'BI governor should not be politician'

'BI governor should not be politician'

Dadan Wijaksana, The Jakarta Post, Jakarta

The House of Representatives sent a strong warning to President
Megawati Soekarnoputri on Friday not to include politicians on
the list of candidates for the Bank Indonesia governorship as
this would contravene the law.

"The law says that no members of political parties are allowed
(to be appointed). So, let's leave it that way," House Speaker
Akbar Tandjung said, while adding that he had yet to receive the
list of candidates.

Under Law No. 23/1999 on Bank Indonesia, the president has to
submit three candidates to the House, which has the final say in
selecting the central bank governor.

Incumbent Bank Indonesia Governor Sjahril Sabirin will end his
term on May 17. The President has until Monday to submit her list
of candidates to the House.

However, while no candidates have been officially named so
far, rumors that several prominent political figures may be
proposed.

Among these are the current State Minister for State
Enterprises Laksamana Sukardi, State Minister for National
Development Planning (Bappenas) Kwik Kian Gie and former finance
minister Bambang Sudibyo.

While Laksamana and Kwik are all senior members of Megawati's
Indonesian Democratic Party of Struggle (PDI Perjuangan), Bambang
has long been associated with the National Mandate Party (PAN).
Unless they resign from their parties, they would be ineligible
to run for the governorship.

The selection of the new Bank Indonesia governor has aroused
huge public interest, understandable given that whoever holds the
post will have full authority to determine the country's monetary
policy.

This makes the post so strategic that it is almost
inconceivable in today's Indonesia that an appointment will be
made without back-door deals and political haggling.

This would appear to be why people from outside the central
bank are allowed to hold the governorship.

Of the six governors who have held the post since 1968, three
of them came from outside Bank Indonesia.

Sjahril is among those who emerged from within the central
bank as a career officer before being elected governor.

Sjahril took over in 1998 from Sudradjat Djiwandono. He
started his career in the central bank in 1969.

According to Citibank economist Anton Gunawan, the main issue
lay not in the question of whether the elected governor came from
inside or outside of the central bank, but rather whether he or
she would be independent and could work hand-in-hand with other
institutions, such as the House and the government.

"But above all, he or she has to possess a great deal of
knowledge about how to manage monetary policy. This is what
should matter the most," Anton told The Jakarta Post.

Although admitting that a person from within the bank would be
relatively more independent as he, or she, would have a strong
sense of belonging to the institution, Anton acknowledged the
fact that whatever the decision was, it would be more of a
political decision than an economic one.

"That's the tendency at the moment given how strategic the
position is," Anton added.