Economy may be hurt by Century debate : economist

Indonesia should be alert to on the ongoing political debate on the bailout of Bank Century, as it may end up hurting the economy if it remains unresolved, Bank Mandiri economist Mirza Adityaswara says.

"Investors may leave, seeing higher economic growth prospects in other countries, while this country is still busy focusing on politics, when the election finished six months ago," he said Monday in a seminar on Indonesia's economic outlook held by the Indonesian Economic Graduates Institution (ISEI).

The economy may have growth below the 5.5 percent expected by the government in 2010, if the political situation keeps fluctuating, he said.

Bank Century (now rebranded as Bank Mutiara) was saved in November 2008, costing the state Deposit Insurance Corporation (LPS) a total of Rp 6.76 trillion (US$ 716 million).

The government saved the bank to protect the financial sector from a systemic threat, Finance Minister Sri Mulyani Indrawati said. But lawmakers, suspecting there might be other motives, established an inquiry team to investigate the bailout.

Mulyani, who decided on the bailout as the chairman of the now-defunct Financial System Stability Committee (KSSK), will be summoned by lawmakers on Jan. 4 next year.