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Boediono: I face a massive political machine

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19 October 2018 20:38 WIB

Vice President Boediono. Tempo/Aditia Noviansyah

TEMPO.CO, Jakarta - Vice President Boediono appeared relaxed, lunching on a simple, vegetarian meal, two Saturdays ago, when Tempo met him at his home. Clad in an informal red-checked shirt, he was far from the usual image of officialdom. But his trait of not speaking much, preferring to listen instead, had not changed.

Boediono never saw the need to communicate exclusively with the media. "But it turns out I was wrong," he admitted. There has been nothing positive on his recent five years in office. Instead, he has been bombarded by prejudicial viewpoints and insinuations on his role as the central bank governor in the Bank Century -today known as Bank Mutiara- bailout case. 

The case has entered a new stage, as Budi Mulya, the deputy central bank governor during the time of the bailout, goes to court. Budi is charged with accepting Rp 2 billion from Robert Tantular, the former owner of Bank Century. The Corruption Eradication Commission (KPK) prosecutor has also charged him and other members of the Bank Indonesia governing board of incurring a Rp 6.7 trillion loss to the state as a result of the Bank Century bailout.

Boediono was interviewed by Tempo reporters M. Taufiqurohman, Widiarsi Agustina, Anton Septian and Sorta Tobing, at his official residence in Central Jakarta. Excerpts:

You seem to adopt a passive attitude in the face of charges on the Bank Century case.

To be honest, I'm faced with a difficult choice. I have tried to explain to the House of Representatives (DPR) as well as the KPK, and through the media, what happened. That attempt failed.

What was the problem?

I face a massive political machinery, well-funded, its own stage and an influential media at its disposal. Meanwhile, I must continue to do my daily work as vice president. All I wanted was to spend my time doing my work, hoping that all the hoopla would recede in time. Alas, that hope remains just a hope.

The KPK charges that the Bank Century bailout cost the state a loss of Rp6.7 trillion.

If I have to explain the Bank Century case in detail, it would take a long time. Essentially, our finances went berserk around September 2008. Three state-owned banks faced liquidity problems but they got a Rp15 trillion fund injection from the government. But those experiencing the most difficulties were the mid-level and small banks. There were strong rumors then that a number of banks were having problems. Loans were unpaid and we were worried the problem would expand and get worse.

What was Bank Indonesia's position at that time?

That the banks should not be allowed to fail, because the impact would be deep, like in 1997-98. In November 1997 a number of small banks closed down and the impact was near-fatal. Depositors raced to withdraw their savings before their respective banks closed their doors. This situation went on until a blanket guarantee was issued in April 1998. But in 2008, the government rejected the suggestion of a blanket guarantee.

What was the basis for changing the short-term funding for Bank Century?

That policy was not intended to benefit one bank only but to ensure no banks would fall. This failed. However, in the process, it was clear that short-term funding would not be enough. Meanwhile the attempt to attract investors failed. Finally, that bank was taken over by the Savings Guarantee Board (LPS).

What do you think of the charges against Budi Mulya who dragged in your name?

The legal process is currently underway. It's not my place to comment to the media about this, especially since I'm not a legal expert.

If you knew that the bailout had an ulterior personal motive, would you still have approved it?

I didn't know there was personal interest or that someone had an ulterior motive in the policy. I have repeatedly said that whoever took advantage of that policy to break the law, for one's own personal or any other benefit, must be punished.

Did you regret having agreed to be the central bank governor?

(Laughing) I had only been in my job for a few months when the 2008 crisis exploded. Bank Century has a history of bad management. But its bailout at that time could not be avoided. I backed the LPS and the state 1,000 percent in going after whoever was responsible for the fall of Bank Century to the ends of the earth.

Has your work as vice president been affected by the case?

There was no honeymoon at all. The ups and downs of Bank Century happened throughout my five years as vice president. But I've proven that I can still work and assist the president in spite of it all. I would be lying if I said it didn't affect me. But I'm very much aware that this is the consequence of holding a political position, a target of politicians. My background is a professor, with no party background, so yes, I became a soft political target. (*)



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