Appointment of BI board of governors 'delayed'

Appointment of BI board of governors 'delayed'

JAKARTA (JP): The House of Representatives may not approve the
amendment to the central bank law this week, according to a key
legislator.

If the amendment is not approved this week, appointment of the
central bank's new board of governors would be delayed until
after the Idul Fitri holidays, legislators said on Monday.

Head of the House special team on the amendment of the central
bank law, Theo F. Toemion, said that House factions would only
begin debating the amendment today and debates might not be
finished by the end of this week.

The legislators will start their one-month recess next Monday.

"It will be a long and tough debate," Theo told reporters
following a closed door meeting of the House special team.

He said that the House special team would continue the debate
after the recess if it were not finished this week.

The House had expected to complete the debating on Wednesday.

The delay could have serious consequences because five of the
eight-member board of governors, including senior deputy governor
Anwar Nasution, tendered their resignations last month before the
government proposed the amendment of the central bank law.

Although they will remain active until their successors have
been appointed, analysts said that the immediate appointment of
the new board of governors was crucial to maintain confidence in
the country's monetary policy.

Experts said that it was hard to imagine Bank Indonesia could
make crucial policy decisions unless the new board of governors
had been installed.

Meanwhile, member of the House special team Rizal Djalil said
that although it would be difficult to finish the debate soon,
there was a possibility that the amendment could be approved this
week.

"It really depends on the dynamics and what happens tomorrow,"
Rizal said.

The government recently proposed a four-point amendment to the
central bank law, approved by the legislature in May 1999, which
makes it extremely difficult to fire the Bank Indonesia Governor.

According to the government-proposed amendment, the Bank
Indonesia board of governors could be dismissed by the House if
they failed to meet monetary targets set at the beginning of each
year or if they failed to be active in office for three
consecutive months.

Sjahril has been under House detention since June over alleged
involvement in last year's high profile Bank Bali scandal.
Sjahril has denied any wrong doing and has refused to resign
despite pressure from President Abdurrahman Wahid.

According to the existing law, members of the Bank Indonesia
board of governors cannot be dismissed before their term ends
unless they have been proven to have committed a crime, become
incapacitated or voluntarily resign.

Coordinating Minister for the Economy Rizal Ramli has denied
suggestions that the proposed amendment was aimed at ousting
Sjahril from the top position at the bank.

He said that the amendment was basically aimed at boosting
public accountability of the central bank.

He said that without the accountability, the present
independent status makes it possible for Bank Indonesia to cover
up past corruption.

Separately, head of the House of Representatives Commission IX
Benny Pasaribu met Monday with the International Monetary Fund
Jakarta representative John Dodsworth.

Benny said that the IMF wanted to get first hand information
about the plans to amend the central bank law.

Benny denied suggestions that the Indonesian Democratic Party
of Struggle (PDI-P) was preparing their senior executives to be
nominated to the Bank Indonesia board of governors.

The government has agreed to the PDI-P proposal to allow
political party members to be nominated as members of the board
of governors, impossible under the existing law.

There have been rumors that PDI-P and Golkar party were
preparing their candidates for the top post at Bank Indonesia.
(rei)