Bank Indonesia's independence

Bank Indonesia's independence

The opinion offered by National Economic Council secretary Dr. Sri Mulyani is interesting. An independent (central) bank should not be taken to mean that the bank and the government must each go their own way. Rather, both should be sitting down together to discuss economic and monetary matters. Sri Mulyani also considered the granting of independent status to the bank as ill- timed as it was done at a time when the central bank had not put its house in order. Bank Indonesia senior deputy governor Anwar Nasution even called the institution a "bandit's den".

Considering all this, both sides in the current conflict, President Abdurrahman Wahid on the one hand and Bank Indonesia Governor Syahril Sabirin on the other, would do well to do some introspection. Bank Indonesia must reform itself so it will be worthy of being considered credible. The same goes for the government. Its current dispute with the bank's governor should not be resolved outside of the legal structure, especially if the only objective is to replace Syahril with someone else for the sake of consolidating the government's power.

-- Bisnis Indonesia, Jakarta