Edwin named new IBRA chief

JAKARTA (JP): President Abdurrahman Wahid said on Friday that he had appointed Edwin Gerungan, a career banker, as the new head of the Indonesian Bank Restructuring Agency (IBRA).

Speaking after Friday prayers in Ciganjur, South Jakarta, Abdurrahman said that his move was aimed at accelerating the country's bank restructuring process.

"IBRA should be agile and brave enough to take action ... that's why I have named Edwin Gerungan (as new IBRA chief)," Abdurrahman said.

"I hope that there will be a positive reaction to this decision from the market, particularly as regards the rupiah and the (share) index," he added.

The President's decision to name Edwin as new IBRA chief was first relayed to the media by Agus Kartasasmita, chairman of the Indonesian Contractors Association (Gapensi), on Friday morning.

He said Abdurrahman had told his association during a meeting at the Merdeka Palace that he had named Edwin, formerly a senior executive of Citibank Indonesia and currently the vice president of the state-owned Bank Mandiri, as IBRA's new chief.

Agus also said that Abdurrahman had appointed I Nyoman Tjager as director general for state enterprises.

I Nyoman Tjager is a former deputy of the now defunct ministry of state enterprises and investment and a senior official with the Capital Market Supervisory Board (Bapepam).

Gus Dur, as the President is widely known, said that his decision to name Edwin as IBRA chief was based on the advice of his "most trusted advisors".

"I fully trust these people and they spoke of Edwin as being the right candidate, so I accepted him," the President said without elaborating.

Edwin, a career banker who has also worked for the U.S-based ARCO (Atlantic Richfield Co) will take over from Cacuk Sudarijanto, who is now Junior Minister for the Restructuring of the National Economy.

Abdurrahman said Cacuk was replaced because he could not hold two positions at the same time.

IBRA is a keystone of the International Monetary Fund-backed program to dig Indonesia out of the shambles left of the economy and banking system after the 1997 regional financial crisis.

Both Edwin and Nyoman are expected to be installed on Monday.

Cacuk entered IBRA in late 1999 and became its chairman last February. Known for his close relations with Abdurrahman's younger brother Hasyim Wahid, he was appointed to the Cabinet in August.

There had earlier been speculation that former president of state-owned Bank Negara Indonesia (BNI) Widigdo Sukarman would replace Cacuk.

But the market responded negatively to the news, particularly due to Widigdo's poor performance in leading BNI, which had to be recapitalized by the government at a huge cost.

Analysts welcomed the appointment of Edwin as IBRA chairman.

"It's positive. He's professional and has integrity," said a senior economist at state-owned PT Danareksa Securities Raden Pardede.

"He also understands how the market works," he added.

Raden, however, said that Edwin must have a deputy who has a strong capability in corporate restructuring.

"The market now wants to see IBRA take some action," he said.

Equity analyst Dandosi Matram also said that the appointment of Edwin was positive because he had few political ties, which would make it easier for him to deal with politically well- connected debtors and former bank owners.

"His moves will be better accepted by the market," Dandosi said.

Meanwhile, Edwin described his new post as a "tough job."

Asked about his strategy, he said: "I can't speak now. I'm new here so I have to study (the new post) first."

"I can tell you on Monday at my installation," he told reporters after meeting with finance minister Prijadi Praptosuhardjo.

IBRA controls assets worth more than Rp 600 trillion (US$66 billion). The agency is mandated to sell the assets to raise cash to help finance the state budget which is heavily burdened by the massive cost of the country's bank restructuring program.

The agency is targeted to raise Rp 18.9 trillion in cash in the current 2000 state budget. It has so far raised only around Rp 14 trillion. IBRA, a unit under the finance ministry, is also required to raise around Rp 27 trillion for the state budget in 2001.

IBRA has been strongly criticized by most analysts and the IMF and World Bank for the slow pace of its asset disposal program. (rei/byg/bkm)