The Indonesian government will reduce the obtainment of foreign loans in 2006 to only 30.5 trillion rupiah (3.05 billion US dollars) or 1 percent of the Gross Domestic Product compared to this year's 35.54 trillion rupiah (3.554 billion US dollars) or 1.5 percent of the GDP.

"For 2006, we estimated that Indonesia's need for foreign loans amounts to 3.05 billion US dollars with a view to reducing the country's foreign debt burden," Antara news agency Tuesday quoted Finance Minister Jusuf Anwar as saying.

Under the 2005 state budget, the government paid about 4.038 billion US dollars in foreign debts. And at the same time the government drew 3.554 billion US dollars in foreign loans.

Jusuf Anwar said during an annual meeting of the Consultative Group on Indonesia (CGI) in Jakarta on Monday that to reduce its total foreign debt burden, the government will prioritize foreign funding sources in the form of grants (of the CGI), soft loans (from Japan and multilateral organizations), debt swaps and moratoria (of some Paris Club members).

"The government has accepted a foreign debt moratorium for one year (2005) offered by the Paris Club and some other countries on bilateral basis. We do not have to pay the interest during the moratorium on debts under the moratorium, reducing our debts," he said.

He added that the government had also tried to reduce its debt burden by asking for an exemption from the commitment fees on project loans which have yet to be disbursed.

Source: Xinhua