Wanted new IBRA chief: Must be clean and capable

Dadan Wijaksana, The Jakarta Post, Jakarta

Now that the government has said it wants to replace the chairman of the Indonesian Bank Restructuring Agency (IBRA), the next question to ask is what qualities should the new chairman have to run the powerful agency in the most appropriate manner.

The new IBRA chief must have strong networking and leadership abilities, and sound knowledge of the finance and banking sector.

To go with that is integrity, credibility and the skill to stay independent, according to banking analysts Elvyn G. Masassya and Ryan Kiryanto.

Over the last few weeks, rumors have abounded that the government might fire IBRA chairman I Putu Gede Ary Suta over a number of decisions he made that drew public fire.

They range from the sale of PT Indomobil Sukses International to a consortium analyst suspected of links with Indomobil's former owner, the Salim Group, to plans for more generous debt payment terms for debtors who admitted to have misused billions of dollars of state funds.

IBRA's fading credibility reached its low-point when it was denied the authority to determine the winning bidder in the high- profile sale of a controlling stake in Bank Central Asia (BCA).

State Minister of State Enterprises Laksamana Sukardi took over the process, citing he wanted to ensure credibility.

Laksamana, who supervises IBRA, confirmed plans to replace Ary Suta, although the latter declined to confirm the news.

IBRA controls around Rp 600 trillion (about US$60 billion) worth of assets transferred from ailing banks the government bailed out during the late 1990s financial crisis.

The agency is now mandated to restructure the assets and sell them to recover the cost of bailing out the banks. The proceeds are used to help cover the state budget's deficit.

Elvyn said that whoever would take IBRA's top post faced an uphill battle of restructuring banks and improving the agency's recovery rates through asset sales.

He said the previous chairmen fell short of doing either well.

"That's why another important point is to have a chairman with a proven ability to strike deals," Elvyn told The Jakarta Post.

He said a chairman like that would prevent the agency from becoming too preoccupied with divestment talks leading to the neglect of banks under its care.

"So far, IBRA has been boasting about its target-achieving feats, without giving much thought to the country's banking sector as a whole," he said.

But analysts laid much of the blame for IBRA's poor performance on too much politicking eroding the chairman's authority.

In the four years since it was set up, the agency has seen five changes in leadership.

Ary Suta's appointment mid last year was widely perceived as one of former president Abdurrahman Wahid's last efforts to fend off the increasing threat of impeachment.

The previous five chairmen were: Edwin Gerungan, Cacuk Sudarijanto, Glenn Yusuf, Iwan Prawiranata and Bambang Subianto.

BNI economist Ryan said the new IBRA chairman should remain independent, including from political considerations.

He said the chairman's independency was vital not only to avoiding political interference but also to maintaining the public's confidence in its policies.

But Ryan and Elvyn agreed that the seventh chairman of IBRA should also be the last one, as the agency is facing its final years.

Established in 1998, IBRA is set to wrap up its work by 2004.

"You can see for yourself, after six chairmen, IBRA's performance is going nowhere yet it continues to draw controversy," Ryan said.

In its remaining two years, he said the agency should focus on restructuring the banking sector.

People touted to replace Ary Suta are economist Arif Arryman, Bank Danamon president Arwin Rasyid and one-time banker and former president of Garuda Indonesia, Abdul Gani.

Arif is a commissioner at BNI and also the managing director of the Econit Advisory Group, a private think tank founded by former coordinating minister for the economy Rizal Ramli. Laksamana was once also a member of the group.

Arwin is the president of publicly listed Bank Danamon and was previously a deputy chairman at IBRA, while former Bank Duta executive Abdul Gani managed to turn around the ailing Garuda into an award-winning airline.