Lukman Hakim

JAKARTA (TPP) – One week after the House probe on Century Bank dealt a severe blow  to President Susilo Bambang Yudhoyono’s cabinet by accusing Vice President Boediono and Finance Minister Sri Mulyani Indrawati of illegally bailing out Bank Century, speculations are rife over the future of the president’s grand coaltion and the possibility of a cabinet reshuffle.

But a cabinet reshuffle is not likely in the immediate future, political analysts said last week, as President Yudhoyono will not risk appearing to be seeking revenge so soon after three members of his Democratic Party (PD)-led coalition voted to seek a criminal investigation into the handling of the 2008 Bank Century bailout.

“Reshuffling the cabinet would create the image of Yudhoyono being a vindictive person, ” said Burhanuddin Muhtadi, a political analyst at the Indonesian Survey Institute (LSI).

He said the president’s Thursday night speech, in which he cited the remarkable achievements of Boediono and Mulyani, signaled an effort to conduct “political introspection.”

Yudhoyono said Boediono and Mulyani were not guilty of illegally bailing out Bank Century and were instead saviors of the nation.

 Burhanuddin also said it would be “too extreme” for Yudhoyono to remove non-Democrat ministers in the near future.

“It would only benefit the opposition, particularly in gathering support for launching a strike at the government, even via impeachment procedures, not only against Boediono, but Yudhoyono,” he said.

Burhanuddin further said the chances of the opposition Indonesian Democratic Party of Struggle (PDIP) joining the government had increased given Yudhoyono’s disappointment with the stances of the Golkar Party and the Prosperous Justice Party (PKS) over the bailout investigation.

The PKS was most in danger of being removed from the government as Golkar was guided by more seasoned and crafty politicians, he said.

Burhanuddin further said the PDIP could make up the PKS’s numbers and was looking for alternative funding sources after being in opposition since 2004, in reference to the financial windfalls associated with being in power.

However, he added, the relationship between former President Megawati Sukarnoputri and Yudhoyono was the only obstacle to the PDIP joining the coalition.

Yudhoyono included four PKS members in his cabinet, three from Golkar and two from the Muslim-backed United Development Party (PPP).

But the three parties, together with PDIP, the Great Indonesia Movement Party (Gerindra) and the People’s Conscience Party (Hanura), voted to seek criminal investigations over the bailout.

PD is yet to take a stance on the coalition partners, but one of its  chairmen, Andi Mallarangeng, who is now the minister for sports, said: “We will carry out an evaluation on our coalition and look at ourselves internally, about what we have done and what we will do next.”

Some PD officials have meanwhile warned that the Golkar Party, the PKS and the PPP would be expelled from the coalition after last Wednesday’s vote.

The Democratic Party has previously spoken of the possibility of bringing the PDIP into the coalition, should the time come to replace one of the coalition members.

But Hasto Kristianto, the PDIP’s deputy secretary general, said on Sunday: “I think it’s a bit difficult to do. We have different ideologies. The Democrats stand by a liberal economic system while we uphold a pro-people economy.”

“The way I see it, things will start to become clearer after the PDIP holds their congress in April,” said Burhanuddin.

Stung by three of its coalition partners siding with the opposition in finding the Bank Century bailout was illegal, PD appears to have started courting the PDIP and finding a willing but hamstrung partner in the party’s advisory council chairman, Taufiq Kiemas.

Syarif Hasan, deputy secretary general of PD, dropped in on Taufiq this week and was later asked by reporters whether the Democrats would ask PDI-P to join the coalition.

Syarif said the party was open to any possibility, as “we think positively all the time.”

Despite no official talks between the two parties, Taufiq reiterated his desire to team up with Democrats.

The PDIP needed “renewal,” he said, pointing to its landslide defeat to the Democrats in last year’s legislative elections.

“Why don’t we change?” Taufiq said.

“If we are not in opposition, we will receive benefits,” he said, without elaborating.

Taufiq, who is also the chairman of the People’s Consultative Assembly (MPR), has made no secret of his desire to join the governing coalition, though his wife, Megawati Sukarnoputri, who maintains a firm grip over the PDIP, still harbors deep resentment toward Yudhoyono for daring to contest the presidential elections in 2004.

“I think the chance is small,” the noted political researcher Syamsudin Haris told detikcom last week.

On Taufiq’s desire to bring PDIP into the coalition, Syamsudin said that it has little bezring as it is Megawati who os calling the shots in the party.

“Taufiq may have a wish, but Mega says no then it is finished,” he said.

Megawati is predicted to maintain PDIP’s stance as the opposition as becoming a member of the coalition would only benefit the party’s elite in the form of seats in the cabinet, he added.

