When Hotman Hutapea, Indonesia's premier bankruptcy advocate, presented his first case to the new commercial court on September 1, he set telephones ringing in bank offices all over town. "Now they believe it," says one senior banker. "They see they'd better do a deal - or else."
Hotman's case was the first of hundreds scheduled to be presented to the court, and the strict time limit - 30 days before a judgment must be reached - leaves no way out for even the biggest deadbeat corporates. The first foreign creditor to front up to the court was the Jakarta branch of American Express, which is suing listed cocoa producer Davomas Abadi for the alleged failure to make good on a $3 million promissory note issued last January.
Indonesia's new political reality means that its companies can no longer ignore the law. "Companies can see that the government is dependent on the money from the IMF," says one bank analyst. "If the commercial court doesn't operate properly, all the foreign bankers have to do is complain to the IMF. There's no way the government is going to protect the companies at the expense of its survival."