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It’s time to smile and ask once again



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 don't need to reschedule the interest.

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