House names Anwar for 2nd key position at BI
JAKARTA (JP): The House of Representatives picked on Monday outspoken economist Anwar Nasution to hold the second top position at the central bank for a five-year term.
Anwar, the most vocal critic of the central bank since the early 1980s, was selected for the newly created post of senior deputy governor of Bank Indonesia from three candidates whose names were proposed by President B.J. Habibie on June 4.
Anwar's contenders were the president commissioner of state Bank Mandiri, Binhadi, and the deputy for fiscal and monetary policy at the National Development Planning Board (Bappenas), Sukarno Wirokartono.
Head of House Commission VIII for state budget and finance Tayo Tarmadi said Anwar was picked because he had the concepts and strategy to help Bank Indonesia become fully independent in line with the country's new central bank law.
"Anwar also has a strong commitment to improve the image of Bank Indonesia," he added.
Anwar is the dean of the faculty of economics of the respected University of Indonesia. He is also president commissioner of state-owned cementmaker PT Semen Gresik.
Tayo said Anwar would have to leave his other posts.
Anwar has been a strong critic of the government's past economic and banking policies, which reportedly contributed to the current economic crisis.
During a recent hearing with House commission VIII, Anwar said one of the duties of the senior deputy governor was to assist the governor of the central bank to attain short-term monetary targets as agreed with the International Monetary Fund, which is leading a bailout package for the country.
Anwar, however, said the IMF programs needed adjustment to reflect the real condition of state and local businesses.
"We have to create home grown programs which are debated with the House and the public," he said.
He also vowed to stamp out corruption at the central bank in a bid to boost the image of Bank Indonesia as the country's monetary authority.
Legislators also approved on Monday the reappointment of six central bank deputy governors, who previously served as directors.
Subarjo Joyosumarto and Achjar Iljas were both appointed deputy governors for three-year terms, Achwan and Dono Iskandar for two-year terms, and Iwan Prawiranata and Aulia Pohan one-year terms.
Under the new central bank law, approved by the President in May, the House has a greater say in deciding on key positions at the central bank.
Habibie in May reappointed Bank Indonesia Governor Sjahril Sabirin to lead the central bank for another four year-term, and Miranda S. Goeltom as deputy governor also for a four-year term. Miranda previously served as a director at Bank Indonesia.
The central bank law is designed to free the central bank of political intervention and make it independent in deciding monetary policy.
The central bank governor heads the board of governors, which includes the senior deputy governor and deputy governors.
Under the law, the President cannot dismiss the governor or members of the board of governors.
According to the law, the government is obliged to ask for the advice of Bank Indonesia or to invite the governor to a Cabinet meeting on economic and monetary affairs.
The board of governors will advise the government on drafting the state budget or other economic policies related to Bank Indonesia authority or function.
The board of governors arranges a monthly meeting, in which a representative of the government is invited, to decide on monetary policy.
The board of governors also organizes a weekly internal meeting to evaluate the monthly monetary policy.
The meeting is valid if it is attended by at least half of the members of the board of governors.
Decision-making can be done through a voting mechanism. In case of a tied vote, the final decision will be in the hands of the governor.
Bank Indonesia is targeting a single digit inflation rate this year. The central bank has also said it intends to continue lowering its benchmark interest rate to below 15 percent by the end of this year.(rei)