House to complete amendment to BI law next month

House to complete amendment to BI law next month

JAKARTA (JP): The House of Representatives expects to complete
the deliberation on the amendment to the central bank law
sometime in the middle of February, according to a key
legislator.

The House special team deputy chairman Daryatmo said on Monday
that although the deliberations on most of the proposals would be
completed by the end of this month, more time was needed for
"some fine-tuning."

"We think it can be completed by the end of January or in the
middle of February," Daryatmo told reporters on the sidelines of
a closed-door meeting with the government over the amendment to
the central bank law.

The House was expected to pass the bill at the end of this
month.

The government proposed in November a controversial bill to
amend the central bank law, which critics have said was merely
designed to oust Bank Indonesia Governor Sjahril Sabirin and his
deputies before their term expire.

There have been rumors that Abdurrahman wants to install his
men at the helm of Bank Indonesia.

According to the law, the President can propose candidates for
the position of Bank Indonesia governor and senior deputy
governor to be selected by the parliament.

The International Monetary Fund (IMF), which is providing a
multibillion dollar loan to the country, is closely watching the
amendment process of the central bank law.

The IMF has delayed the next disbursement of its loan pending
the completion of the amendment to the law.

There has been concern that the amendment would diminish the
independence of the central bank, which would hurt investor
confidence in the ailing economy.

Separately, presidential spokesman Wimar Witoelar said on
Monday that President Abdurrahman Wahid had assured visiting IMF
deputy director for Asia Pacific Anoop Singh that Bank
Indonesia's independence would be preserved despite the amendment
to the central bank law.

Wimar also said the President would press ahead with his plans
to replace Sjahril and his deputies as part of the effort to
reshuffle the troubled Bank Indonesia.

Singh met with Abdurrahman over the weekend.

Abdurrahman has long demanded for Sjahril's resignation but
according to the existing central bank law, members of Bank
Indonesia board of governors cannot be dismissed unless proven to
have committed a crime, are incapacitated or voluntarily resign.

The existing central bank law, which gives the central bank
independence, was approved by the parliament in May last year
during the administration of president B.J. Habibie, the hand-
picked successor of former authoritarian ruler Soeharto.

The current government has proposed that the House should be
able to dismiss members of the board of governors if they fail to
meet monetary targets or been inactive in office for three
consecutive months.

The government has said the amendment to the central bank law
was needed to rid Bank Indonesia of corruption.

Sjahril has been accused of being involved in the high profile
Bank Bali scandal. He was recently released from a five-month
detention at the Attorney General's Office. His trial is expected
to start soon.

Sjahril has denied the allegations.

Meanwhile, in a sign of rising rivalry with the administration
of Abdurrahman, Bank Indonesia senior officials failed to show up
on Monday for a key meeting with government representatives and
members of the House special team to debate the government-
proposed bill.

"We have asked Bank Indonesia officials to attend the meeting
but they failed to show up," Rizal said.

Sources said the Bank Indonesia officials did not attend the
meeting because they had wanted to play an active role in the
debating process with parliament.

However, Rizal said that according to the country's
Constitution, only the government and the parliament could play
an active role in the law-making process.

He said Bank Indonesia would only be asked for information or
its opinion by the government and the parliament.

Legislator Daryatmo said the absence of Bank Indonesia
officials in the meeting would not obstruct the amendment
process.

"We have taken into consideration the views of Bank Indonesia
during our previous meeting with them," Daryatmo said. (rei)