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Italy in Indonesia. Post-tsunami support. Debt swap for development in Aceh and North Sumatra.    

Date:

07/22/2011



				
						
								Italy in Indonesia. Post-tsunami support. Debt swap for development in Aceh and North Sumatra.
						
				
		
 
 
Italy and Indonesia are putting in place the first step of their post-tsunami co-operation.  
On the 9th of March 2005, during their bilateral talks in Jakarta, H.E. the Minister of Foreign Affairs of Indonesia H.E. Dr. N. Hassan Wirajuda and the Minister of State for Foreign Affairs of Italy, the Hon. Margherita Boniver will proceed to the signature of the Agreement on Debt Swap for Development between the two Countries.  

The Agreement foresees a debt swap for an amount of approximately 25 million Euro (24 million US dollars, plus 5,7 million Euro), which is what Indonesia owes to Italy for soft loans granted in the past, already bilaterally rescheduled within the Paris Club.   The negotiations for this Agreement started in 2004, but after the tsunami that hit North Sumatra and Aceh on the 26th of December 2004, the two Parties decided to accelerate the negotiations and to concentrate the projects foreseen with the available amount to the areas hit by the tsunami (Art. III, paragraph 1).  

The projects will be focused on rural development, poverty alleviation and food production, in a context of verifiable social participation and with an environmentally sustainable resource use (Art. III, paragraph 3).  

Italy’s commitment to support the Indonesian economy through financial means in the aftermath of the tsunami was announced during the last CGI in Jakarta last January, following the talks H.E. the Foreign Minister of Indonesia Dr Wirajuda had in Rome with his counterpart, the Hon. Gianfranco Fini.  Apart from the financial aspect of the cooperation, which foresees the possibility of another debt swap agreement (for commercial loans) in the near future, Italy is firmly engaged - through a comprehensive program (see Annex) – in supporting Indonesia’s post-tsunami recovery.

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