House wants end to FSPC's role in economic restructuring<\/p>\n
JAKARTA (JP): Legislators called on the government to
\nterminate the role of the powerful Financial Sector Policy
\nCommittee (FSPC) in the country's major bank and corporate
\nrestructuring programs of the Indonesian Bank Restructuring
\nAgency (IBRA).<\/p>\n
The legislators said on Wednesday that the FSPC had not been
\neffective and had instead obstructed the work of IBRA.<\/p>\n
\"The finance minister can propose the President dissolve
\nFSPC,\" said Paskah Suzetta, a senior legislator of the Golkar
\nParty, during a hearing between the House of Representatives
\nCommission IX on state budget and finance, and Finance Minister
\nPrijadi Praptosuhardjo.<\/p>\n
\"The FSPC has often made damaging intervention (to IBRA),\"
\nadded Zoelvan Lindan, a legislator of the Indonesian Democratic
\nParty of Struggle (PDI-Perjuangan).<\/p>\n
FSPC groups several senior economic ministers led by
\nCoordinating Minister for the Economy Rizal Ramli. The committee
\nhas the final say on major bank and corporate restructuring
\nprograms designed by IBRA.<\/p>\n
The FSPC was formed early last year, following the high
\nprofile Bank Bali scandal, which allegedly involved a senior
\nofficial of IBRA. The committee was supposed to ensure good
\ngovernance at the agency.<\/p>\n
Prijadi is expected to respond to the calls at a follow-up
\nmeeting next week.<\/p>\n
The legislators' demand, however, may create a new political
\nobstacle to the country's major economic reform program already
\nstrongly criticized by the International Monetary Fund due to the
\nsnail's pace of the reform implementation.<\/p>\n
But Paskah said that the FSPC had failed to make credible
\ndecisions.<\/p>\n
\"It's only slowing the work of IBRA,\" he said.<\/p>\n
He said that according to the existing law, there was no
\nobligation for IBRA to seek the approval of the FSPC for its
\nmajor bank and corporate restructuring program.<\/p>\n
\"IBRA should only report to the finance minister,\" Paskah
\nsaid.<\/p>\n
Zoelvan added that IBRA must only report to the finance
\nminister to ensure that the agency was not being used as a
\n\"vehicle\" by a certain group.<\/p>\n
The question over the role of the FSPC gained momentum
\nfollowing the recent resignation of two IBRA deputy chairmen
\nwhich was widely believed to have been prompted by the extensive
\nintervention by the FSPC in IBRA.<\/p>\n
IBRA deputy chairmen Jerry Ng and Mahmuddin Yasin recently
\nannounced their plans to resign. But the finance minister has
\ninsisted Mahmuddin stay.<\/p>\n
House members also suspected that the resignation of the two
\ntop IBRA officials was due to the strong intervention by the
\nFSPC.<\/p>\n
\"Why have they resigned? Is it because of the strong
\nintervention (of FSPC)? They can't just submit their resignation
\nwithout a clear reason,\" legislator Tjahjo Kumolo said.<\/p>\n
The top IBRA officials openly denied suggestions that their
\nresignation had anything to do with FSPC intervention.<\/p>\n
IBRA controls some Rp 600 trillion worth of banking assets
\ntaken over from closed down, nationalized and recapitalized
\nbanks. The assets include bank non-performing loans (NPLs) and
\nownership in various companies surrendered by former bank owners
\nto repay their debt.<\/p>\n
The agency must sell the assets to raise cash to help finance
\nthe state budget, and must also restructure the NPLs.<\/p>\n
Under the existing mechanism, IBRA must seek the approval of
\nthe FSPC on any major debt restructuring or asset sale programs
\nworth over Rp 1 trillion.<\/p>\n
But many of the decisions taken by the FSPC have received
\nwidespread criticism, including the seemingly special deals
\nprovided to indebted conglomerates.<\/p>\n
The IMF, which is providing a multibillion dollar bailout loan
\nto the country, has also criticized the delay in the sale of IBRA
\nownership in the publicly listed Bank Central Asia (BCA) and Bank
\nNiaga late last year. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/house-wants-end-to-fspcs-role-in-economic-restructuring-1447893297",
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