Letter: The BI saga

Tue, 02/19/2008 11:40 AM | Reader's Forum

The hurly-burly of the Bank Indonesia (BI) case has now started to further unfold following the detention, by the Corruption Eradication Commission, of two senior BI officials, Oey Hoey Tiong, the director of legal affairs, and Rusli Simandjuntak, the head of the central bank office in Surabaya (The Jakarta Post, Feb. 15).

The alleged misappropriation of Rp 100 billion (US$10.81 million) from the central bank was actually predicted by the public since then-President Megawati Soekarnoputri's finance minister in October 2003 proposed -- in the amendment of Law No. 23/1999 on BI -- the setting up of a supervisory board to oversee the performance of the central bank.

The board was, according to the finance minister, intended to strike a balance between the central bank's independence and its accountability.

The board of governors, at that time, rejected the proposal outright saying the supervisory board establishment might be postponed at least until five years.

This means, the law which almost makes the board of governors untouchable in regards their accountability has now hit back at them.

Interestingly the board of governors was, at the time, chaired by Burhanuddin Abdullah who replaced Sjahril Sabirin in May 2003. Being a new BI governor and fresh from a prestigious international financial institution, he should have endorsed the above mentioned proposal to establish a supervisory board.

Had he endorsed such a proposal, he and the other BI board of governors and its senior officials would not have been implicated in the case, and the fund misappropriation would not have happened as the supervisory board began their job.

What's happening now after five years the board of governors said there would be a supervisory board is still an illusion, and they instead, fell victim to their own dislike of oversights within their own institution.

These all showed the failure of Burhanuddin Abdullah to lead BI to become the champion of good governance by neglecting transparency and accountability, and therefore he has refused to be nominated as BI governor for the second term.