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.