Soedradjad's dismissal draws mixed reactions
Soedradjad's dismissal draws mixed reactions
JAKARTA (JP): The sudden removal of Soedradjad Djiwandono from
the top post at Bank Indonesia (BI), central bank, Tuesday drew
mixed responses yesterday.
Many observers linked it to the government's insistence to
implement the controversial Currency Board System (CBS), which,
it is understood, Soedradjad does not entirely agree with.
The chairman of House Commission VIII for the state budget and
finance, I Gde Artjana, was quick to dismiss speculation that
political motives had caused President Soeharto to take the tough
decision.
He said the dismissal was an acceptable option in the sense
that it was intended to prevent divisions emerging during the
plan's implementation.
"In such a difficult situation we may need a sacrifice. It
however will not adversely affect the country's efforts to cope
with the economic woes. Instead, it will make the plan a
success," said Artjana of the Armed Forces faction.
Soedradjad, who was due to end his term in March, was replaced
by BI director Sjahril Sabirin Tuesday. The new governor will be
sworn in today.
Political analyst Muhammad A.S. Hikam said Soedradjad's
replacement raised eyebrows as to the government's commitment to
overcome the financial crisis.
He said Soedradjad had contributed a lot to improving
Indonesia's monetary system, and therefore should not have been
removed.
Economist Didik J. Rachbini was more cautious, saying that it
was Soeharto's prerogative to change the guard at BI.
"The President must have certain considerations when dealing
with the monetary authority. But maybe Soedradjad was removed
because he opposed the CBS plan,"
Inevitable
Artjana deemed the CBS was inevitable now that the
International Monetary Fund's economic reform package was not
enough to help the government shore up the rupiah's free-falling
exchange rate.
"Radical measures suggested by the IMF have proven to be not
helpful enough, and the CBS is the most difficult option we have
to take. This tough decision needs support from all sections of
society, so those who oppose it must be willing to stay away,"
Artjana said.
Hikam said he believed Soedradjad's dismissal was caused by
his disagreement with the government's plan to adopt the CBS and
it would raise questions from the global community on the
government's commitment to proceed with austere economic reforms.
"I'm afraid there will be more pressure from the international
community following the decision," said Hikam of the National
Institute of Sciences.
Another economist, Faisal Basri, suggested an intellectual
discourse on whether the CBS would help the ailing rupiah
recover.
"It seems to me that the CBS is definitely going to happen
without any debate concluding it is the best available option,"
he said. (byg/amd)