Wahid defends new IBRA chief

Wahid was questioned about the IBRA move during a Tuesday press conference with Australian leader John Howard

By staff and wire reports

SYDNEY, Australia -- Indonesian president Abdurrahman Wahid on Tuesday defended his new head of the troubled bank restructuring agency IBRA as a man of vision and leadership.

Wahid appointed I Putu Gde Ary Suta on Monday after sacking Edwin Gerungan, a former Citibank vice-president who was appointed only last November.

Ary Suta, a former head of the government's capital markets regulator Bapepam, is the sixth man to head IBRA, which has the job of restructuring Indonesia's banks and selling assets it acquired during the Asian financial crisis.

Speaking to reporters during a visit to Australia Tuesday, Wahid said that in Ary Suta he had now "put in a man with vision and the ability to lead".

Gerungan's sacking was criticized by some analysts, who said it appeared his opposition to some debt restructuring deals had put him in conflict with powerful political forces.

Wahid's own future is in doubt. He faces likely impeachment in August at the hands of the Indonesian parliament.

Aim to speed up restructuring

Ary Suta was Bapepam chief from 1995-1998 and a senior official at the Finance Ministry before taking up the IBRA post.

"We'll do our best to speed up restructuring," Ary Suta told reporters at the swearing-in ceremony.

Gerungan's sacking comes days after Finance Minister Rizal Ramli said IBRA's management needed to be improved. Ramli told reporters on Monday that IBRA must accelerate asset sales and make sure they did not lose their value.

Economists said that while Gerungan might have been a bit slow to push through deals, he brought unrivaled integrity to an agency under constant pressure from political meddling because of the wealth it controls.

"I really respected Edwin Gerungan because he managed to steer away from the controversy and scandal which plagued IBRA under previous chairmen," said Lin Che Wei, head of research at SG Securities in Jakarta.

Gerungan's departure a blow

"His departure will be a major blow to IBRA because it is very difficult to find people with a squeaky clean reputation like his," he told Reuters.

IBRA is meant to sell the assets it controls so the cash-strapped government can plug a gaping budget deficit while the private sector gets back in business.

But IBRA has come under constant attack for moving too slowly to resolve the huge problems facing the shattered banking sector, giving the enemies of Wahid more ammunition to attack him.

Reuters contributed to this report.