Mon, 10 Feb 2003

Clean figure needed to replace BI governor

Dadan Wijaksana, The Jakarta Post, Jakarta

As Sjahril Sabirin's term as Bank Indonesia (BI) governor draws near, calls are mounting for President Megawati Soekarnoputri to name new faces with integrity and untainted track records as candidates for the central bank's top post.

Senior lawmakers said independent and uncontroversial figures for the job would be of high importance to send positive signals to the market.

"Asides from integrity of high quality, what we need is figures that are controversy free. This is important because this position is crucial for market confidence.

"It means that appointing controversial candidates could well shatter confidence," Paskah Suzetta, deputy chairman of the House of Representatives' Commission IX on financial affairs, told The Jakarta Post on Sunday.

Paskah did not elaborate on what he meant by controversial, but his statement appears to indicate his objections to some, if not most, of the names already coming to the surface.

While no names are yet to be officially announced, there has been speculation about who could be in the running.

The names include State Minister for State Enterprises Laksamana Sukardi, State Minister for National Development Planning Kwik Kian Gie, Sjahril himself or his deputies Miranda Goeltom or Aulia Pohan.

Most of are not necessarily free of controversy.

While Laksamana and Kwik are senior members of the ruling Indonesian Democratic Party of Struggle (PDI Perjuangan) -- a situation which prohibits them from being elected unless they drop their party memberships -- the other candidates are also prone to resistance, partly due to their "troubled" pasts.

Sjahril, for instance, has a problem with the law.

Despite having been acquitted of all criminal charges in the Jakarta High Court over his involvement in the Bank Bali saga, his legal battle is set to continue as an appeal process to the Supreme Court is still underway. Restoring his already tainted image would be an uphill task.

Similar treatment will also likely impede the chances of Miranda, who has been accused of alleged wrongdoings when the central bank injected hundreds of trillions worth of liquidity support loans to local banks during the crisis. Most of the funds were later misused.

Paskah did not confirm whether those reasons fitted in with his idea of a controversial figure, only saying: "I leave it all to the public to judge."

Fellow lawmaker Max Muin, who chairs the commission, has said the next governor should be independent and someone that could guide market confidence.

"It would be rather complicating if it turns out to be Sjahril. We need someone who is clean, either from inside or outside the bank," Max said.

The legislators were commenting on the rising public debate over who should lead the central bank after the end of Sjahril's term. His tenure will expire by May 17, although he is still eligible to stay on for another five-year term.

The president has one week left to submit the list of candidates to the House for approval, because by law, it has to be submitted three months before the end of the sitting officer's terms.

Analysts say it is not easy for the President to choose given the short time left and in view of the importance of the post, which has the authority to determine the country's monetary policy.

Given the importance of the post, analysts say, it is almost impossible to expect the selection process to be free from political bargaining.

Elsewhere, when asked to comment on his chances, Sjahril only said on Friday: "I'd leave it all to the president, it's the president who has the right to name the candidates."

Sjahril took office in 1998, replacing Sudradjat Djiwandono. Born in 1943, Sjahril earned his doctoral degree on monetary and international economics from the Vandelbilt University in the U.S. Sjahril started his career at the central bank in 1969.

Law No.23/1999 on Bank Indonesia, Article 47, Verse 1:

BI's board of governors members are not allowed to:

1. Have both direct and indirect interests in any company.

2. Have two or more jobs in other institutions.

3. Become a member of political party.