IBRA gets new chief<\/p>\n
The market should be pleasantly surprised by the official
\nconfirmation on Friday that Edwin Gerungan, a former Citibank
\nIndonesia executive, and not the widely-tipped former state
\nbanker Widigdo Sukarman, will replace Cacuk Sudarijanto as the
\nchief of the Indonesian Bank Restructuring Agency (IBRA). The
\nnaming of Edwin as the fifth chairman of the 32 month-old agency
\nshould bring a sigh of relief to the markets.<\/p>\n
Many had feared that President Abdurrahman Wahid would push
\nahead with his first choice, Widigdo, even at the risk of further
\nerosion of market confidence, as he did with his appointment of
\nPrijadi Praptosuhardjo as the new finance minister in August.<\/p>\n
Should Widigdo have stepped into Cacuk's shoes, as widely
\ntipped by close aides to the President, Abdurrahman would have
\nsucceeded in putting state assets worth as much as 80 percent of
\nthe gross domestic product under the control of two questionable
\npersonalities.<\/p>\n
Widigdo, who recently failed to pass a fit-and-proper test of
\ntechnical and ethical competence to be reappointed chief
\nexecutive officer at state Bank BNI, would have been in control
\nof Rp 600 trillion (US$67.5 billion) in state assets or around 40
\npercent of gross domestic product currently under IBRA
\nmanagement.<\/p>\n
Prijadi, who failed a similar test earlier this year to become
\nchief of state Bank Rakyat Indonesia but was nevertheless
\nappointed as finance minister in August, is ex-officio in charge
\nof overseeing all state companies with combined assets of around
\nRp 165 trillion.<\/p>\n
Even though Edwin, currently a member of state Bank Mandiri
\nmanagement, has yet to prove his worth, the announcement should
\nbe viewed positively by the market amid mounting opposition to
\nAbdurrahman's barely year-old rule and sharp criticism of his
\nfailure to breathe life back into the economy.<\/p>\n
A positive market reaction could be a psychological boon for
\nEdwin to lead IBRA, which is responsible for reviving the banking
\nindustry, restructuring the corporate sector and for raising
\nmoney to help plug a large budget deficit. His 20 years
\nexperience with Citibank Indonesia and his nonaffiliation with
\nany political organizations will help him push through the
\ndifficult, often delicate process of debt restructuring with
\npolitically well-connected business groups.<\/p>\n
The timing of Edwin's installation at IBRA could not be
\nbetter. Last month the agency came under fire from domestic and
\nforeign analysts, including those of the World Bank and
\nInternational Monetary Fund, for making asset-for-debt deals with
\nfour business groups that were widely regarded as unfavorable to
\nthe state. A public hearing between IBRA chairman Cacuk and the
\nHouse of Representatives Commission in charge of state finances
\nrevealed on Wednesday evening that some of the agency's
\nexpenditures were highly questionable. Employing a number of
\nsupposedly independent analysts on its payroll with monthly
\nhonorariums of between Rp 5 million and Rp 10 million but without
\nclear assignments shows the agency does not have any sense of
\nausterity. The questionable expenditures also reveal that the
\nagency does not follow the good corporate governance practices
\nthat it is imposing under its corporate restructuring program.<\/p>\n
Hopefully, Edwin's term will be long enough for him to
\nestablish a good, strong system for managing the resurrection of
\nthe banking industry, resolving the huge corporate debt overhang
\nand rejuvenating the paralyzed business sector. Stability and
\ncontinuity in top management is essential to the agency whose
\nimportance in leading the nation out of its economic crisis is
\nundeniably paramount.<\/p>\n
Like his predecessors, Edwin's greatest challenge to success
\nwill be facing a succession of barriers not only from powerful
\nbusinessmen who will stop at nothing to get the most favorable
\ndebt workout but also from his own boss (President Abdurrahman)
\nwho is notorious for his frequent reversals on important economic
\nmatters. However, we are confident that being a respected
\nprofessional, Edwin will put the public's interests and his
\nintegrity ahead of his personal career ambitions and will
\ntherefore have the courage to stand up against any lobbying or
\nirrational directives from vested-interest political leaders.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-gets-new-chief-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}