Friday, March 14, 2008

on BI governor

OK, I've been restraining myself for commenting on this issue. It's just too political, too cheap, and at the same time embarrassing. But I'll vent out what I recently had in mind, so I'll die in peace if the world ends next week.

First, we want a central bank governor who of course, unlike me and most economic commenters, knows monetary and banking theory. We don't want an agronomist or political scientist for that position. We don't require somebody with vast experience as a chief or head or director of some institute or organization or even a big bank. Experience does not matter much. Knowledge does.

Second, we want him/her to be unapproachable, anti-social, or in short: towering figure who doesn't speak much. We don't want him to appear giving statements every day in newspaper or television. That's a job for information minister, not a BI governor. Our governor should just appear rarely only to lead the market. He or she should the one who set people's expectation, not the other way around. He or she should say we want an inflation of X percent next year and the year after. And he/she will do anything to meet that, no matter what. If needed, he or she can forget about other macro stuff. Just set an inflation target and meet it. Don't play too much with credits for SMEs or things like that. They have ministers for that.

Third, we want a BI governor who can say NO -- to the President, MoF, or to DPR people.

I guess we don't have that person, after all. Damn.

5 comments:

Anonymous said...

Educational attainment does matter for any leadership capacity (bupati kek..)I absolutely agree. Many DPR member doesn't achieve sufficient level of education. So why BI governor election must rely on their choice? Amend UU BI!

rizal said...

Alan Greenspan? :-)

johnorford said...

Does Ben "1929" Bernanke fit the bill?

Am sure most Americans would pay Indonesia to take him!

Syurkani said...

Mas Aco, it's me Syurkani. Hope you remember....
Well! about BI, if someone wants to have an Alan Greenspan to head BI, I don't think it's attainable. BI is not the Fed, and Indonesia isn't comparable to US.I do agree, however, that BI Governor must be untouchable. Just change the governor board structure. Make it inclusive like the Fed BOG where members come from different backgrounds. That's how we could attain to have the highest possible standard of a central bank governor.

Aco said...

Rizal, Greenspan would do. The hawkish Greenspan, not the one giving book signing now.

John, see above :-)

Syurkani, wah apa kabar, Mas? Long time no see. Of course we do not have an Alan Greenspan. And we have different system, too. But yes we don't need a governor who knows more about SME credit and less about monetary.