Van Zorge Report on Indonesia - Michael Buehler

VAN ZORGE REPORT — JUNE 2, 2009At that time, Yudhoyono nominated two candidates, economist RadenPardede, and president director of state-owned Bank Mandiri AgusMartowardoyo. Their nominations were both scuttled by the Housecommittee, however, leading the president to believe that Goeltom wasbehind the action.“Yudhoyono was in Malaysia when he got information about House’smove to drop his proposed candidates,” says the source. “He knew thatMiranda was behind the move because she had ambitions to get the topBI post.”Goeltom, it appeared at the time, was the candidate of choice for HouseCommission XI legislators from Golkar and the Indonesian Democratic Partyof Struggle (PDI-P). It has since been alleged by whistleblower Agus Condro,a PDI-P member who has since been removed from the legislature by hisown party, that he and other commission members each received Rp 500million ($48,500) to approve Goeltom’s nomination as BI deputy governor.The president, according to the source, has two strategies for dealingwith the empty BI governorship besides the worst case scenario ofextending Miranda’s term. First, he could opt simply not to fill theposition, letting Goeltom lead the institution until July. Yudhoyono’snominee to replace her as senior deputy governor, Darmin Nasution,currently the director general of taxation at the Finance Ministry, isexpected to be approved by the House. If approved, Darmin could leadthe bank as senior deputy governor until the president to selects apermanent BI chief at a time of his choosing.This strategy would have several up sides for the president. First, it wouldprevent the BI chief’s nomination process from interfering with theYudhoyono’s campaign ahead of the July 8 presidential poll. Second, if reelected,Yudhoyono would be dealing with a legislature likely to be farmore amenable to his desires than is the current one. “[The president]would prefer to deal with newly elected legislators as it would involve lesspoliticking,” says the source.The Democrat Party will have 150 seats in the upcoming House, as comparedto the mere 57 seats it has in the current one. The commission on financialaffairs would also consist of different legislators than the ones that shot downhis top two picks for BI chief in 2008.The second strategy would be to go ahead and nominate candidates now,despite the heated political environment. “There are several names, includingRaden Pardede, Agus Martowardoyo, and Darmin Nasution, who will be onYudhoyono’s list,” says the source. While those names include the two thatwere originally rejected by the House commission, there’s reason to believethey might stand better chances this time around.Maruarar Sirait was among the PDI-P legislators who initially rejectedPresident Yudhoyono’s proposed candidates, Agus and Raden, the first timearound, but is now singing a different tune. While still mentioning Miranda8