“The downside of it is that PDIP will be seen as an inconsistent political party,” said Syamsudin.

PD senior official Marzuki Alie, who is also the Speaker of the House of Reprsentatives, said: “We are ready to cooperate with PDIP.”

Marzuki made it is clear that the present coalition is going nowhere and is not cohesive in ways that warrant “a  re-arrangement” as the coalition agreement calls for.

PD chairman Anas Urbaningrum said: “We are thinking of forming a lean but healthy coalition, which is better than a fat but unhealthy one.”

Golkar Party Priyo Budi Santoso vice-chairman said: ”Our position is that we are a partner of the Dermocratic Party, not a subordinate or whatever. We are equals,” he said.

”Golkar has no plan to leave the coalition, but it all depends on the president,” said Priyo.

Anas, however, gave a positive sign on maintaining the coalition, saying that despite the fact that the three parties gave dissenting votes, PD has yet to decide on revamping the coalition.

“We do not wish to see a divorce within the coalition,” said Anas last week during a political discussion.

In a related development,  National Mandate Party (PAN) chairman Hatta Rajasa expressed his disappointment over the results of the House plenary sessions.

“I am disillusioned, but it`s politics. For me, honesty, loyalty, sincerity and truth are the fundamentals of life,” he said.

In the meantime, the market remained buoyant amidst the political cacophony that has inundated the nation for the past three months.

This week the Indonesian shares composite index hit the so-called psychological mark by reaching beyond 2600.

Observers say this is a clear indication that national and foeign investors remain confident in Boediono and Mulyani, both of whom are held in high esteem in business circles for their impeccable professionalism and integrity.

As usual, the solution to this prolonged crisis is a political compromise that should acommodate the interests of related parties, not the least Golkar Party, whose chairman, Aburizal Bakrie has been beleagured by corporate fiscal problems .

In the past Yudhoyono has demonstrated that he is a master in resolving complex national issues; analysts expect him to do the same in the future.

(The President Post printed edition April 11, 2010)

January 19, 2009

A Golkar whispering campaign aimed at forcing out Indonesia’s finance minister over the PT Bank Century scandal appeared to collapse on Monday as the State Palace declared that Sri Mulyani Indrawati would remain in the cabinet.

Senior Golkar leaders were forced to publicly deny a report on Monday quoting anonymous party officials as saying a deal may have been finalized with President Susilo Bambang Yudhoyono to replace Mulyani with Anggito Abimanyu, head of the fiscal policy agency, in February. The officials were said to be close to Golkar chairman Aburizal Bakrie, a controversial businessman and political adversary of Mulyani.

“Sri Mulyani will not be replaced as finance minister by Anggito Abimanyu,” presidential spokesman Julian Aldrin Pasha said. He also quashed rumors of a meeting and a deal on Sunday between Yudhoyono and Bakrie. “There was no meeting, nor discussion about Sri Mulyani’s position,” Julian said.

Bakrie insisted in a posting on his Twitter account on Monday that he neither met the president nor asked him to fire Sri Mulyani.

Hatta Rajasa, the coordinating minister for the economy, also confirmed that there were no plans to replace Mulyani.

Senior Golkar officials Idrus Marham and Indra Bambang Utoyo insisted there had been a meeting between the president and Bakrie on Sunday to discuss Golkar’s stance on the ongoing House of Representatives investigation into the Rp 6.7 billion ($710 million) bailout of Bank Century.

Lawmakers are investigating the decision by the government to save the lender in November 2008, as well as allegations that some of the bailout funds were diverted to the campaign coffers of Yudhoyono’s Democratic Party.

“The president wanted to know about Golkar’s stance. I don’t think there was a discussion about dismissing the finance minister,” Indra said.

There have been weeks of speculation that Mulyani and Vice President Boediono, who was central bank governor at the time of the bailout and played a key role in approving it, might be forced out as part of a political compromise to wrap up the Century inquiry.

But the House special committee investigating the bailout seems to have lost momentum, as lawmakers failed to fluster Mulyani and Boediono when they testified last week. The finance minister and vice president, both internationally respected economists, have repeatedly said they acted because Century’s collapse would have posed a systemic threat.

Arbi Sanit, a political lecturer at the University of Indonesia, suggested that the anonymous comments from the Golkar officials might have been a ploy to corner Yudhoyono. “Golkar might have threatened to walk out of the coalition and used it as bargaining power to ask [Yudhoyono] to dismiss Sri Mulyani,” he said. “If Golkar leaves the coalition, it could weaken the Democratic Party’s power in the House significantly, and there’s also the possibility other parties would leave the coalition.”

