President Susilo Bambang Yudhoyono’s surprise choice of Agus Martowardojo to run Indonesia’s central bank is gathering support among some members of the parliamentary committee that will decide on the appointment.
Martowardojo, the finance minister, “is a good choice,” Zulkieflimansyah, vice chairman at the Indonesian parliament’s commission XI, which oversees financial affairs, said in an interview in Jakarta yesterday. Should Martowardojo swap roles with current Bank Indonesia chief Darmin Nasution, the economy will be “in a strong and healthy shape,” said Arif Budimanta, a member of the committee.
Yudhoyono last week nominated Martowardojo as his only candidate to succeed Nasution, whose term ends May 23, meeting with mixed reactions as some analysts questioned his record as finance minister and others praised his banking experience. At stake is the candidate’s ability to shepherd Southeast Asia’s biggest economy as it faces a weakening currency, a widening current-account deficit and inflation stemming from power tariff increases and higher wages.
“Martowardojo has experience, integrity, firmness and leadership, and all of these characteristics are needed to lead the central bank,” said Zulkieflimansyah, who goes by one name. “There won’t be any problem for him to get it, most likely he’ll win it.”
The finance committee may hold a so-called fit-and-proper test on Martowardojo’s suitability in the second week of March, said Budimanta, who is from former President Megawati Soekarnoputri’s Indonesian Democratic Party of Struggle. The assessment may be held about March 12-18, according to Harry Azhar Azis, another vice chairman of the finance committee.
The commission’s decision would then have to be endorsed by a plenary session of Parliament. The finance committee has 14 people from Yudhoyono’s Democrat Party faction, 10 from the Golkar faction, and eight from the Indonesian Democratic Party of Struggle faction among its 49 members.
“There’s a chance for Martowardojo to be approved by the parliament for the next governor but it won’t be easy,” Deputy Speaker of the House Priyo Budi Santoso told reporters in Jakarta yesterday, without elaborating.
Martowardojo, 57, former president director of PT Bank Mandiri, was rejected for the top central bank post by the parliament’s finance committee when Yudhoyono picked him in 2008.
Yudhoyono hasn’t said who he would appoint to replace Martowardojo at the finance ministry should he win Parliament approval to move to the central bank.
People who are eligible to become the next finance minister include Vice Finance Minister Anny Ratnawati, Deputy Minister Mahendra Siregar and Director General of Tax Ahmad Fuad Rahmany, according to Budimanta.
That said, “if the president chooses Darmin Nasution to replace Agus Martowardojo, I think it’s an excellent choice because it would be a change from fiscal policy to monetary and from monetary policy to fiscal policy,” Budimanta said. “Both of them have strong experience in fiscal and monetary policy.”
Zulkieflimansyah, the finance committee’s vice chairman, said having Nasution replace Martowardojo would be “good” as he has experience working in the finance ministry and both men have the ability to lead the central bank and finance ministry.
Others who have the capability to become the next finance minister include Trade Minister Gita Wirjawan, who would be welcomed by investors, said Zulkieflimansyah. M. Chatib Basri, chairman of the Investment Coordinating Board, and Rahmany are also among the most suitable, he said.
The president’s decision to tap Martowardojo for the central bank surprised analysts including Fauzi Ichsan, Jakarta-based economist at Standard Chartered Plc, who said the move would mean a second change in the Finance Ministry’s leadership during Yudhoyono’s second term. Martowardojo has no experience in monetary policy and may be rejected by the finance committee, he said.
While PT Samuel Sekuritas economist Lana Soelistianingsih says Martowardojo failed to provide fiscal support for the economy last year, Bank of America Corp.’s Chua Hak Bin says the minister has helped keep the budget deficit in check. Eugene Galbraith, deputy president director of Bank Central Asia, said “he is a very experienced senior banker” and has done well as finance minister.
Since Martowardojo became finance minister in 2010, Indonesia’s government has sought to reduce fuel subsidies and allocate more spending to infrastructure. The country limited the use of partially government-funded diesel last month, after protests derailed plans to raise fuel prices in 2012. He replaced former Finance Minister Sri Mulyani Indrawati in May 2010, when Mulyani joined the World Bank as a managing director.
Martowardojo started his career at Bank of America Corp., according to the Finance Ministry’s website. He was president director of PT Bank Mandiri, the country’s largest lender by assets, before becoming finance minister. The Amsterdam-born banker holds a bachelor’s degree in economics from the University of Indonesia, according to Bank Mandiri’s website at the time of his appointment to the finance role.
Nasution, 64, assumed the central bank governor post in September 2010 after more than a year as acting governor. He has a doctorate in economics from University of Paris, Sorbonne, France, and is the 14th governor in the central bank’s six-decade history. He became acting governor after Vice President Boediono resigned in May 2009 to become Yudhoyono’s running mate in the last presidential election.