Questions on bank recapitalization

Questions on bank recapitalization

In many instances our present Cabinet is as obstinate as its
predecessors in the old New Order regime. There has been
practically no sign of change in either manner or attitude in the
way the Cabinet manages state affairs, despite the demands for
reform. Anything outside the government is regarded as worthless
and must therefore be relegated to the waste bin. Observe, for
example, how the government has responded to public queries about
the takeover of seven banks even though initially only two
possibilities were mentioned of either a freeze or
recapitalization. The government's reply to this question has
been formal and extraneous.

What is especially startling is the effort which those
decision-makers have been making to shroud the demerits of
particular bankers. Consider, for example, the case of Bank
Sanho, which under the initial plan was intended for
recapitalization together with Bank Lippo. This plan was shelved
due to particular problems. Now, the bank has been closed
together with 37 others. Why? Because, according to Bank
Indonesia, its managers and owners were considered errant. The
point is that had no public fuss been made about the earlier plan
to recapitalize the bank, an errant banker would have been
allowed to stay in business, using public money.

It is difficult to digest the reality that Bank Indonesia has
once again been careless in examining and naming errant bankers
at Bank Sanho. There is thus good ground indeed for the public to
suspect that foul play must have had a role in deciding which
banks should be saved and which should die.

One could ask a string of other questions about last week's
bank recapitalization policy, and all those questions would point
to only one fact: various interests, including political, are
still part of the game.

-- Media Indonesia, Jakarta