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f lawmakers really are committed to the long-term good of the economy, they should confirm Finance Minister Agus Martowardojo as the new governor of Bank Indonesia (BI) to replace Darmin Nasution whose tenure will end this May.

Despite mixed market reactions to his nomination, Agus’ performance as finance minister over the past three years clearly shows his managerial skills, leadership and integrity. More importantly, Agus has demonstrated the courage to be completely independent of both the executive and legislative branches of the government, unlike Darmin who frequently seemed too weak to cope with political pressures from vested interests in the House of Representatives.

After his confirmation hearing at the House in July 2010 to replace Boediono, Darmin signed a nine-point political commitment with the House.

One of those commitments — to ensure national banks become master of their own house without foreign control and pushes for reciprocity with other banking systems — seems to have impaired Darmin’s judgment and leadership, as shown by the polemical regulations on foreign banks BI issued last year.

Agus, former chief of the country’s largest bank Mandiri, is well known for his strong commitment to reform and resistance to political pressure.

Agus even stood up to the Cabinet on the Sunda Strait bridge project and asked for amendments to the President’s regulation on the project.

Agus has campaigned for a raise in subsidized fuel prices, against the Cabinet consensus, to curb the huge waste of taxpayers’ money and to force fuel conservation and efficiency.

He fought against major factions in the House which opposed the government purchase of a 7-percent stake in gold miner PT Newmont Nusa Tenggara.

Analysts see Agus’ lack of macroeconomic knowledge as his most glaring shortcoming, especially in the shadow of the European economic crisis and slump in the United States.

Indonesia has suffered knock-on effects from these calamities, manifested in widening trade and current account deficits putting pressure on the rupiah.

But we don’t think Agus’ lack of macroeconomic management skill would be a substantial handicap. All BI deputy governors are experienced, career central bankers.

Agus’ time at the finance ministry will enable him to work with the fiscal authority and other regulators such as the Financial Services Authority and the State Deposit Agency.

Strong monetary and fiscal coordination between the relevant authorities is now of the utmost importance in view of the insecurity of the global economy.

The economy cannot be left entirely to the whims of the market. With the financial sector at the heart of the economy, the financial service industry needs sensible institutional rules and a strong regulatory and legal framework.

The government, whenever necessary, intervenes in the market. To be effective, such intervention needs to be executed by trustworthy and effective institutions.

This is, we think, where Agus’ integrity, leadership and independent stance will play a key role.

The central bank should not only look after the macro-economy, but also the financial plumbing behind it. Experiences from the 2008 global financial crisis have shown that regulatory credibility is key to a stable financial system.

We don’t expect smooth sailing for Agus through the scrutinizing process, but we hope enough factions at the House will come to their senses, listen to their conscience, and duly confirm him as the new central bank chief.