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