LAST UPDATED : 2010-07-31 10:53:17 GMT+7 
 


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Indonesian president unlikely to be impeached

 
Salim Osman
The Straits Times
Publication Date: 09-02-2010

An ongoing inquiry into the controversial bailout of a troubled bank has appeared to clear Indonesian President Susilo Bambang Yudhoyono of any wrongdoing, but analysts say it leaves the fate of his two reformist icons uncertain.

Dr Yudhoyono, Vice-President Boediono and Finance Minister Sri Mulyani Indrawati, were not named in the preliminary findings of a parliamentary inquiry released on Monday (February 8).

But this does not put Dr Boediono and Dr Sri Mulyani - accused of poor decision making in authorising the bailout - in the clear, as lawmakers are still calling for legal action to be taken against officials who were involved in the bailout.

This could include Dr Boediono and Dr Sri Mulyani, who as the central bank governor and chairman of the Financial System Stability Committee respectively, had decided on the 6.7 trillion rupiah (US$713 million) bailout of Bank Century in 2008. The move was condemned by lawmakers, including those from parties in the coalition led by Dr Yudhoyono's Democratic Party.

Lobbying by the Democrats to get their partners to back the government over the bailout, however, seems to have failed, going by the statements lawmakers gave on Monday in the findings.

Golkar legislator Agun Gunandjar Sudarso said the bailout involved 59 acts that broke the law and led to large losses.

Andi Rahmat from the Prosperous Justice Party (PKS) alleged that Bank Century received special treatment from Bank Indonesia, the central bank, and called for an anti-graft probe.

Even the National Mandate Party - which is supposed to be closer to the Democrats - accused Bank Indonesia of violating regulations when it injected funds to keep Bank Century afloat. The National Awakening Party was the only coalition member to back the Democrats and defend the bailout as legal and necessary.

Golkar and PKS also joined the opposition Indonesian Democratic Party-Struggle, Hanura and Gerindra to recommend that legal action be taken against officials involved in the crime.

Analysts say the Democratic Party has to do a lot more to get its partners behind the government. "I believe the lobbying is not over," said analyst Muhammad Qodari of the think-tank Indobarometer.

Indeed, the Democrats might have already struck a deal to leave out Dr Boediono's and Dr Sri Mulyani's names from the preliminary findings.

Senior party official Amir Syamsuddin said the party and its coalition partners were trying to strike backroom deals over the final recommendations of the inquiry, which is due out next month.

Golkar chairman Aburizal Bakrie has also been reported to have engaged in "intensified communication" with Dr Yudhoyono on the issue.

Analysts say the preliminary findings indicate that the President is unlikely to be impeached - a threat he faced earlier.

But Dr Boediono and Dr Sri Mulyani could still be named in the final findings, though the inquiry committee's chairman Idrus Marham said on Monday he expected the final recommendations to be "no different" from the preliminary findings.

Another question that has yet to be answered is whether any bailout funds were directed to the Democratic Party at last year's elections, as some have alleged.

The two-month probe, however, has so far failed to trace the money trail - which Qodari described as an unfinished task for the parliamentary committee. "Everyone wants to know where the money has gone to," he told The Straits Times.

Bank Century scandal: What it's all about

Bank Century suffered a run on savings in late 2008, as the global financial crisis started to hit Indonesia.

- The central bank and Financial System Stability Committee (KSSK) of Indonesia decided to bail it out, saying it needed to prevent a domino effect that could lead to a collapse of the banking sector. The bailout eventually cost 6.7 trillion rupiah (US$713 million) 10 times what was initially estimated.

- The bailout subsequently raised questions, such as why there was a need to rescue the small bank, why it cost so much, and whether it had been done to protect wealthy depositors.

- A parliamentary committee was set up on Dec 4 to probe the scandal, with much attention focused upon Vice-President Boediono, then central bank governor, and Dr Sri Mulyani, then KSSK chairman. Both have maintained the bailout was necessary.

- Politicians have also called for President Yudhoyono to be impeached, though he has stressed that Parliament has no right to do so unless there is strong evidence of wrongdoing on his part.





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