Sri Mulyani’s rocky relationship with Bakrie dates back to when they both served in Yudhoyono’s first cabinet. She told the Wall Street Journal last month that the House inquiry was aimed at ousting her because Golkar officials did not agree with the reforms she was trying to usher in.

Reuters reported on Monday that investors were keeping a wary eye on media reports about Sri Mulyani’s status, with the key focus on whether Yudhoyono would be able to find a successor capable of maintaining the reform drive.

Fauzi Ichsan, an economist at Standard Chartered Bank, said that investors were unfazed by the speculation. “But if she steps down due to politics, it would send a negative signal,” he added

Source: Jakarta Globe

Camelia Pasandaran, Muninggar Sri Saraswati, Markus Junianto Sihaloho & Dion Bisara

Source: The Jakarta Post

The Jakarta Post ,  Jakarta   |  Sat, 10/10/2009 8:16 PM  |  National

President Susilo Bambang Yudhoyono will summon ministerial candidates for an interview soon, an official says.

“I can only say that the President will soon start interviewing the ministerial candidates at Puri Cikeas,” presidential spokesman Andi Mallarangeng told kompas.com after a meeting with Yudhoyono at the latter’s residence in Cikeas in the West Java town of Bogor on Saturday, but he could not confirm the schedule for the interviews.

Yudhoyono and vice president-elect Boediono will be inaugurated on Oct. 20. The President is expected to announce his Cabinet line-up on Oct. 21 and install the Cabinet members on Oct. 22.

Yudhoyono received Boediono, State Secretary Hatta Radjasa and Andi at his private residence and lunched with them on Saturday.

Andi said during the meeting Boediono reported to the President he had completed the draft of government programs for the first 100 days in office and for the coming five years.

Incumbent President Yudhoyono and Boediono won the July 9 election by a landslide.

Source: Bloomberg.com

By Daniel Whitten

Sept. 27 (Bloomberg) — World Bank President Robert Zoellick said the U.S. shouldn’t take for granted the dollar’s status as the world’s main reserve currency.

In remarks set for delivery tomorrow, Zoellick said the “next upheaval” in the international economic order is under way as emerging nations gain greater influence.

“The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” according to excerpts released by the World Bank.

Policy makers from China to Russia repeatedly have called for an alternative to the world’s main currency in foreign- exchange reserves.

Zoellick’s speech to the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University in Washington echoes his previous comments about the dollar’s standing.

The trade-weighted Dollar Index has fallen 11 percent since President Barack Obama’s inauguration in January, in part because of a budget deficitprojected to rise to $1.6 trillion this year as the government increases spending to boost the economy. The index measures the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona.

Defense of Dollar

U.S. Treasury Secretary Timothy Geithner last week defended the dollar’s role as the world’s reserve currency. The U.S. has a “special responsibility” to preserve confidence in its financial system, and “sustain the dollar’s role as the principal reserve currency in the international financial system,” he said at a press conference Sept. 24 in Pittsburgh, where leaders of the Group of 20 nations met.

Zoellick also will urge intensified coordination among all countries to be sure that economic growth continues while they recognize that there are still 1.6 billion people in the world without electricity.

The G-20 should become “the premier forum for economic cooperation,” Zoellick will say.

At last week’s summit, officials agreed to establish a “framework for strong sustainable and balanced growth.” Countries with significant deficits in their trade accounts promised to save more, while those with surpluses pledged to strengthen domestic demand.

Peer Review

The G-20 also established a peer-review process to monitor efforts to rebalance economies and to hand emerging nations a greater say in managing world growth.

“The G-20 summit is a good start, but it will require a new level of international cooperation and coordination,” Zoellick will say. “Peer review will need to be peer pressure.”

In the U.S., he called for a bigger role for the Treasury Department in pulling together the authority of federal agencies to regulate financial markets. Leading up to the financial crisis, “regulators and supervisors of financial institutions were no longer grounded in reality,” he said.

He also criticized central banks, saying they failed to address growing risks in the economy in the last several years.

Central banks “argued that damage to the real economy of jobs production, savings and consumption could be contained, once bubbles burst, through aggressive raising of interest rates,” Zoellick said. “They turned out to be wrong.”

To contact the reporter on this story: Daniel Whitten in Washington atdwhitten2@bloomberg.net.

Last Updated: September 27, 2009 16:15 EDT

By Hans Nichols and Simon Kennedy

Sept. 25 (Bloomberg) — World leaders will today announce the Group of 20 nations is replacing the G-8 as the main forum for global economic coordination, reflecting a shift in power from rich countries to emerging markets.

