It's that time again when Indonesia will try to be its most
amiable and ask for leniency from its creditors. And with president
Megawati Sukarnoputri leading the charm offensive, it seems the
country might be more successful in gaining concessions than under
her disagreeable predecessor, Abdurrahman Wahid.
In the first week of April, Indonesia will be putting its case to
the Paris Club in the hope that it can reschedule $3 billion in
principal and interest payments from March 31 2002 until December
2003. To many, including rating agency Standard&Poor's, it will
in effect be a selective default and could threaten its CCC rating
further. "But it needs it," says a banker in Hong Kong, "because
the multilaterals are not going to pony up any more money."
Another banker strongly disagrees: "It's a stupid and desperate
request. Looking to reschedule the principal is fine but they...
