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Indonesia: Hard sell as caution sets in

On September 11 in Indonesia, the eyes of the financial community were focused on the country's parliament. Several senior economic ministers, backed up by visiting officials from the IMF, were locked in a battle with politicians over the sale of a majority shareholding in the government-controlled Bank Central Asia.

Agreement from the politicians was the last obstacle holding up a $400 million IMF loan to Indonesia. That night, the main board of the Fund was poised to put the final touches to a new agreement to resume the bailout funding called off months earlier. The parliamentarians, after extensive lobbying, finally agreed to the sale of a majority stake in the bank. But over the 24-hour period the world changed as terrorists struck the World Trade Centre and the Pentagon. What looked then like a positive indicator of Indonesia's potential to commence a new economic takeoff with a genuine financial deal now looks like a seriously hard sell.

Bank Central Asia is Indonesia's second-largest bank and was built up over decades by Liem Sioe Liong, owner of the Salim group, and for many years southeast Asia's richest man. The ethnic Chinese businessman developed close ties with former Indonesian ruler Suharto in the 1950s and expanded his conglomerate over the years to include major interests in cement, noodles and flour, cooking oil, chemicals, plantations and television as well as banking.

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