Election fight may delay BI top job decision

The vacant central bank governor post is now the subject of intense political  jostling between President Susilo Bambang Yudhoyono and Vice President Jusuf Kalla.

While lawmakers are urging Yudhoyono to quickly submit candidates to replace Boediono, who resigned as BI governor after pairing as vice president with incumbent Yudhoyono for the July 8 presidential election, sources close to Kalla said it was unlikely to be an easy choice.

This is because Kalla, who will compete with Yudhoyono in the election, would not want to let his rival submit and finalize candidates to lawmakers for selection for the top BI job until there is a clear result in the presidential election.

“If Yudhoyono insisted on submitting the names, then we would order our lawmakers to reject them,” said the source, adding the candidates would best be decided by whoever won the presidency to ensure positive future cooperation between the government and Bank Indonesia (BI).

Kalla’s Golkar Party and Megawati Soekarnoputri’s Indonesian Democratic Party of Struggle  (PDI-P) dominated the outgoing House of Representatives’ Commission XI for financial affairs, which is tasked with selecting the candidates for the central bank governor to be proposed by the President.

Should these political considerations  prevail then the country is unlikely to have a new central bank governor any time soon, especially since  the last plenary session of the House of Representatives will end on July 12.  The plenary must approve the selection of the central bank governor by Commission XI.

It is not until Oct. 1 that new lawmakers, dominated by Yudhoyono’s own Democratic Party his allies, will take office and start hearings.

Commission XI lawmakers, however, denied this scenario.

“The faster, the better,” lawmaker Dradjad H. Wibowo of the National Mandate Party (PAN) said Monday. “If there is a vacant position, the chain of command [at BI] is [broken and a key position] missing.”

Although Boediono’s position will be temporarily filled by BI senior deputy governor Miranda S. Goeltom, Dradjad said she might no longer focus on her job as Darmin Nasution would replace her soon.

Miranda’s chance of being named a candidate for the post of central bank governor by Yudhoyono is fairly slim, for various reasons.

Commission XI chairman A. Hafiz Zawawi of the Golkar Party also urged the President to submited the candidates, who could include Darmin to become BI’s governor although he had recently been selected to fill the seat of BI’s senior deputy governor, which is the second in command at the central bank after the position of governor.

“According to the law [on BI], the replacement of members of BI’s board of governors is limited to twice a year. If the President wants to name Darmin as a candidate for BI governor, he should do it before Darmin is inaugurated as BI senior deputy governor,” he said.

Lawmaker Andi Rahmat of the Prosperous Justice Party (PKS) said  there was no need to rush on picking the candidates because BI’s policies were made based on collegial decisions. “I think the circumstances are not conducive to appoint the new BI governor. After all, BI can still be managed by the board of governors.”

Outgoing Miranda said every strategic decision made at BI was based on collegial meetings of the board of governors, and if the BI governor was not present, the BI senior deputy governor would take the lead, and if  the senior deputy governor was not present, BI’s most senior deputy governors would take charge.

The most senior BI deputy governor is Hartadi A. Sarwono, who is seen by analysts as the strongest candidate among the BI career officials to replace Boediono.

But the government is currently trying to reform the central bank, which is known for its past poor integrity and accountability, by appointing external professionals to the top jobs.

Finance Minister Sri Mulyani Indrawati is named by several lawmakers as the best candidate for cleaning up the central bank.

However, analysts believed it would be a waste of resources if she was tasked to fill the post because the Finance Ministry faced bigger problems with a wider impact on the economy than those of the central bank.

Internal candidates    Current job

Hartadi A. Sarwono      BI deputy governor
Muliaman Hadad         BI deputy governor

External candidates      Current job

Sri Mulyani Indrawati    Finance Minister
Darmin Nasution          Tax chief and BI
senior deputy
governor elect

Dorodjatun Kuntjoro-Jakti    Lecturer
Agus Martowardojo        Bank Mandiri president director