Government seeks new amendment on BI law<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
The government has resumed talks with legislators on the long
\nsuspended amendment of the central bank law, expanding the scope
\nof discussion from Bank Indonesia's accountability to the entire
\nlaw if need be, a legislator said.<\/p>\n
Legislator Paskah Suzetta of the Golkar party said the
\ngovernment was seeking a comprehensive approach to resume talks
\non the amendment of the central bank law.<\/p>\n
But he ruled out major revisions to the law, saying discussion
\nwould rest on adjusting the law to meet changes in the monetary
\npolicy environment.<\/p>\n
\"We won't change the substance of the law....the titles of the
\narticles will remain the same but we might fine tune their
\ncontents,\" Paskah told reporters on Friday, after the
\ninauguration of three new Bank Indonesia deputy governors by the
\nSupreme Court.<\/p>\n
He said talks on the central bank law began on Thursday in a
\nclosed-door meeting between the government and the House of
\nRepresentatives' Commission IX, which oversees financial affairs.<\/p>\n
Commission IX member Paskah said there was no timetable to
\nfinalize the talks, but added that the sooner the better.<\/p>\n
Talks with legislators to amend Bank Indonesia Law No. 23\/1999
\ncame to a halt in the middle of last year, disrupted by the
\npolitical turmoil that led to the former president Abdurrahman
\nWahid's being ousted.<\/p>\n
Abdurrahman initiated the amendment two years ago, complaining
\nthe present law was too weak to make the central bank accountable
\nfor its policies.<\/p>\n
That followed a report by the Supreme Audit Agency stating
\nBank Indonesia might have played a key role in the abuse of Rp
\n138.4 trillion (US$13.3 billion) in liquidity support loans for
\nlocal banks.<\/p>\n
But the current law bars the dismissal of a member of Bank
\nIndonesia's board of governors on the absence of proof of any
\ncriminal wrongdoing, voluntary resignation or incapacity.<\/p>\n
Governor of Bank Indonesia Sjahril Sabirin, who at that time
\nwas in jail for his suspected involvement in the Bank Bali
\nscandal, held on to his position despite pressure from
\nAbdurrahman to resign.<\/p>\n
The government then proposed a central bank bill, which
\ncritics believed was designed to oust Sjahril and his deputies.<\/p>\n
They said the bill put at risk Bank Indonesia's hard won
\nindependence, and enabled the return of political interference.<\/p>\n
The International Monetary Fund (IMF) criticized the planned
\namendment, although it was whilst under the fund's supervision
\nthat Bank Indonesia allegedly misused the liquidity support
\nloans.<\/p>\n
Warning the government not to tinker with Bank Indonesia, the
\nIMF raised the stake on the issue, by pending the disbursement of
\na $400 million loan package.<\/p>\n
The central bank law, the missed sale of Bank Central Asia,
\nand a rift over whether or not decentralized provinces may issue
\nbonds were among the reasons why the IMF suspended the loans.<\/p>\n
To bridge the gap with the government, the IMF sent a team of
\nexperts to provide advice on the central bank law amendment. The
\ngovernment has said it had included most of the team's
\nrecommendation in the bill.<\/p>\n
But Paskah added that any agreed changes in the bill would
\nremain subject to discussion.<\/p>\n
\"It's a new government.....their orientation has changed, now
\nit's not just about replacing the board of governors,\" he added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-seeks-new-amendment-on-bi-law-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}