House warned against delays in appointing new BI governor
House warned against delays in appointing new BI governor
Dadan Wijaksana
The Jakarta Post
Jakarta
Bankers warned the House of Representatives (DPR) against
delaying the appointment of a new Bank Indonesia governor because
it would undermine confidence in the domestic financial market.
The Association of State Banks (Himbara) and the Federation of
Private Domestic Banks (Perbanas) said that timing would be of
great importance to secure market confidence, meaning sooner
would be better than later.
"It's all about timing. We cannot afford to encounter any
further delays because it would ruin market confidence," Himbara
deputy chairman Saifuddien Hasan told a hearing with House
Commission IX for financial affairs on Wednesday. Perbanas
officials also attended the meeting.
The commission is in charge of selecting the governor.
The hearing was held as part of efforts to garner as much
input as possible from the public in the ongoing process to
select a person for the top post at the country's highest
monetary authority.
President Megawati Soekarnoputri has nominated three people
for the post. They are former senior officials of Bank Indonesia
Burhanuddin Abdullah and Cyrillius Harinowo, and deputy governor
Miranda Goeltom. The list of names was sent to the House three
months ago.
The winning candidate will replace incumbent Governor Sjahril
Sabirin, whose tenure ends on May 17. Sjahril has been holding
the post since 1998, a year before Bank Indonesia became an
independent central bank.
Based on Law No. 23/1999 on Bank Indonesia, the President's
list of candidates would have to undergo a fit and proper process
conducted by House Commission IX.
However, despite receiving the list in early February, the fit
and proper test has yet to take place, giving rise to the concern
that the whole process may not be completed by the time Sjahril's
tenure ends, which is in less than two weeks.
According to the law, that would lead to the extension of the
incumbent officer's term.
The delay could well have the potential to shake the
confidence of financial market players. There have been many
occasions in the past where lawmakers delayed key government
economic programs due to various problems that create
uncertainty.
But Commission IX chairman Max Muin said that an extension of
Sjahril's term would not be necessary as the commission had
pledged to finish the selection job before May 17.
"I can assure you that we will complete the fit and proper
test on the three candidates before May 12 because we've already
scheduled a plenary meeting for the next day to report the
commission's choice.
"So, before May 17, or the day that Sjahril's tenure ends, we
will have the name of his successor," Max told the hearing, at
which Bank Indonesia's employees association was also present.
When each banking association was asked which candidate they
hoped would become the next Bank Indonesia governor, they refused
to give a clear answer, saying that based on the market's
response, all three candidates were seen as market friendly.
Economists have warmly welcomed the nominations, saying that
not only are they all regarded as professionals and have a good
track record in managing the monetary policy, but none of them
are politicians.
However, there are reports which suggest that the fight for
the top Bank Indonesia post will likely be between Miranda
Goeltom, who is backed by Megawati's Indonesian Democratic Party
of Struggle, and Burhanuddin, who is supported by Vice President
Hamzah Haz's United Development Party and other smaller Muslim-
based political parties.
Reports said that the winner would depend on which person
would be supported by the Golkar Party, which had unsuccessfully
asked Megawati to include other names on the list of candidates.