TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Government told to renegotiate German loans for warships
The government should declare void a German government loan to procure 39 used warships, as it constitutes an odious debt, a workshop held at the International NGO Forum on Indonesian Development (Infid) concluded Wednesday
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
T
he government should declare void a German government loan to procure 39 used warships, as it constitutes an odious debt, a workshop held at the International NGO Forum on Indonesian Development (Infid) concluded Wednesday.
Infid executive director Donatus K. Marut told The Jakarta Post, on the sidelines of the workshop, that the loan did not fulfill its contractual requirements.
"There is a German law prohibiting the sales of arms intended for use in a conflict.
"Indonesia, at the time of the sale, was experiencing internal conflicts in Aceh, East Timor and Papua."
Donatus also said the loan contract clearly stated the warships should not be used in any military operations but only to protect coastal and commercial shipping lanes as well as to combat smuggling.
He added the loan was unfair to the Indonesian people.
"The Indonesian government should open a negotiation with the German to scrap this odious debt.
"The government should take the initiative to negotiate the matter."
Several German civic groups, such as the Westphalian Church and Erlassjahr, also opposed the debt and have called for its annulment.
Odious debt can be defined as a debt that does not best serve a borrowing nation and its people but instead is used for military aggression or internal oppression.
According to a 2007 Infid study, Indonesia acquired the warships from the former East Germany fleet in 1993 for US$442.8 million.
The sale, strongly supported by then state minister for research and technology B.J. Habibie, was supported by a $200 million loan from the German government's credit agency Kreditanstalt fuer Wiederaufbau (KfW) and brokered by a German firm, Ferrostaal.
In addition, the deal was insured for a total of US$466 million by Hermes AG, the German export credit agency.
The study's researcher, George Junus Aditjondro, described the 39 warships as useless and suggested the funds be used to improve the welfare of poor fishermen.
Meanwhile, defense expert from the University of Indonesia, Andi Widjajanto, said the procurement of the 39 warships was actually relatively inexpensive.
"But the costs to repair, modify and maintain the warships to be seaworthy were very expensive," he told the Post.
"It is better to dump all aging warships and buy new ones, instead of trying to maintain old machines.
