New law 'will fire' BI board of governors

New law 'will fire' BI board of governors

JAKARTA (JP): Coordinating Minister for the Economy Rizal
Ramli said on Thursday that the incumbent board of governors of
Bank Indonesia should be suspended after the new central bank law
becomes effective.

Rizal said that this would allow the House of Representatives
to select replacement board members based on the new central bank
law.

"The current board of governors must step down once the new
central bank law is effective," Rizal asserted, implying that
Governor Sjahril Sabirin who resumed his job on Wednesday would
be replaced sometime in January.

The government has proposed a bill to amend the central bank
law, which was enacted in May 1999.

The amendment includes allowing the House to dismiss board
members who have failed to perform well or who have not been
active in office for at least three consecutive months.

Under the current law, the board members cannot be dismissed
unless they have been proven to have committed a crime, become
incapacitated or voluntarily resign.

A House special committee is currently debating intensively
government-proposed amendments to the central bank law. The team
will continue the deliberation process although the House is
scheduled to enter a 32-day recess starting Monday.

Many see the proposed amendment as being aimed mainly at
removing legal obstacles to the ouster of Bank Indonesia Governor
Sjahril from his post.

Sjahril was released Tuesday after five months of house arrest
over alleged involvement in the Bank Bali scandal. Sjahril has
so far denied the allegation.

President Abdurrahman Wahid has been demanding a major
reshuffle at the central bank since last year, but Sjahril has
resisted.

Asked to comment about the release of Sjahril, Rizal said that
Sjahril and other board members could also be linked to other
criminal cases including those concerning the counterfeiting of
bank notes.

He said that the fake bank notes could not have been printed
without collaboration with Bank Indonesia insiders because their
serial numbers were the same as on original notes.

"Sjahril Sabirin is linked to the Bank Bali corruption
case ... but there are also other, larger cases including the
BLBI (emergency liquidity loans)... and the counterfeiting of
bank notes which has inflicted losses worth trillions of rupiah
on the state," Rizal said.

"Somebody must be responsible for these cases, morally and
professionally," he added.

BLBI refers to the Rp 144.5 trillion of government emergency
liquidity support given to ailing banks between 1998 and 1999
most of which was misused by the recipient banks due to weak
supervision on the part of the central bank.

Separately, Rizal said that the House factions on the special
committee have proposed new additions to the government-proposed
amendments, including plans to force Bank Indonesia to pay tax
and to allow the House to debate the central bank's budget.

Meanwhile, Sjahril said on Thursday that if the new central
bank law forced him to step down, he would be willing to do so.

Asked if he still was interested in occupying the top position
in Bank Indonesia, he said: "If my turn comes to an end, so be
it, I've had enough. I'll try to find more fun things (to do)."

Sjahril was speaking at a breaking of the fast gathering with
journalists. He retook possession of his office on Wednesday.

Asked whether he would propose new names to replace the five
members of the board of governors who had tendered their
resignations last month, he said: "I will still have to talk it
over with the House."

Senior deputy governor Anwar Nasution and four other deputy
governors tendered their resignations last month, a few days
before the government proposed the amendment of the central bank
law.

Sjahril reiterated that he had been betrayed by Anwar, but he
declined to provide details.

The President has recently proposed Anwar for the top post at
Bank Indonesia.

Sjahril did not see the amendments of the central bank law as
urgent, saying there are other more important matters to deal
with .

He admitted that the current central bank law might not be
perfect, "but please don't forget it has only been in effect for
about one year."

"If the House feels disappointed with the central bank's
performance, it can summon the central bank board members and
request that they account for their actions," he said.

"The House can control Bank Indonesia. So it's not true to say
that the central bank carries out its day-to-day activities
without House supervision," Sabirin added. (rei)