Mega proposes familiar figures for BI senior post

Mega proposes familiar figures for BI senior post

Dadan Wijaksana, The Jakarta Post, Jakarta

President Megawati Soekarnoputri's move to propose names from
within the central bank as candidates for the post of senior
deputy governor reflects the government's desire to pick someone
who is already familiar with Bank Indonesia's working
environment, system and culture, according to experts.

Someone from within the organization would adapt to the post
quickly, which would be helpful as the central bank braces itself
to face major challenges clouding the banking sector, experts
said on Thursday.

"While outsiders should not be disregarded, the selection of
these candidates I think is good, as they already know the
system, rhythm, and culture of the bank. This is good so as not
to create shocks to the system," said Paskah Suzetta, deputy
chairman of the House of Representatives Commission IX on
financial affairs.

Raden Pardede, director of Danareksa Research Institute, also
expressed little objection to the nomination. "The fact that they
are all from within the organization means that they will not
have problems in coordination. They can get right down to it."

Megawati submitted to the House of Representatives a list of
three candidates for Bank Indonesia senior deputy governor post
on Wednesday, currently occupied by Anwar Nasution, who's term
ends on July 17.

The three are all career officers. They are Miranda S.
Goeltom, former Bank Indonesia deputy governor; Hartadi A.
Sarwono, central bank deputy governor; and Budi Rochyadi, head of
the central bank's representative office in Tokyo.

Miranda last year was defeated in the race for the post of
central bank governor.

Under Bank Indonesia Law, the House, through Commission IX on
financial affairs, has three weeks to accept or reject the
candidates. In case the House rejects the first batch of
candidates, the President will have to submit a new list.

If the commission rejects the nomination for the second time,
then the President -- with the House's approval -- will reappoint
either the incumbent, or one of the lower-ranking members of the
bank's board of governors.

Currently, Bank Indonesia's board of governors consists of one
governor, one senior deputy governor and four deputy governors.

Dradjad Wibowo, of the Institute for the Development of
Economics and Finance (Indef), has said that strong coordination
was one of the main prerequisites for the central bank to gain
confidence from the banking sector as it enters a critical
period.

He was referring to major changes in the industry; the
restructuring of the banking sector based on the newly released
Indonesian Banking Landscape, and the plans to establish a
Deposit Insurance Agency (LPS) and Financial Services Authority
(LOJK).

The landscape is a blueprint for the banking sector to be
implemented in stages over the next 10 years. Under the
landscape, the minimum capital requirement will be raised in the
next seven years from the current Rp 10 billion (about US$1.2
million) to Rp 100 billion -- a massive move as it could lead to
more bank mergers.

Elsewhere, Paskah added that in the near future the commission
will invite various parties -- including banking experts,
industry players and academics -- to deliver their views on the
current selection process.