House warns Mega not to propose politician for BI governorship
Dadan Wijaksana, The Jakarta Post, Jakarta
The House of Representatives sent a strong warning to President Megawati Soekarnoputri on Friday not to include politicians on the list of candidates for the Bank Indonesia governorship as this would contravene the law.
"The law says that no members of political parties are allowed (to be appointed). So, let's leave it that way," House Speaker Akbar Tandjung said, while adding that he had yet to receive the list of candidates.
Under Law No. 23/1999 on Bank Indonesia, the president has to submit three candidates to the House, which has the final say in selecting the central bank governor.
Incumbent Bank Indonesia Governor Sjahril Sabirin will end his term on May 17. The President has until Monday to submit her list of candidates to the House.
However, while no candidates have been officially named so far, rumors that several prominent political figures may be proposed.
Among these are the current State Minister for State Enterprises Laksamana Sukardi, State Minister for National Development Planning (Bappenas) Kwik Kian Gie and former finance minister Bambang Sudibyo.
While Laksamana and Kwik are all senior members of Megawati's Indonesian Democratic Party of Struggle (PDI Perjuangan), Bambang has long been associated with the National Mandate Party (PAN). Unless they resign from their parties, they would be ineligible to run for the governorship.
The selection of the new Bank Indonesia governor has aroused huge public interest, understandable given that whoever holds the post will have full authority to determine the country's monetary policy.
This makes the post so strategic that it is almost inconceivable in today's Indonesia that an appointment will be made without back-door deals and political haggling.
This would appear to be why people from outside the central bank are allowed to hold the governorship.
Of the six governors who have held the post since 1968, three of them came from outside Bank Indonesia.
Sjahril is among those who emerged from within the central bank as a career officer before being elected governor.
Sjahril took over in 1998 from Sudradjat Djiwandono. He started his career in the central bank in 1969.
According to Citibank economist Anton Gunawan, the main issue lay not in the question of whether the elected governor came from inside or outside of the central bank, but rather whether he or she would be independent and could work hand-in-hand with other institutions, such as the House and the government.
"But above all, he or she has to possess a great deal of knowledge about how to manage monetary policy. This is what should matter the most," Anton told The Jakarta Post.
Although admitting that a person from within the bank would be relatively more independent as he, or she, would have a strong sense of belonging to the institution, Anton acknowledged the fact that whatever the decision was, it would be more of a political decision than an economic one.
"That's the tendency at the moment given how strategic the position is," Anton added.