Ministry of Finance launches reorganization drive

Dadan Wijaksana, The Jakarta Post/Jakarta

The planned reorganization of the Ministry of Finance took place on Friday -- with the directorate for budgetary affairs having been split into two -- in a move to help boost efficiency and avoid overlapping policy.

The shake-up established a new and powerful directorate called the Directorate for State Treasury, in addition to the Directorate for Budgetary Affairs and Fiscal Balance, to be headed by Mulia P. Nasution and Achmad Rochjadi, respectively.

The official inauguration was carried out by the Minister of Finance, Boediono.

Achmad's unit will be in charge of conducting the planning for state budget allocations both spending and revenues, while Mulia's unit will execute those plans.

"This is important to create a check and balance system, as the planner and executor of the state budget is not the same (directorate). It's a common international practice," Boediono said after the inauguration.

The reorganization plan surfaced early last year, as a result of an agreement between the government and the International Monetary Fund (IMF).

Boediono also said the treasury unit would also be responsible for the management of state funds. Not only will the treasury unit have authority to disburse funds to ministries and government institutions, but it will also be responsible for finding resources to finance the state budget.

It would act like a fund manager, tasked to seek alternative sources of funds and provide advice, as well as determine where to invest whenever there was a surplus.

The preparation of state finance reports, cash management, debt management, lending operations, procurement policy and asset management would all fall under the unit's line of duties.

The two directorates, supported by other units within the ministry, will provide assistance in the drawing up of the annual state budget in respective areas -- fiscal policies and fiscal balance between the central and regional governments.

Elsewhere, the Center of Bonds Management Unit (PMON), and Fiscal Analysis Agency (BAF), would no longer be independent units, but would be integrated with the two directorates.

Eyebox

Herwidayatmo to go to Washington

Minister of Finance Boediono announced on Friday that Herwidayatmo, chairman of the Capital Market Supervisory Agency (Bapepam), would take up a new post at the World Bank to represent ASEAN in the Washington-based organization for two years.

Officials of ASEAN governments have been taking turns every two years to represent the region at the Bank and Herwidayatmo would replace a top official from Thailand, Boediono said.

The capital market watchdog head would start assuming his new post on Nov. 1.

Asked about his replacement at Bapepam, Boediono could not name one as a discussion was still underway. -- JP