Schroeder Seeks Debt Relief for Somalia, Indonesia (Update3)
Dec. 29 (Bloomberg) -- German Chancellor Gerhard Schroeder said the Paris Club of 19 creditor nations should consider letting Indonesia and Somalia delay debt repayments to help them recover from the earthquake and tsunami that killed more than 60,000 people around the Indian Ocean.
``Indonesia and Somalia have debts to the Paris Club and therefore Germany will propose at the next meeting in January to help those states with a moratorium on their debt,'' said Schroeder at a news conference in Berlin today. ``I can't speak about the long-term outlook, but everyone will understand the need to help these countries.''
The death toll in Indonesia from the tsunami and earthquake off the country's coast has risen to 32,440. Vice President Jusuf Kalla told diplomats in Jakarta today the number of dead may reach 40,000. Around 100 people died in Somalia.
As much as 1.35 trillion rupiah ($145 million) is needed in Indonesia in the next 12 months to provide basic help for the victims, such as food, clothing, water and shelters, Kalla said. As much as 900 billion rupiah alone is needed for food, he said.
`Not Tremendous Sums'
Schroeder said he hasn't talked to members of the Paris Club yet about the details of his proposal. ``The sums involved are not tremendous,'' he told the press conference. ``But we need to consider how we can free the countries' resources for reconstruction.''
Asked whether the U.S. will support Schroeder's proposal, President George W. Bush said his administration will ``look at all requests.''
``There are two issues that are involved obviously in these disasters: one, what can we do immediately to help; and then what needs to happen in the long term to help these countries rebuild,'' Bush told a press briefing at his ranch in Crawford, Texas. ``We're still in the stage of immediate help.''
According to the Paris Club's Web site, Somalia has two rescheduling agreements with the creditor nations -- one drawn up in 1987 covering $132 million and a earlier accord drawn up in 1985 covering $39 million.
Indonesia has three outstanding debt agreements with the Paris Club after fully repaying four. Those three agreements, drawn up in 1998, 2000 and 2002, covered a total of $15 billion, according to the Web site. Indonesia's total debt to the Paris Club was $41.4 billion as of Jan. 31, 2002.
Officials at the Paris Club could not immediately be reached for comment.
Group of Eight Initiative
Schroeder said several states in the Indian Ocean coastal belt had been identified as heavily indebted poor countries in a 1999 Group of Eight initiative on debt relief. Somalia was among the 38 states selected globally.
Under the HIPC initiative, some $70 billion in poor-country debt has been canceled or its cancellation promised. Germany has dropped claims on sovereign debt totaling $12.5 billion, according to the Finance Ministry.
In 2004, the Paris Club concluded 14 agreements on debt rescheduling, covering countries including Congo, Ghana, Senegal, Kenya and Georgia. Since 1983, the total amount of debt covered by Paris Club agreements has been $468 billion, according to the organization's Web site.