take their place, the Ministry of the Interior said. Taiwan experienced its largest baby boom between 1958 and 1966, when the population grew by 3.78 million, followed by a second surge of 2.89 million between 1976 and 1982, ministry data showed. In 2023, the first of those baby boom generations — those born in the late 1950s and early 1960s — began to enter retirement, triggering
ECONOMIC BOOST: Should the more than 23 million people eligible for the NT$10,000 handouts spend them the same way as in 2023, GDP could rise 0.5 percent, an official said Universal cash handouts of NT$10,000 (US$330) are to be disbursed late next month at the earliest — including to permanent residents and foreign residents married to Taiwanese — pending legislative approval, the Ministry of Finance said yesterday. The Executive Yuan yesterday approved the Special Act for Strengthening Economic, Social and National Security Resilience in Response to International Circumstances (因應國際情勢強化經濟社會及民生國安韌性特別條例). The NT$550 billion special budget includes NT$236 billion for the cash handouts, plus an additional NT$20 billion set aside as reserve funds, expected to be used to support industries. Handouts might begin one month after the bill is promulgated and would be completed within
NO CHANGE: The TRA makes clear that the US does not consider the status of Taiwan to have been determined by WWII-era documents, a former AIT deputy director said The American Institute in Taiwan’s (AIT) comments that World War-II era documents do not determine Taiwan’s political status accurately conveyed the US’ stance, the US Department of State said. An AIT spokesperson on Saturday said that a Chinese official mischaracterized World War II-era documents as stating that Taiwan was ceded to the China. The remarks from the US’ de facto embassy in Taiwan drew criticism from the Ma Ying-jeou Foundation, whose director said the comments put Taiwan in danger. The Chinese-language United Daily News yesterday reported that a US State Department spokesperson confirmed the AIT’s position. They added that the US would continue to
One of two tropical depressions that formed off Taiwan yesterday morning could turn into a moderate typhoon by the weekend, the Central Weather Administration (CWA) said yesterday. Tropical Depression No. 21 formed at 8am about 1,850km off the southeast coast, CWA forecaster Lee Meng-hsuan (李孟軒) said. The weather system is expected to move northwest as it builds momentum, possibly intensifying this weekend into a typhoon, which would be called Mitag, Lee said. The radius of the storm is expected to reach almost 200km, she said. It is forecast to approach the southeast of Taiwan on Monday next week and pass through the Bashi Channel
RSS