Indef Wary of Govt's Financial System Reform Plan; Cites Turkey as Reference

TEMPO.CO, Jakarta - Institute for Development of Economics and Finance (Indef) economist, Aviliani, asked the government to review its plan to issue a government regulation in lieu of law (Perpu) on financial system reform as she fears such as law may cause a market turmoil. 

“What will happen is like what happened in Turkey, where they issued many regulations in lieu of laws, and the market saw instability in the government,” said Aviliani in a virtual discussion with Bisnis Indonesia on Tuesday, September 1. 

The financial system reform Perpu plans to reorganize the existence of the Deposit Insurance Agency, Financial Services Authority (OJK), and the Bank Indonesia (BI). This policy was taken as the global coronavirus pandemic forces the government to act outside of “normality” which includes laws and regulations. 

The Indef economist argues that the government should not always view emergency conditions by changing regulations meant to sustain the market’s stability. 

However, Aviliani said her stand on the issue does not mean that she agrees nor disagrees with the financial system reform regulation in lieu of law but is in fact questioning its purpose. 

“It’s not about being pro or against [the perpu] but rather what is its purpose,” said Aviliani who reminds the government to involve the state-institutions in the Perpu’s discussions if it does eventually get passed.

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FRANCISCA CHRISTY ROSANA