Gus Dur's intervention in BI justified<\/p>\n
President Abdurrahman \"Gus Dur\" Wahid's conflict with Bank
\nIndonesia Governor Sjahril Sabirin is another blow to the
\nbattered economy. Secretary of the National Economic Council
\n(DEN) Sri Mulyani Indrawati thinks the conflict is a zero-sum
\ngame.<\/p>\n
Question: Is Gus Dur's recent request for Sjahril to step down
\na form of intervention in the central bank or an effort to boost
\nthe bank's performance?<\/p>\n
Mulyani: Let me start by saying that we have to support the
\nimplementation of Law No. 23\/1999 on the autonomy of Bank
\nIndonesia (BI), which provides a legal basis for its
\nindependence.<\/p>\n
But the problem is that prior to the introduction of the legal
\nbasis for its independence, the central bank was not restructured
\nin terms of its personnel or as an institution.<\/p>\n
In terms of its personnel, it has been alleged that some of
\nits officials have been involved in various scandals and
\nfinancial fiasco, which have yet to be disclosed and legally
\nprocessed in order to promote public confidence in the bank's
\ncredibility.<\/p>\n
In terms of it as an institution, the relationship between the
\nbank and the government, as well as the House of Representatives
\n(DPR) and other related institutions, needs to be restructured,
\nso that the bank's performance can be supervised properly.<\/p>\n
Perhaps Gus Dur wants to have Sjahril replaced in a bid to rid
\nthe central bank of such problems. If that is the case,
\nintervention, when it is constructive, is an objective necessity,
\nso that auditing its personnel could be introduced.<\/p>\n
I think Gus Dur's institutional intervention in the bank can
\nbe justified as long as his pure motivation to improve its
\ncredibility can be understood by the general public. But the fact
\nthat DPR members and politicians are suspicious of Gus Dur's
\nmotivation indicates that the President's good intentions have
\nbeen misunderstood.<\/p>\n
Q: Do you think Gus Dur is dissatisfied with Sjahril's
\nperformance?<\/p>\n
M: Bank Indonesia, under the leadership of Sjahril, has performed
\nimpressively in its monetary management. During the past 12
\nmonths, for example, Bank Indonesia curbed the inflation rate
\nfrom about 78 percent to less that 3 percent per annum. The bank
\nhas also improved its discipline in issuing internationally
\nstandardized monetary indicators regularly.<\/p>\n
However, the central bank has yet to improve its nonmonetary
\ntasks -- supervising the performance of commercial banks and
\nscreening personnel being considered for managing commercial
\nbanks through fit and proper tests. It seems that Gus Dur's
\ncomplaints are related to these tasks.<\/p>\n
Q: Do you think Sjahril's defiance is aimed at upholding Bank
\nIndonesia's independence or to assure that he is not involved in
\nthe Bank Bali scandal?<\/p>\n
M: You can add another reason to your question -- whether Sjahril
\nis trying to accommodate pressure from an internal group of
\nofficials who will feel insecure if he is replaced.<\/p>\n
Surely I don't know his real reason. If he is not involved in
\nthe Bank Bali scandal, he would certainly be going all-out to
\ndefend the independence of Bank Indonesia. The question becomes
\nmore complicated if Sjahril has personal problems, so that we
\ncannot distinguish between institutional and personal motivation.<\/p>\n
But public discourses on the dispute have worsened the problem
\nbecause several parties have used the issue to meet their own
\ninterests. This has affected the country's economic development.
\nSo, what is the use of defending the independence of the central
\nbank if, at the same time, they are damaging the bank's essential
\nfunction of maintaining monetary stability?<\/p>\n
My concern is why Gus Dur, as president, has fired too many
\nbullets at a time when the political atmosphere is so murky. In
\nfact, he should have packaged his proposal well if he wanted to
\nproperly achieve his goal. Sjahril's recent visit to the DPR to
\ngarner support also indicates that he has made a political move,
\nthereby inviting more parties to ride on his dispute with Gus Dur
\nfor their own interests.<\/p>\n
Q: Who do you think will win the dispute?<\/p>\n
M: Everyone will be a loser in the conflict because there will be
\nno win-win solution. If, for example, Sjahril survives, the
\ndamage would have already been done and the legal process against
\nhim would affect public respect for the central bank. If Sjahril
\nis eventually replaced, it would not mean Gus Dur won either
\nbecause society would no longer respect the President, who would
\nhave toppled the central bank governor improperly.<\/p>\n
Q: What should Gus Dur and Sjahril do to reduce the damage?<\/p>\n
M: They both must restrain themselves and look for the best
\nsolution that would favor the economy.<\/p>\n
If the DPR and the People's Consultative Assembly (MPR) want
\nthe government to concentrate more on economic recovery, they
\nmust also have a feeling of responsibility by not fanning the
\nflames of the conflict.<\/p>\n
Personal and institutional reconciliation between the central
\nbank governor and the President is also needed to curb the
\ndamaging effect of the conflict. The dispute has thus far
\naffected our efforts at economic recovery because it is damaging
\nboth public confidence and the government's credibility, two
\nfactors that initially caused the economic crisis. (Rikza
\nAbdullah)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/gus-durs-intervention-in-bi-justified-1447893297",
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