Another shakeup at IBRA<\/p>\n
There must have been something fundamentally amiss in the way
\nthe government oversees the Indonesian Bank Restructuring Agency
\n(IBRA) that has prompted so many shakeups in the agency's top
\nmanagement within less than three years of its operations. The
\nagency that will only be three years old later this month had its
\nchairman replaced for the fifth time last November. Earlier in
\nOctober, its senior deputy chairman was fired for unknown reason
\nwhile he was overseas on a roadshow to promote the sales of
\nassets to foreign investors.<\/p>\n
Then it was confirmed on Monday that two of its five deputy
\nchairmen have tendered their resignations for personal reasons.
\nThe damage incurred by such a move is not limited only to the
\nloss of the quitting officials but also adversely affects the
\nworking morale and teamwork spirit within the agency because
\nthese changes will always be followed by the resignation of key
\nmembers of the working teams already nurtured by the outgoing
\nsenior officials.<\/p>\n
Such shakeups or reorganization would not normally cause great
\nconcern, nor would it merit a comment in this column, but the
\ninstitution affected is IBRA, which is currently perhaps the most
\nimportant economic organization in the country. It is worth
\nrecalling that the agency now manages more than US$64 billion in
\nassets taken over from closed, nationalized and recapitalized
\nbanks and is by itself responsible for the collection of more
\nthan 10 percent of total state revenue for this fiscal year. As
\nthe assets consist mostly of enterprises the agency practically
\nmanages all major banks and most major companies and consequently
\nplays a vital role in determining the pace of economic recovery.<\/p>\n
Even though IBRA said on Tuesday that the two senior officials
\nwould remain in their current job positions until their
\nresignations were accepted by the finance minister, the agency's
\nperformance will certainly be affected, especially because Jerry
\nNg is responsible for bank restructuring and Mahmuddin Jassin for
\nasset management investment, two of the most important programs
\nof the agency.<\/p>\n
Financial remuneration is obviously not behind the resignation
\nbecause the level of pay at IBRA is among the highest in domestic
\ninstitutions which is one of the reasons as to why the agency has
\nbeen able to recruit some of the best brains in the country.<\/p>\n
Jassin kept tight-lipped about his reason for leaving but
\nJerry Ng's reason for quitting is very weak, apparently cited as
\nbeing only to avoid rocking the boat. He said he decided to quit
\nas the bank's restructuring process had technically reached its
\ncompletion and he thought it was now time to pursue his career at
\nanother bank (Standard Chartered Bank in Singapore). As a well-
\nexperienced banker Ng must know that what has so far been
\ncompleted is only recapitalization. The other most important
\nelement of the program -- the operational restructuring of banks
\n-- has only just started.<\/p>\n
The resignation of the two senior officials has once again
\nreminded us of the criticism often targeted at the ministerial
\nFinancial Sector Policy Committee that is headed by chief
\neconomics minister Rizal Ramli. This committee is the highest
\ndecision-maker and policy-making body for IBRA and has to approve
\nevery major deal processed by the agency's management.<\/p>\n
But this committee has often allegedly acted as a conveyor of
\npolitical pressures from vested-interest groups, notably
\nbusinesspeople (and biggest debtors) with strong connections with
\npolitical leaders who have lobbied for specially favorable
\ntreatment.<\/p>\n
Obviously, bright professionals in the IBRA's top management
\nsuch as Ng and Jassin would find such a working environment
\ncompletely inconducive to their professional competence and
\nintegrity, two vital requirements for effective implementation of
\nthe agency's role that is ripe for abuse. Such professionals are
\nusually capable of, and have the courage to stand up against
\ninsensible and irrational directives from their boss and prefer
\nto quit, rather than compromising their integrity.<\/p>\n
The government must now realize that undue political
\nintervention into IBRA's work would eventually not only push out
\nmost of the agency's brightest staff with high principles and
\nintegrity. It would also damage investor confidence in IBRA
\nbecause stability and continuity in senior management is pivotal
\nto the agency's ability to do its job effectively.<\/p>",
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