Finding Sjahril Sabirin's successor<\/p>\n
Pitan Daslani, Publisher, indocapital.com, Jakarta<\/p>\n
Who would be the right candidate to replace Sjahril Sabirin,
\nthe incumbent governor of Bank Indonesia now approaching
\nretirement age? Should it be one of the three senior bankers that
\nPresident Megawati Soekarnoputri handpicked for a fit and proper
\ntest? Logically and officially, yes. But wait a minute.<\/p>\n
More important is the question of the fit and proper test
\nitself. Legitimacy apart, is the Bank Sub-Commission of the House
\nof Representatives (DPR) really qualified enough, by
\ninternational professional banking standards, to conduct a test
\nwhen it is composed of politicians with no experience in
\ninternational banking -- except for their textbook knowledge and
\nlocal economic background, not to mention presumed temptations on
\nthe part of the Commission in the run-up to the 2004 general
\nelections?<\/p>\n
A number of well-known economists have surprisingly made
\naffirmative comments on the candidates, the very people they had
\npreviously attacked over the scandal of the Bank Indonesia
\nliquidity support (BLBI) funds.<\/p>\n
A big question that disturbs many observers is why the
\nname of outspoken Senior Deputy Governor Anwar Nasution is not
\non the list.<\/p>\n
There are at least three different streams of political
\nbusiness interests which have taken Miranda Goeltom, Burhanuddin
\nAbdullah and Cyrillus Harinowo closer to Sjahril Sabirin's chair.<\/p>\n
First, is the political agenda for the next general elections.
\nA stable and preferably generous central bank headed by an ally
\nwould certainly be a desirable choice for those wishing to wink
\nat the highest monetary authority.<\/p>\n
Second, are the maneuvers of white-collar bandits -- or
\ncorrupt officials --- trying hard to conceal their fortune behind
\nthe walls of BLBI deadlock. Such officials with terrible track records
\nare not unknown to the Supreme Audit Board (BPK).<\/p>\n
Deny Daruri, director of the Center for Banking Crisis, was
\nblunt when he said on Jakarta News FM radio station on Feb. 18
\nthat in fact, when President Megawati revealed the bankers'
\nnames, people immediately remembered a BPK audit report on the
\nmisuse of BLBI, which contained the names of two of the
\ncandidates.<\/p>\n
\"We simply cannot accept them...they need to be tested against
\ngood moral standards and integrity, apart from professionalism.
\nIf people like (House Speaker) Akbar Tanjung support their
\ncandidacy, it's only because he doesn't have integrity,\" Daruri
\nsaid.<\/p>\n
The Center for Banking Crisis believes these three candidates
\nare incapable of conducting a \"policy revolution\" for the central
\nbank. Besides, in Daruri's words, \"they can easily be intervened
\nwith\", by authorities above them.<\/p>\n
Banking analysts doubt that Miranda, for instance, though seen
\nas a good professional and preferred candidate, has the courage
\nto say \"no\" to the President in the way that Sjahril Sabirin did
\nto former president Abdurrahman \"Gus Dur\" Wahid, who personally
\ndisliked him and sent him into detention.<\/p>\n
In the years until his ouster, Gus Dur was at war with
\nSjahril, but the latter never wanted to bow to the then-
\npresident's pressure, even though it cost him time in court and
\nbehind bars. It would be a disaster if his successor had a
\nweaker personality.<\/p>\n
The third stream of interests is the political vehicle on
\nwhich conflicting interest groups ride in Indonesia's relations
\nwith such international institutions as the IMF.<\/p>\n
This is more of a dark tunnel with no light at its end, except
\nfor the outcome of interactions involving the central
\nbank, the international lending institution, Indonesia's Bank
\nRestructuring Agency (IBRA) and state-owned \"recap\" banks.<\/p>\n
This is also the mysterious domain in which the BLBI scandal
\nemerged, submerged and disappeared. IBRA came into existence as a
\nlogical consequence and right vindication of a wrong start. The
\ngovernment's injection of Rp 480 trillion worth of recap bonds
\nand other expenses totaling Rp 650 trillion in state debt to
\nstate banks and corporations -- for which it has to pay Rp 70
\ntrillion every year in interest obligations -- also existed in
\nthis mysterious domain, as did IBRA's newfound hobby of
\nselling off state assets.<\/p>\n
Combine the three streams of interests as described above, and
\nthe only assumption is that BI is sitting at the center of all
\nthese maneuvers. Its governor, therefore, cannot be selected
\nmerely from considerations of professionalism alone. There are
\nmore than enough professionals at BI to run daily activities.<\/p>\n
What the central bank won't have when Sjahril leaves office on
\nMay 17 is a strong leader with a clear vision of the monetary
\nauthority's role as a decisive factor in stabilizing Indonesia's
\neconomy.<\/p>\n
That aside, now, the question of the fit and proper test.
\nGiven the crucial role that BI plays, especially at this juncture
\nof economic crisis and global uncertainty, leaving the selection
\ntask to a handful of politicians at the Bank Sub-Commission,
\nwhich represents only a third of Commission IX membership, is too
\nrisky a proposition -- unless it is a ploy to cover up a
\npredetermined decision.<\/p>\n
Against the backdrop of our current situation, the question of
\nthe fit and proper test for BI Governor cannot be confined to the
\nauthority and legitimacy of the legislature alone.<\/p>\n
Unlike other institutions in the country, BI is part of the
\ninternational monetary market and its existence cannot be
\ninferred merely from its physical presence on Jl. M.H. Thamrin in
\nCentral Jakarta.<\/p>\n
Selecting a chief for BI, therefore, is not as simple a
\nquestion as selecting a professional to head the office in
\nCentral Jakarta. Perhaps it is time that the government
\nconsidered inviting, for instance, the U.S. Federal Reserve or
\nthe Bundesbank of Germany to provide world-class
\nconsultancy services.<\/p>\n
These services could range from the formulation of the
\nparameters, scope, content and modalities of the fit and proper
\ntest in provision of an expanded cooperation, under which BI
\ncould be better facilitated in its domestic monetary
\nstabilization programs, as well as in responding to policy
\nchanges that affect the global money market.<\/p>\n
The legislature's Commission IX in charge of financial
\naffairs, especially the Bank Sub-Commission, should not be fooled
\nby the notion that a new BI Governor should be put in place as
\nquickly as possible only because Sjahril is retiring.<\/p>\n
President Megawati actually has final authority; if she
\nwishes, she could extend Sjahril's term of office by another
\nyear, during which time she could find better candidates to from
\nwhom to select a governor.<\/p>\n
During such an extension period, the House could perhaps
\nreview or even amend Law No. 23\/1999 to cement BI's independence
\n-- but at the same time, open a leeway through which possible
\nmanipulative practices behind BI's walls can be probed.<\/p>\n
This would positively pare down BI officials' pride, if not
\narrogance, of being blunder-free super-humans.<\/p>\n
Like the director of the Center for Banking Crisis who cannot
\nchoose any of the three candidates the President has forwarded,
\nmany banking analysts agree that BI needs a much stronger
\npersonality than that already proposed to sit on top of its
\nleadership in the post-Sjahril era, especially in the
\nrun-up to the 2004 elections.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/finding-sjahril-sabirins-successor-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}