House to hold hearing on next BI governor

Agustina Wayansari , The Jakarta Post , Jakarta | Wed, 03/05/2008 2:16 AM | Business

The House of Representatives will hold a public hearing before March 15 in responding to all 10 factions' rejection of the two central bank candidates proposed by the President.

"Out of 38 members who attended the meeting, 23 members voted for a public hearing before the fit and proper test, while 12 people rejected and only three members requested the President to add one more candidate," H. Awal Kusumah, a member of House Commission XI from Golkar Party, said Monday.

Awal said they would set the time for the public hearing before March 15, which would be the date for a House plenary session.

"We will invite economists from the University of Indonesia, Perbanas University, Gadjah Mada University and former BI governors to review and give their objective opinions on the two candidates' capabilities," he said.

The President proposed Agus Martowardojo, currently the president director of the country's biggest bank, Bank Mandiri, and Raden Pardede, currently the head of the state's asset management company PT PPA.

According to an article in the 2004 law on Bank Indonesia, the president appoints and inaugurates BI governor with approval from the House. Another article says that if House members do not approve the candidates, the president should nominate other candidates.

The House should decide the new central bank governor before May 17.

Economist Fadhil Hasan from the Indonesian Institute for the Development of Economics and Finance (Indef) said both candidates had the capacity, but with different areas of expertise.

"Agus has a good track record in managerial capacity and good governance in managing a big bank with huge assets, while Raden has been known as an expert in fiscal and monetary issues," said Fadhil during a discussion Tuesday.

Fadhil said with their different capabilities, it would be easy to choose among them. However, he said, it was normal if there was a discourse about new candidates to see more options.

According to him, the central bank's future leader should have the capacity to cooperate well with the fiscal authority as well as to improve good governance, which he considered one of the major issues with the bank.

Another speaker, Tony A. Prasetiantono, chief economist at state-owned bank BNI, said he was surprised that BI was not as solid as he thought, especially with several corruption cases involving the bank's top officials.

He also said applying internal election mechanisms such as those proposed by other experts would be bad for the BI's credibility and would hinder the possibility of accommodating capable candidates from outside the bank.

He also said BI could start improving good governance by establishing independent committees to address strategic issues such as risk management, recruitment for top officials and remuneration.(rtf)

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