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The External Financing of Indonesia's Imports (Special Series on Mixed Credits, in Collaboration with ICEPS)

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  • Glenn P. Jenkins
  • Henry B. F. Lim

Abstract

Foreign borrowing as a source of additional savings can be valuable to a nation whose supply of long-term investment funds is scarce, relative to the amount of its productive investment opportunities. Indonesia is an example of such a country. It has abundant investment opportunities, but because of a limited capital market has financed many of its development projects from international sources. It has maintained a policy of restricting foreign commercial borrowing while maximizing the share of funds from multilateral and bilateral sources at preferential terms. At the end of 1986, Indonesia's total outstanding external debt was estimated at $43.5 billion, 43 per cent of which was denominated in US dollars, and 22 per cent in Japanese yen. The current rates of public foreign debt services to exports is in the 30 per cent range and the rates of total foreign debt service to exports is in the 40 per cent range. Since 1984, the co-ordination of debt management and trade ... L'emprunt à l'étranger constitue une ressource financière additionnelle pour une nation dont les réserves de fonds disponibles pour l'investissement à long terme sont insuffisantes au regard du montant de ses besoins d'investissements productifs. L'Indonésie est le type même de ces pays à besoins élevés d'investissements, qui ont financé nombre de leurs projets de développement à partir de ressources internationales en raison de l'étroitesse de leur marché des capitaux. Elle s'est astreinte à limiter l'emprunt de type commercial tout en utilisant au maximum sa part de fonds auprès des sources multilatérales et bilatérales dotés de clauses préférentielles. A la fin de 1986, on estimait à 43.5 milliards de dollars la dette extérieure de l'Indonésie, dont 43 pour cent en dollars et 22 pour cent en yens. Le service de la dette publique représente 30 pour cent des exportations et celui de la dette totale s'élève à 40 pour cent. Depuis 1984, la politique de gestion de la dette et ...

Suggested Citation

  • Glenn P. Jenkins & Henry B. F. Lim, 1991. "The External Financing of Indonesia's Imports (Special Series on Mixed Credits, in Collaboration with ICEPS)," OECD Development Centre Working Papers 37, OECD Publishing.
  • Handle: RePEc:oec:devaaa:37-en
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    File URL: http://dx.doi.org/10.1787/510306807525
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    References listed on IDEAS

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    1. Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-987, December.
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    3. Jeffrey D. Sachs, 1989. "Developing Country Debt and Economic Performance. The International Financial System," NBER Chapters,in: Developing Country Debt and Economic Performance, Volume 1: The International Financial System, pages -12 National Bureau of Economic Research, Inc.
    4. Alain Ize & Guillermo Ortiz, 1987. "Fiscal Rigidities, Public Debt, and Capital Flight," IMF Staff Papers, Palgrave Macmillan, vol. 34(2), pages 311-332, June.
    5. Jeffrey D. Sachs, 1989. "Introduction to "Developing Country Debt and the World Economy"," NBER Chapters,in: Developing Country Debt and the World Economy, pages 1-34 National Bureau of Economic Research, Inc.
    6. Jeffrey D. Sachs, 1989. "Developing Country Debt and the World Economy," NBER Books, National Bureau of Economic Research, Inc, number sach89-3.
    7. Philippe Callier, 1989. "Debt Relief and Adjustment Incentives in a Financially Open Economy: Comment on Corden," IMF Staff Papers, Palgrave Macmillan, vol. 36(2), pages 514-522, June.
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