WHO IS SUCCESSOR AT THE MINISTRY OF FINANCE?

The vacant position the Minister of Finance drew attention of many circles who urge President SBY to immediately appoint a definite Minister of Finance. Firmly the Parliament insisted that the office of Acting Finance Minister lasted not any longer than one month. If the Acting Minister could not make any decision, it was feared that it would hold back the development process as a whole considering the strategic post of the Minister of Finance.

               

In the eyes of the Parliament, the appointment of Coordinating Minister of Economy Hatta Rajasa as Acting Minister of Finance was acceptable; but for not any longer than one month because if the post were held by the acting Minister, it would interrupt his performance.

               

It was noteworthy that the case of vacant office of the Ministry of Finance was a potential polemics; rumors had it that Acting Finance Minister Hatta Radjasa had Presidential authority to take strategic decisions at the Ministry of Finance.

The Parliament was expecting that President SBY would take this case into serious consideration. If it was left to drag on it could endanger the effectiveness and good governance of the SBY administration. The House even bluntly questioned why the President did not instantly appoint a definitive Minister of Finance. A definitive Minister of Finance was of utmost importance because he had to make important decisions or make new Regulations of the Ministry of Finance or Finalize regulations still in process.

In case of Acting Minister, he had no authority to make strategic decisions. If the acting Minister dared to make strategic decisions, the Parliament would take action; the reason was that only the definitive Minister of Finance could make strategic decision.

To simulate, House had asked President SBY to immediately appoint a definitive Minister of Finance before discussing budget matters with House. This was important because it was a matter of inter-institutional relationship. According to House, only the definitive Minister could represent the President in the process of Budget Planning or Budget revision with House. The authority could not be delegated; meanwhile the case of acting Minister of Finance would be dealt with the legal way.

In Law no. 17 2013 on State Finance Article 6 paragraph 1 it was mentioned that the President as Head of Government commanded state’s financial management as part of Government’s authority. And in Paragraph 2 point a it was mentioned that authority of state finance management was delegated to the Ministry of Finance as fiscal Manager and Representative of the Government. Meaning, the status of Acting Minister was not regulated by the Law. The legal base was weak; therefore a definitive Ministry of Finance was indispensable.

 

According to the politicians in House, supposedly it was not difficult for the President to appoint a definitive Ministry of Finance. Supposedly by the time President SBY proposed Agus Martowardjo as candidate of Governor of Bank Indonesia, the President already had in mind who the successor was going to be.

Succession of Agus as Ministry of Finance based on Decree of President SBY no 44/M/2013 signed on April 17, 2013. By that decree President SBY expressed his appreciation and gratitude to Agus Martowardjo for his service and dedication while holding the office as Minister.

The appointment of Hatta Rajasa as Acting Minister of Finance was written in Presidential Decree no 45/M/2013 signed by President SBY effective on the day of issuance, in which the Keppress authorized Hatta as executor of duties.

About the reasoning why Hatta was appointed as Acting Minister, Presidential spokesperson Julian Aldrin Pasha stated that the Coordinating Minister in Economy was rated by President as the right figure to hold the office. So far, as coordinating Minister Hatta regulated, and commanded over the knowledge of all affairs at the Ministry. The decision was based on the consideration that the position was only temporary and therefore Mr. Hatta was regarded as the right person to undertake the duty as Finance Minister.

About some political suspicion by some political parties outside the coalition that the appointment of Hatta was probably because he was the chairman of a certain political party, it was rated as irrelevant because the holding of office was only temporary. But just because it was temporary, the Parliament expected that the President immediately appoint a definitive Finance Minister.

It was noteworthy that as Acting Minister, Hatta assured there shall be no drastic change as long as he was in office. He assured that the policy made by Agus Marto would be certain tasks to be prioritized. For example budget spending in ministries and institutions must run smoothly. Also some problems such as deficit budget in the oil gas sector and lowered export must be overcome.

Hatta also disclosed some challenges he had to face in doing his duties as acting Finance Minister. One of them was budget absorption by ministries and institutions. Hatta said that to speed up settlement of documents of budget liquidation would be the Ministry’s focus of attention in the future.

According to Hatta the ministry of Finance must actively coordinate with ministries to troubleshoot the problems, this is to avoid the application of “astrology” in management, i.e. the need for signatures in certain expenditure posts which could not be passed unless signed.

One of the astrology problems that recently emerged was the stagnated fund of the Ministry Defense at the Ministry of Finance. The Ministry of Defense was unable to liquidate fund of Rp 678 billion because the budget was frozen until further notice. Based on Letter of The Ministry of Finance no S-2133/AG/2012 the fund was given a sign of star at House, which means that it could not be liquidated until further notice.

Furthermore another homework left by Agus was policy related to financing of the megaproject of the strategic zone at the Sunda Straits Bridge [KSIS]. This Java-Sumatra bridge [JSS] which was public highlight was included in the megaproject. This was interesting because once the megaproject triggered different opinion between Hatta and Agus in regard to initial project financing i.e.feasibility study.

Agus wished the Government participated in the financing of the feasibility study. He wished there was a portion of Government budget in it. This was to make sure that the feasibility study was carried out in the spirit of Good Governance and be accountable.

Unlike Agus, Hatta Rajasa wished that 100% of the financing be burdened on the private sector, so as not to burden state budget. However, Hatta would not tinker around with the proposal; it would be best to leave it to the definite Minister of Finance who would continue the task until the end of the Cabinet’s office.

To keep the market from responding negatively to the vacant chair, it would be most advisable for President SBY to appoint a definite Finance Minister to cool down speculations which tend to be negative. (SS)   

Business News - May 01,2013