House names Anwar for 2nd key position at BI<\/p>\n
JAKARTA (JP): The House of Representatives picked on Monday
\noutspoken economist Anwar Nasution to hold the second top
\nposition at the central bank for a five-year term.<\/p>\n
Anwar, the most vocal critic of the central bank since the
\nearly 1980s, was selected for the newly created post of senior
\ndeputy governor of Bank Indonesia from three candidates whose
\nnames were proposed by President B.J. Habibie on June 4.<\/p>\n
Anwar's contenders were the president commissioner of state
\nBank Mandiri, Binhadi, and the deputy for fiscal and monetary
\npolicy at the National Development Planning Board (Bappenas),
\nSukarno Wirokartono.<\/p>\n
Head of House Commission VIII for state budget and finance
\nTayo Tarmadi said Anwar was picked because he had the concepts
\nand strategy to help Bank Indonesia become fully independent in
\nline with the country's new central bank law.<\/p>\n
\"Anwar also has a strong commitment to improve the image of
\nBank Indonesia,\" he added.<\/p>\n
Anwar is the dean of the faculty of economics of the respected
\nUniversity of Indonesia. He is also president commissioner of
\nstate-owned cementmaker PT Semen Gresik.<\/p>\n
Tayo said Anwar would have to leave his other posts.<\/p>\n
Anwar has been a strong critic of the government's past
\neconomic and banking policies, which reportedly contributed to
\nthe current economic crisis.<\/p>\n
During a recent hearing with House commission VIII, Anwar said
\none of the duties of the senior deputy governor was to assist the
\ngovernor of the central bank to attain short-term monetary
\ntargets as agreed with the International Monetary Fund, which is
\nleading a bailout package for the country.<\/p>\n
Anwar, however, said the IMF programs needed adjustment to
\nreflect the real condition of state and local businesses.<\/p>\n
\"We have to create home grown programs which are debated with
\nthe House and the public,\" he said.<\/p>\n
He also vowed to stamp out corruption at the central bank in a
\nbid to boost the image of Bank Indonesia as the country's
\nmonetary authority.<\/p>\n
Legislators also approved on Monday the reappointment of six
\ncentral bank deputy governors, who previously served as
\ndirectors.<\/p>\n
Subarjo Joyosumarto and Achjar Iljas were both appointed
\ndeputy governors for three-year terms, Achwan and Dono Iskandar
\nfor two-year terms, and Iwan Prawiranata and Aulia Pohan one-year
\nterms.<\/p>\n
Under the new central bank law, approved by the President in
\nMay, the House has a greater say in deciding on key positions at
\nthe central bank.<\/p>\n
Habibie in May reappointed Bank Indonesia Governor Sjahril
\nSabirin to lead the central bank for another four year-term, and
\nMiranda S. Goeltom as deputy governor also for a four-year term.
\nMiranda previously served as a director at Bank Indonesia.<\/p>\n
The central bank law is designed to free the central bank of
\npolitical intervention and make it independent in deciding
\nmonetary policy.<\/p>\n
The central bank governor heads the board of governors, which
\nincludes the senior deputy governor and deputy governors.<\/p>\n
Under the law, the President cannot dismiss the governor or
\nmembers of the board of governors.<\/p>\n
According to the law, the government is obliged to ask for the
\nadvice of Bank Indonesia or to invite the governor to a Cabinet
\nmeeting on economic and monetary affairs.<\/p>\n
The board of governors will advise the government on drafting
\nthe state budget or other economic policies related to Bank
\nIndonesia authority or function.<\/p>\n
The board of governors arranges a monthly meeting, in which a
\nrepresentative of the government is invited, to decide on
\nmonetary policy.<\/p>\n
The board of governors also organizes a weekly internal
\nmeeting to evaluate the monthly monetary policy.<\/p>\n
The meeting is valid if it is attended by at least half of the
\nmembers of the board of governors.<\/p>\n
Decision-making can be done through a voting mechanism. In
\ncase of a tied vote, the final decision will be in the hands of
\nthe governor.<\/p>\n
Bank Indonesia is targeting a single digit inflation rate this
\nyear. The central bank has also said it intends to continue
\nlowering its benchmark interest rate to below 15 percent by the
\nend of this year.(rei)<\/p>",
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