The Norwegian government grants Indonesia a debt moratorium in the aftermath of the tsunami

The government decided today to grant Indonesia a debt moratorium for 2005. All payments falling due this year will be rescheduled over five years, up to 2009. For Norway, the amount of money involved is only NOK 3 million.

The bilateral agreement on the debt moratorium follows on from a multilateral framework agreement signed in the Paris Club of creditor countries on 10 May this year, in response to the devastation caused by the tsunami in December 2004.

As a humanitarian gesture, the Norwegian government has decided to waive interest on the deferred debt. Canada and France have decided to do the same and Italy will probably follow suit.

Because Norway’s claim is so modest, our main contribution to helping Indonesia lies in inspiring other countries, with far larger claims, to grant the country an interest-free moratorium. This particular concession is rarely granted by the Paris Club.