The decision, unveiled in a White House statement late yesterday, comes as President Barack Obama, Chinese President Hu Jintao and other leaders gather in Pittsburgh for their third summit in a year to reshape the governance of the world economy following the worst financial crisis since the Great Depression. The G-8 will still exist and may meet on separate matters such as security, a U.S. official said earlier.

The transfer of influence to the broader group, whose membership ranges from the U.S. to China to Saudi Arabia, symbolizes the fact that the richest industrial nations now lack the sway to govern the world economy alone after their excesses sparked the turmoil that tipped the globe into recession.

“The G-20 needs to prove it can make the tough calls and implement agreed outcomes in a timely fashion,” said Tim Adams, who served as the U.S. Treasury’s top international official under former Secretaries John Snow and Henry M. Paulson and is now managing director of the Lindsey Group. “I think it will succeed, but the G-20 must prove skeptics wrong and that will take time and effort.”

The G-20 accounts for about 85 percent of global gross domestic product and was created after a spate of currency devaluations plagued emerging markets from Russia to Thailand in the 1990s. The G-8 oversees about two thirds of global GDP.

‘One Chance’

“What we are trying to do is create a system for economic cooperation across the world,” U.K. Prime Minister Gordon Brown said yesterday. “We have this one chance to make a huge success of international cooperation.”

Originally a forum for finance chiefs, G-20 leaders met for the first time in Washington last November and again in April in London as they sought to rescue the global economy from its deepest slump in seven decades.

The financial crisis has thrust greater responsibility on to the G-20. At the onset of the turmoil, central bankers used talks near Cape Town in November 2007 to hatch a plan to inject more dollars into markets.

The G-20’s new-found power reflects how the recent slump was led by housing and financial market busts in major economies and the recovery is now being driven by countries such as China. That’s a reversal from previous crises when the G-8 was in the driver’s seat of the recovery effort.

China’s Role

China has already overtaken Germany to become the world’s third-largest economy and may soon be named the biggest exporter. It passed Japan a year ago as the main foreign investor in U.S. government debt. China, Russia, Brazil and India together hold about 42 percent of international reserve assets, excluding gold.

“You can’t possibly have a mechanism” for sustaining global economic stability without including China, saidLaura D’Andrea Tyson, an outside adviser to PresidentBarack Obama and former chairman of the White House Council of Economic Advisers under President Bill Clinton. “It’s too big a player in trade and investment.”

Economists at JPMorgan Chase & Co. predict developed economies will shrink 3.3 percent this year and grow 2.8 percent in 2010, compared with growth of 0.5 percent and 5.8 percent in emerging markets.

G-20 leaders meeting today are discussing an agenda aimed at tackling global imbalances, restraining banker pay, raising capital at financial companies and revamping control of the International Monetary Fund.

Bretton Woods

The need for economic policy makers to convene regularly grew out of the turmoil that followed the abandonment of the Bretton Woods system of fixed currencies and the oil shock of the 1970s. In 1975, French President Valery Giscard d’Estaing gathered the leaders of West Germany, Italy, Japan, the U.K. and the U.S. at a summit in Rambouillet, France.

The group soon expanded to seven and its influence reached its zenith through the Louvre and Plaza currency accords of the 1980s and with its responses to financial crises in Asia, Latin America and Russia in the 1990s. It hasn’t intervened in foreign exchange markets since a rescue of the euro in September 2000.

Russia joined after the end of the Cold War to expand it to the G-8, although its officials are still not invited to finance and economic talks.

The G-20’s new formal role may prompt some investors who had dismissed the G-7 as irrelevant to pay more attention to international gatherings.

“On G-7 meeting weekends now I go fishing, no reporters call and writing up summaries of the G-7 for the most part is pointless as there is no news,” David Gilmore, a partner at Foreign Exchange Analytics, wrote in a report to clients today.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.

To contact the reporters on this story: Simon Kennedyin Pittsburgh at skennedy4@bloomberg.net

Last Updated: September 25, 2009 00:37 EDT

Jim By Jim Finkle and Clare Baldwin

BOSTON/SAN FRANCISCO (Reuters) – Oracle Corp’s (ORCL.O) quarterly software sales came in sharply below expectations, dashing hopes that corporate technology spending is rebounding and sending its shares down 2.7 percent.

New license sales at the world’s No. 3 software maker fell 17 percent, steeper than the 4 percent to 14 percent decline that Oracle forecast three months ago.

Oracle’s disappointing results released on Wednesday came on the heels of positive outlooks for the industry from No. 1 chipmaker Intel Corp (INTC.O) and other technology leaders.

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