House Denies BI Losing Independence in P2SK Law Revision

Jakarta - House of Representatives Commission XI has spoken out regarding the revision of the Financial Sector Development and Strengthening Law (UU P2SK), which has been perceived as eliminating the independence of Bank Indonesia (BI) and has become a public polemic. Mohamad Hekal, Deputy Chairman of Commission XI and the working committee for the bill, denied that the revision causes BI to lose its independence. “Actually, what was changed regarding that does not concern BI’s independence. I don’t see which article we amended to interfere with BI’s independence,” Hekal said. He stated that after the revision, in addition to its task of maintaining rupiah stability, BI is also to pay attention to real sector growth and job creation. “Indeed, BI’s objectives have been added so that besides its task of maintaining rupiah stabilisation, it also pays attention to real sector growth and job creation, which is exactly the same as the mandates of central banks around the world, such as in the United States and Europe,” he continued. Furthermore, according to him, the additional duties that must be shouldered by BI exist because labour conditions in Indonesia are already very concerning, compelling President Prabowo Subianto to resolve employment issues. “Our message is more that, as we all know, when Mr Prabowo first became president there was anxiety about Indonesia. Our middle class is shrinking, layoffs are everywhere. Of course, we hope that everyone must share the burden together, that we must think about the condition of the nation, but the independence still operates,” he explained. Additionally, a point stipulating that the President could dismiss the BI governor also became a polemic. However, Hekal clarified that the House did not create an article regarding the dismissal of the BI governor without clear reason. “So, we did not create an article to dismiss the BI governor. But in my opinion, it is already clear how the tenure can end. Indeed, one thing we included, which applies to all institutions, is that they must obey rules and legislation. A president has a mechanism to step down, a House member can be replaced, a minister can be replaced any day,” he said. He stated there was no intention to control or reduce BI’s independence. However, he said this law revision was carried out so that BI continues to carry out its responsibilities fully. “They should not refuse to be given the task of paying attention to all of us, that’s all, but we did not tamper with their independence. However you want to do it, you arrange it, you have the mandate. So, please implement it in your own way,” he concluded.