Fri, 24 Nov 2000

House to amend BI law on Dec. 6

JAKARTA (JP): The House of Representatives vowed on Thursday to complete the amendment of the central bank law by Dec. 6, so as to allow an immediate reshuffle of the top management of Bank Indonesia.

House deputy speaker Tosari Widjaja said that the government would propose an amendment bill to a plenary session of the legislature on Nov. 27.

Speaking to reporters following a closed door meeting of the House's consultative body, Tosari said that the various factions in the legislature would then debate the bill on Nov. 29 and 30, and that a special House team would debate it intensively from Dec. 1-6.

He said he hoped the amendment of the central bank law would be approved by all the factions on Dec. 6 and that the central bank's new management team would be selected before the House went into a one-month recess.

"We are planning a long recess from Dec. 11 until Jan. 12, 2001," he said.

He explained that the House had decided to deal with the amendment through the normal legislative process rather than employing the short-cut mechanism as initially planned, in an apparent move to avoid public suspicion that the amendment was intended merely to force out the current Bank Indonesia Governor Sjahril Sabirin.

Tosari did not say when the Bank Indonesia management reshuffle would take place, but if the central bank law were to be amended, the House could easily dismiss Sjahril in accordance with the law and quickly install a new board of governors. This could take place even before legislators start their long recess on Dec. 11.

Under the current central bank law, which was approved by the House in May 1999, the eight members of the board of governors of Bank Indonesia may not be replaced unless they have been proven to have committed a crime, become incapacitated or voluntarily step down.

President Abdurrahman Wahid has long insisted on a reshuffle in the top management of Bank Indonesia so as to rid the central bank of the corrupt practices of the past. But his plan was stymied by the central bank law and the stubbornness of Sjahril, who until now has refused to resign.

The amendment to the central bank law will include a clause allowing for the dismissal of a member of the board of governors if he or she has not been active in office for three consecutive months.

Sjahril has been under house arrest since June over his alleged involvement in the politically-charged Bank Bali scandal last year. Sjahril has so far denied all wrongdoing.

The amendment will also increase the duty of accountability owed by Bank Indonesia, with the House being empowered to fire the governor and the deputy governor should they fail to meet the monetary targets set by the central bank.

The financial markets have shown nervousness over the past few days following the resignation of senior deputy governor Anwar Nasution and four other deputy governors last week.

There has been concern that it may take longer than anticipated for the House to pass the amendment and reshuffle the bank's top management due to the amount of political wrangling going on.

"We must complete the passage of the amendment bill as soon as possible. Delaying it will only create more political difficulties," Tosari said without elaborating.

The President has proposed Anwar and two other Bank Indonesia officials, Siti Fadjriah and Hartadi A. Sarwono, as candidates for the posts of governor and senior deputy governor. But reports say that Siti and Hartadi have turned down the offer. (rei)