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SBY's pick of BI gov candidates seen as surprising but positive
President Susilo Bambang Yudhoyono's nomination of total outsiders to head Bank Indonesia was interpreted as an attempt at image control
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President Susilo Bambang Yudhoyono's nomination of total outsiders to head Bank Indonesia was interpreted as an attempt at image control.
A surprise to some, the two nominees -- Bank Mandiri president Agus Martowardojo and vice president of asset management company PT Perusahaan Pengelola Aset, Raden Pardede -- could help give BI a new look after a recent bribery scandal said economists and a lawmaker.
The candidates were proposed by the President to the House of Representatives last Friday.
Standard Chartered economist Fauzi Ichsan, said Saturday the nomination might have come from the president's reluctance to name candidates from within BI, following a case of alleged graft at the bank.
Current BI governor Burhanuddin Abdullah has been named a suspect in the case involving some House members. Burhanuddin denied any wrongdoing, but made it clear he would not seek a second term as BI governor.
"Perhaps the President considers that BI needs (an injection of) fresh blood following the case," Ichsan said.
"However, the nomination was surprising."
Candidates expected to be nominated by analysts included BI senior deputy governor Miranda Goeltom, BI deputy governor Hartadi A. Sarwono, former BI deputy governor Aulia Pohan and Indonesia Stock Exchange president Erry Firmansyah.
The president is allowed to nominate up to three people.
Agus made Bank Mandiri -- formed by the merger of four state-owned banks having fallen into disrepute -- one of the most respected banks in the country. Mandiri is now the country's largest bank and had an NPLs rate of 3.8 percent for the first nine months of 2007, well within BI's maximum 5 percent limit.
"Agus is a master when it comes to bank restructuring," said Ichsan.
Separately, Citibank Indonesia economist Anton Gunawan said that while Agus' expertise lay in the banking sector, Raden was "more than capable" on monetary and fiscal issues.
Raden, who was an executive director at PT Danareksa between 2002 and 2004, also heads the Financial System Stability Forum (FSSK), created to synchronize fiscal and monetary policies and detect early signs of crisis.
"Raden has worked with the Coordinating Minister for the Economy since 2004. He was also an advisor for the Finance Minister," said Anton.
If elected, Raden would create a balance between the fiscal and monetary policies, according to Anton.
A member of the House's commission XI overseeing financial affairs, Dradjad H. Wibowo said that although the nomination had come as a surprise it could be read as the government's way to "clean up" BI.
"BI is now facing a problem related to the scandal. It may add to the trouble if the government insists on BI officials as candidates."
He said that although both candidates might lack certain capabilities -- as they both came from outside BI -- either of them would be able to count on support from other top BI officials if elected.
Burhanuddin's tenure ends on May 17, but regulations require the president to submit names three months early, meaning on Feb. 17.
