Indonesia president backs his top reformers
By Muklis Ali and Olivia Rondonuwu
JAKARTA (Reuters) - Indonesia's president on Thursday rejected parliament's call for a criminal investigation of his two top reformers, and said they deserved thanks for "outstanding service" in averting a banking crisis.
Parliament voted on Wednesday for a criminal investigation of Finance Minister Sri Mulyani Indrawati and Vice President Boediono over their decision to rescue a small bank in 2008.
President Susilo Bambang Yudhoyono, making his first public comments on the vote, gave his full support for the two technocrats. His statements underlined expectations that they will both keep their jobs, which would be positive for reform and for attracting more foreign investment.
The political infighting during the inquiry into the $720 million rescue of Bank Century has highlighted a bitter struggle over reform in Southeast Asia's biggest economy.
The parliamentary inquiry and final vote were widely seen as attempts by powerful business and political groups to discredit and oust Indrawati and Boediono, both of whom are respected for their efforts to krack down on corruption, attract investment, and spur economic growth.
In a televised speech to the nation, Yudhoyono, attended by his cabinet, said Indonesia was lucky to have had Indrawati and Boediono in charge when the global financial crisis hit, as both have "spotless track records in terms of competence, credibility, and personal integrity."
"To those who in a crisis have shown outstanding service to save our national economy, we should show them the utmost appreciation," he said, hinting that he would go after any corrupt officials who had "hidden" behind the Bank Century case.
Yudhoyono said the bailout had been necessary in order to avoid a financial disaster and panic among depositors, as happened during the 1997-98 Asian financial crisis, and said the government hoped to recover its "investment" eventually and even make a profit for the state from the rescued bank.
"It's a shame that during the debate process in the inquiry committee, we tended to forget the difficult moment of the decision to bail out Bank Century," he said.
"In a time of crisis and an emergency, when a decision needs to be taken quickly, there might be some technical problems we missed out. However, that does not mean the policy is wrong. It is hard to imagine our country can run effectively if every correct policy ends up in criminal investigation."
The political tensions over the Bank Century investigation have caused deep fissures in Yudhoyono's ruling coalition, and may stifle policymaking and stunt reforms badly needed to drive growth of Southeast Asia's economy.
Analysts say the highly politicised inquiry was driven by Indrawati and Boediono's enemies, including the Golkar party leader and tycoon Aburizal Bakrie.
Golkar has close links with Indonesia's traditional business elites who could be threatened by reform. Indrawati and Boediono both looked on as Yudhoyono delivered his address with little sign of emotion.
Indrawati told reporters earlier on Thursday that she respected the parliament's conclusion and would cooperate with legal authorities if an investigation was launched.
She also defended the decision to bail out Bank Century, which she said was done to "protect the people and the economy from various fluctuations or crises."
"The steps taken and the truth upheld was the essential truth based on my authority. Of course, it is different from truth based on political choice or because of power," she said. "But in time, history will be the judge of the policy position taken at that time."
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