Moratorium or relief or what?

My two-cent op for those debating on debt moratorium:

1). Debt moratorium is not the same as debt relief. The former is temporary suspension, and the latter is permanent reduction/deletion or simply rescheduling.

2). G2G-based moratorium for official debts is very possible. But only for those under bilateral agreement. Those signed under the Paris Club are subject to discussion -- and a tough one, most likely. In the meantime, debt relief is still possible but less likely (unless Indonesia poses similar importance to donors the way Mexico was to the U.S. back in the Clinton years).

3). It's almost impossible to get relief (not to mention moratorium) for commercial debts. After all, corporations are no charity. (They will donate some money of course, for image-building).

4). So what now? Here's what I would suggest : 1) Demand debt relief (as so promised by U.K., Italy, and Belgium) -- I could imagine this would be relatively more manageable for bilateral agreements. But it would be extremely tough for multilateral: Paris Club is a cartel and the brain-child of the IMF; remember GOI has said no to the Fund; hence no more Paris Club dinners, 2) Demand debt moratorium (from Germany, U.S., Japan, Canada, and France).

5) If you are concerned with our rating, points in # 4 above will not hurt (read S&P Bulletin today) insofar the debts we are talking about are official debts. When it comes to commercial debts though, things are not pretty (see # 3, and in addition, unlike the case of official debts, this one is subject to lowered rating).

6) Yet, some would understandably cry out: why oh why are we still talking about the damn ratings in the midst of this sad sad sad catastrophe? Well, because those herds called Corporations out there always wake up in the morning and look at the S&P ratings before deciding where to put money today. And the thing is, it's commercial debts that are more volatile. Unfortunately, we are not sure if can play the Mexican way...