Anwar called on to clean BI of corrupt practices

Anwar called on to clean BI of corrupt practices

JAKARTA (JP): Bank Indonesia senior deputy governor Anwar
Nasution must act immediately to eliminate corruption from the
central bank to make its monetary policy credible, according to a
group of former Bank Indonesia employees.

Former Bank Indonesia deputy director Darryl Dewantoro,
spokesman for the group, said on Saturday that last week's arrest
and subsequent removal of Sjahril Sabirin from Bank Indonesia did
not automatically make the central bank free of corrupt
practices.

"Anwar must act now to clean up Bank Indonesia," Darryl told a
news conference.

"He once said that Bank Indonesia was a den of thieves, so
there must be concrete action from Anwar to amend the internal
condition of the central bank," he added.

He said that reshuffling central bank senior staff should be a
priority.

Darryl said that if housecleaning within the central bank was
effectively communicated, the market would ignore the current
political trouble undermining the bank.

He explained that Bank Indonesia should have been cleaned up
prior to making it an independent institution to smoothen efforts
to curb corruption at the bank.

Anwar was appointed to temporarily lead Bank Indonesia after
the attorney general detained Governor Sjahril on Wednesday for
his alleged role in the high profile Bank Bali scandal.

Sjahril has denied any involvement, and claims the move to
name him a suspect and his subsequent detention are part of a
political ploy by President Abdurrahman Wahid to oust him from
Bank Indonesia, which according to law should be free from
government intervention.

The Bank Bali scam, which emerged last year, revolves around
the questionable transfer of some US$80 million from the bank to
a private firm linked to the then ruling Golkar Party ahead of a
crucial general election.

The detention of Sjahril has been strongly criticized by
several leading political figures, including House of
Representatives Speaker Akbar Tandjung and People's Consultative
Assembly Speaker Amien Rais.

Amien said the detention amounted to political intervention in
the affairs of the central bank.

Akbar said the move would affect efforts to improve the
country's economy.

The rupiah closed lower on Wednesday and Thursday, but
slightly strengthened to Rp 8,685 on Friday. The local unit has
been under strong pressure since early May due to a combination
of political and social problems at home, and concern over slow
progress in implementing economic reform programs.

Some analysts have said that Abdurrahman has been trying hard
to remove high level people linked to the former authoritarian
president Soeharto from the government and key state institutions
including the central bank.

Sjahril was first appointed by Soeharto as Bank Indonesia
Governor in 1998, and was reappointed in May 1999 for a four-year
term by the House of Representatives following the approval of
the new law on the independency of Bank Indonesia.

A PriceWaterhouseCoopers audit result submitted to the House
says there are indications that Sjahril was involved in the Bank
Bali scandal.

But Abdurrahman has faced difficulty ousting Sjahril from Bank
Indonesia, particularly due to its independency status which
does not allow politicians to intervene in central bank matters.

Abdurrahman drew strong criticism after Sjahril revealed to
the media that the former had repeatedly offered him an
ambassadorial post, implying he would not be implicated in the
Bank Bali scandal if he resigned from Bank Indonesia.

Sjahril rejected the offer.

Under the new Bank Indonesia law, members of the board of
governors cannot be dismissed by the president or even the House
unless he or she is proven to have committed a crime or is
incapacitated. (rei)