RI sovereign debt a laggard in Asia: S&P

RI sovereign debt a laggard in Asia: S&P

SINGAPORE (Dow Jones): Indonesia's political turmoil, weak
currency, and lagging reform make its sovereign debt the "weakest
credit story" in Asia, Standard & Poor's Managing Director for
Sovereign Ratings David Beers said Monday.

However the completion of a debt restructuring agreement with
Indonesia's commercial creditors could trigger an upgrade in its
long-term foreign credit rating from "selective default" next
month, Beers told a seminar on Asian sovereign debt.

Among the problems affecting Indonesia is its high level of
public debt, which is now more than 110 percent of gross domestic
product, Beers said.

The country also suffers from uncertainties regarding legal
reform, the quality of bank lending and the sale of assets by the
government-run Indonesia Bank Restructuring Agency, he said.

"There has been disappointment in the efforts by the Wahid
government," Beers added.

Indonesia is working with the Paris Club of creditors to
restructure $850 million of syndicated loans that are in default.
The restructuring is expected to be completed next month.