Amendment of BI law to be completed soon

Amendment of BI law to be completed soon

The Jakarta Post, Jakarta

The House of Representatives and government officials are
expected to finish debate over the amendment of the central bank
law within two weeks.

Under the proposed amendment, the Bank Indonesia (BI) board of
governors will only consist of five members instead of the
current eight.

"Now that there are relatively no obstacles left, I think we
can wrap this up in the next one or two weeks," said Dudi Makmun
Murod, chairman of the House of Representatives committee in
charge of debating the amendment.

Minister of Finance Boediono also expressed optimism that the
amendment of the central bank law could be completed by the first
week of March.

The long-suspended talks on the amendment of Bank Indonesia
Law No. 23/1999 resumed again earlier this year after being put
on hold in the middle of last year during the political
confrontation between then-president Abdurrahman Wahid and
legislators.

At that time, the proposed bill was widely recognized as an
effort by the government to oust Sjahril Sabirin and his
deputies, sparking concerns that the move might put the central
bank's hard-earned independence in jeopardy.

However, the government has argued that the bill was necessary
to establish a better accountability mechanism for BI's policies.

That came after reports from Supreme Audit Agency (BPK),
claiming that BI could have played role in the suspected abuse of
some Rp 138 trillion (some US$13.7 billion) worth of liquidity
support loans during the financial crisis in 1997-1998.

Tuesday's meeting saw the government and the special committee
agree to scrap the members of BI's board of governors down to
five from eight members.

Currently, BI's board of governors comprises of one governor,
one senior deputy governor and six deputy governors. The new law
would allow the central bank to have only three deputy governors,
one senior, one deputy governor, and a governor.

"Members of the board of governors appointed based on (the
existing) law are declared as ending their terms (but) will be
reappointed ... except for those that have (submitted)
resignation (letters)," said the proposed bill.

This would affect senior deputy governor Anwar Nasution and
deputy governor Miranda Goeltom, currently in charge of foreign
exchange and monetary policy, who tendered their resignations in
2000 amid clashes between the central bank and the previous
administration.

Anwar and four of the six bank deputies handed in their
resignation letters in late 2000.

Three of the deputy governors were replaced in December, while
Anwar and Miranda have remained in office until now.

It was also revealed that the president must submit names to
fill the vacant senior deputy governor's position within one
month after the amendments were passed.