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Indonesian MPs set to vet fin min's proposed switch to
February 26, 2013 / 10:06 AM / 5 years ago

Indonesian MPs set to vet fin min's proposed switch to

JAKARTA, Feb 26 (Reuters) - Indonesia’s parliament said on Tuesday a 52-member commission would review the nomination of the country’s finance minister to become head of the central bank, though some MPs have already questioned whether he is the right man for the job.

President Susilo Bambang Yudhoyono nominated Agus Martowardojo for the position late last week but has given no reason why he did not want to renew the term of the current governor, nor why he wanted to move his finance minister out of the cabinet.

“We have received a letter from the President and it will be submitted to the Commission 11 (for financial affairs) for a fit and proper test,” parliamentary Speaker, Marzuki Alie, said in a statement.

The commission has the final say over who heads the central bank. The term of the current governor, Darmin Nasution, ends in May.

Some members of the commission have already made public their doubts over Martowardojo’s suitability to lead Bank Indonesia (BI). One said the career banker lacked macro-economic expertise and another that there were doubts over his integrity.

But chairman of the commission, Emir Moeis, said he was in favour of the move.

Martowardojo, 57, took over as finance minister in 2010 to oversee one of the world’s fastest growing economies and before that headed the biggest state-controlled bank, Bank Mandiri .

“Personally, I think (he) ... is the best candidate to be nominated,” Moeis told reporters.

But he added that his party, the opposition Indonesian Democratic Party-Struggle (PDI-P) had yet to decide.

To secure the position, Martowardojo will need to support of the main ruling coalition parties, including Golkar, whose chairman’s company has been at odds with the finance minister over the purchase of shares in a major mining company.

He has also had run-ins with other powerful business interests, though it is unclear whether that has lost him favour with the president.

Yudhoyono has been criticised in the past for not providing enough political protection for some of his technocrat ministers.

Martowardojo’s predecessor, Sri Mulyani Indrawati, quit the job after relentless criticism from top businessmen, upset by her tough approach on governance in a country which is ranked among the world’s most corrupt.

Riswinandi, deputy head of Bank Mandiri, which Martowardojo used to head, welcomed the stand that the finance minister has taken with neighbouring Singapore, whose DBS Group Holdings almost a year ago agreed to take over Indonesia’s Bank Danamon.

The cash-and-shares transaction would rank as Asia’s fourth-largest banking deal, but it is uncertain whether the Indonesian government will let the deal go through.

In his first public comments since being nominated for the central bank job, Martowardojo said that reciprocity was a key issue in the deal, suggesting that it would not win approval unless Singapore allows Indonesian banks to set up full bank branches.

Singapore is a hugely attractive place for Indonesian banks to operate in, as it is a major channel for funds from Southeast Asian’s biggest economy, and there are a large number of migrant Indonesia workers in Singapore. (Additonal reporting by Rieka Rahardiana, Fathiya Dahrul and Andjarsari Paramaditha, Writing by Jonathan Thatcher; Editing by Simon Cameron-Moore)

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