Why were the Indonesian government and local business community unenthusiastic towards the new Bankruptcy Law?

and its economic and legal institutions. Nevertheless. the formal language used in the reform was to respond to societal needs, in view of the national interest and the continued effort to amend obsolete Dutch colonial laws."" Actually, societal needs had never been the driving force behind the reform of the Bankruptcy Act. Consequently, the reform did not received a wide public sup- port. " For many Indonesians, including the Indonesian business community, the reform was not absolutely necessary. It had never been considered as part of the solution to manage the economic crisis. To the contrary, the Bankruptcy Act reform had been perceived as a means for foreign creditors to conveniently take over Indo- nesian businesses." One argument, although it is not the only argument, to support this contention is that the economic crisis had illustrated the inability of companies to pay their for- eigncurrency loans. Prior to the economic crisis, as the exchange rates were rela- tively stable, there were only a few cases of inability to repay a debt. However, when the crisis hit Indonesia, exchange rates depreciated considerably without the government being able to control them." Therefore, the foreign currency loans of local (rupiah) currency income of companies had to be paid at least at a triple rate. and in some instances even at a higher rate than that in local currency terms. This was the case irrespective of the fact that a company's performance was maintained to provide a stable income. Hence, the economic crisis resulted in the inability, but not necessarily unwillingness, of many Indonesian companies to pay their foreign currency loans. D. The Effects To secure the enactment policies at the implementation stage, the IMF had as- sisted the government in various ways. Furthermore, the IMF had monitored fol- low-up actions on the reform every time a loan was about to be disbursed. The IMF even cautioned Indonesia, time and again, that unworkable Bankruptcy Act and commercial court might undermine Indonesia's effort to recover from the economic crisis