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The Jakarta Post
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New senior deputy governor vows to carry on with reforms

  • Aditya Suharmoko

    The Jakarta Post

Jakarta | Tue, July 28 2009 | 02:36 pm

Darmin Nasution officially took up his role Monday as the central bank's senior deputy governor, replacing Miranda S. Goeltom and tasked with reforming the bank as a better monetary supervisor amid the global financial crisis.

The former tax czar was inaugurated at the Supreme Court, in the presence of, among others, the BI board of governors, Finance Minister Sri Mulyani Indrawati, Trade Minister Mari Elka Pangestu, State Minister for State Enterprises Sofyan Djalil and legislators.

Darmin will also serve as acting governor, after that post was vacated by Boediono, who left to run with President Susilo Bambang Yudhoyono in the presidential election.

After the inauguration, Darmin said BI as a public institution should be an example for other government institutions, adding he would continue the bureaucracy reform program already underway within BI.

"My experience at the tax office proves that managing an organization and officials are important and non-negotiable," he said.

"We have seen the fate of our nation when bureaucracy is neglected. If bureaucracy breaks down, the damage will be twice as severe.

"I think BI is one of the first public institutions to have conducted reforms. So what needs to be done is to consistently carry out the steps and methods that have been adopted."

Miranda, who was acting BI governor for two-and-a-half months, said there would be a smooth transition of power.

"Darmin is a critical person, he understands issues," she said, adding the central bank should continue supervising the banking sector, since it played a crucial role in the economy.

During the 1997-1998 Asian financial crisis, Indonesia's banking sector collapsed as BI, at that time not yet independent of the government, failed to properly supervise the sector, due to political pressure.

The reforms at BI began in 1999, based on the 1999 central bank law, which was later amended in 2004.

In recent months, two Indonesian banks have collapsed following the financial crisis that broke out last October. The two banks are Bank Century and Bank IFI.

BI Deputy Governor Hartadi Sarwono said Darmin would be very welcome at BI.

"He has broad knowledge," he said. "He won't have difficulties adjusting *to the conditions* here."

Other crucial tasks that await Darmin are to lower the inordinately high bank lending rates that have made businesses reluctant to expand, despite the central bank's lowering of its key rate, and the establishment of the Financial Services Authority (OJK), which is still being discussed by the central bank and the government.

Darmin's profile:

Born in Tapanuli, North Sumatra on Dec. 21, 1948
Education:
- Bachelor of Science in Economics, University of Indonesia ( 1976 )
- PhD in Economics, University of Paris I Sorbonne, France ( 1985 )

Career:
- Head of the University of Indonesia's Social and Economic Research Institute ( 1989 )
- Director general of financial institutions at the Finance Ministry ( 2000 )
- Head of the Capital Market Supervisory Agency at the Finance Ministry ( 2005 )
- Director general of taxation at the Finance Ministry ( 2006 )

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