Political motive behind Japan's plan to cut LNG imports

Japan's plan to cut liquefied natural gas (LNG) imports from Indonesia might be politically motivated, according to local senior economists.

Tony A Prasetiantono, a senior economist at the University of Gadjah Mada said that Japan's plan to cut LNG imports might be caused by the government's policy to reduce dependence on Japanese loans to finance its state budget.

"It could be also a kind of a move to strengthen the Japanese bargaining power in their bilateral with Indonesia," he said, adding that the cut in imports might be also caused by the government's refusal to open its market for some Japanese products.

Japan is Indonesia's single largest LNG buyer. Tokyo Electric Power Co Inc, one of Indonesian LNG importers from the country announced last week its plan to cut its LNG imports from Indonesia to 150,000 tons from 500,000 tons a year when the current contract ends in 2004.

Revrisond Baswir, also an economist at the university shared Tony's view ragarding the possible political motives behind the LNG import plan. He said the government should therefore take a serious response towards the plan so that the cut in the LNG imports would not affect the economy. (*)