The Jakarta Post, Jakarta
Indonesia will build more than 510 new training centers for science teachers from early next year, as part of a 25.6 million euro debt-relief deal with Germany.
And in a second, near-completed agreement, Germany will waive debt of 23 million euros to help Indonesia deal with AIDS/HIV.
Under the first agreement, signed Tuesday, Germany will provide relief of around 25.6 million euros (about US$25.6 million) provided the government allocates 50 percent of the funds to promoting science education.
The new training centers, for primary schools, will be built in 17 provinces throughout the country.
The program will be directly linked to the ongoing Indonesian-German development cooperation project (SEQIP), which focuses on the improvement of science teaching and learning at 33,000 schools.
The project is jointly run by financial institution Kreditanstalt fuer Wiederaufbau (KFW), German non-governmental organization GTZ and Indonesia's Ministry of Education.
The deal is Indonesia's first debt swap deal and helps reduce the staggering foreign debt total, though minimally.
Office of the Coordinating Ministry of the Economy international economic cooperation deputy head Jannes Hutagalung said the second deal was near completion.
""After this, the second will follow suit soon with a preliminary agreement already signed on Oct. 2. Now we are finalizing details of the projects in the first debt swap,"" Jannes told reporters.
He said the second deal, worth 23 million euros, required the government to allocate funds equivalent to that amount to deal with AIDS/HIV-related problems here.
As of March 31, Indonesia owed Germany about $3.1 billion, with 582,2 million euros and $119,1 million supposed to have matured this year, rescheduled through Paris Club III last April.
Tuesday's agreement was signed by the finance ministry's director general for budget affairs Anshari Ritonga and KfW, on behalf of the German government.
Minister of Finance Boediono and the Charge d'Affairs ad interim of Germany, Herman Sausen, also witnessed the signing.
The swaps are a concept the government has been developing, as part of efforts to relieve pressure on the state budget for foreign debt repayments, with Germany among 15 creditor countries which have offered such a mechanism.
The concept is largely tied to the country's foreign debt restructuring program, such as that via the Paris Club.
Currently, the country's public debt stands at $132 billion, or 90 percent of the country's gross domestic product (GDP) for this year. Of that amount, $71 billion is owed to foreign lenders.
GDP measures the total value of goods and services produced in a year.
This has resulted in huge budgetary constraints, as a large portion for debt servicing limits funds available to development programs.
Although the debt swap mechanism will contribute little to help reduce the country's huge sovereign debts, analysts have generally welcomed the idea saying that any measures that could ease the debt burden should be pursued.
Elsewhere, Jannes said that England and France had expressed interest in the scheme, although no timetable for agreements had been set.
""But, for England I think the amount will be around 100 million,"" he said, adding that should account for 10 percent of the country's debts to England.
