PM Negotiates Moratorium on Debt [Archives:1997/46/Front Page]

November 17 1997

The Prime Minister, Dr. Faraj Bin Ghanim, headed for Paris on Sunday November 16th, to discuss re-scheduling of Yemen’s second round of debt repayment re-scheduling, which is done at the Paris Club forum applying the Napoli terms, agreed upon between Yemen and its creditors. Yemen’s total bilateral debt is now subject to the Paris-Club conditions, given the recent accession of Russia. “We have already concluded re-scheduling agreements with the US, UK, France, Germany, the Netherlands, Japan and Italy. The main upcoming negotiations are with Russia,” Dr. Faraj said. Now that Russia is part of the Paris Club, 80% of the debt owed to it by Yemen is automatically discounted. The 20% balance is subject to one of three scenarios for re-scheduling, on one of which the two sides can agree. “We can discount 67% of it and re-schedule the balance over 20 years. Or we can re-schedule the whole amount over a longer period with a low interest rate. Or repayment can be made of the whole amount at commercial interest rates, but over 40 years,” he said. Yemen also has another issue to discuss, what to do with an overdue of US$ 1.2 billion in arrears. The creditors want this cleared but Yemen is in no position to cough it up.