It is not a surprise to see the DPR’s decision of the proposed candidates, Agus Martowardojo and Raden Pardede, for the Governor of Bank Indonesia (BI). We have known from the beginning that both candidates were nominated without enough support from the public, as well as political support from the Parliament.
However, the comments from the law-makers are surprising. This is what they say:
- Agus is a brilliant banker, but he is a practitioner rather than a monetary decision maker.
- Raden has a fantastic academic background in monetary economics and macro-economy. But, he doesn’t have enough experience as the first person in a big institution.
- Why didn’t the president nominate someone from inside the BI?
Those questions make me wonder; what does it take to be the Governor of BI? Is it a fully-equipped academic background? Is it long-time experience? Is it a career within the central bank?
First, academic background is, of course, important. However, we have learned that a successful governor of central bank does not always have a fantastic academic background. The former chairman of the Fed, Alan Greenspan, for example, was a dropped-out PhD student in economics from New York University. Yet, whether we like him or not, he has been an example of an ideal central bank governor in the US history.
Second, what does it mean by ‘enough experience’? Is it a career in banking or the central bank? Career is a rather vague excuse, especially when it means working in the BI. We know that all members of the current board of governor are now dealing with graft case as investigated by the KPK. In this case, their integrity can be questioned.
In addition, we have also known that the previous BI governors did not always have ‘experiences’ within the central bank or the banking sector. We have a lot of examples that academics were appointed in the BI board of governor, such as Miranda Goeltom, Anwar Nasution and Sudradjad Djiwandono. And, we can say that their performance is ‘not bad’.
Thus, the real reason why they have been rejected is actually politics. I personally think that politics has to come second or third when choosing a crucial position such as the governor of the central bank.
So, what does it take to be a governor of the central bank? To find the answer, we need to observe what is now crucially needed by the central bank, that is, to regain trust. Therefore, I think there are five important requirements to be the BI governor. They are integrity, integrity, integrity, integrity and capability.
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1 comment(s):
Alan Greenspan has always been praised highly. While he was in office.
But nowadays there are lots of doubts about the wisdom of his decisions. The flaws did not materialize then, but what we see happening now is partly due to his policies - or rather the lack of them.
The dangerous debts of the US were not held in check.
The risky policies of American banks were not held in check either.
So after all, most of his peers, now have serious doubts about Greenspan's status as former financial hero.
Whether or not his popularity in the nineties and the early years of this century or the critical reviews now, have anything to do with his academic performance, I don't know however.
colson
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