Chances are big that Perry Warjiyo will become the next governor of Indonesia’s central bank (Bank Indonesia). On Wednesday (28/03) Warjiyo, the sole nominee of Indonesian President Joko Widodo to replace incumbent Bank Indonesia Governor Agus Martowardojo after the latter’s term ends in May 2018, appeared before the House of Representatives’ (DPR) financial commission for a “fit and proper” test.
On the same day the DPR’s financial commission announced it endorses Warjiyo’s nomination for the 2018-2023 term. All members of the commission, which consists of 36 members from ten factions, agreed to endorse Warjiyo (as well as Dody Budi Waluyo as Bank Indonesia’s new deputy governor). In early April 2018 the DPR will gather in a plenary session to appoint Warjiyo as next Bank Indonesia governor.
In front of the financial commission Warjiyo said he believes that safeguarding the nation’s financial stability, while boosting macroeconomic growth can go hand in hand. He suggests seven strategies to accomplish this:
- Strengthen Bank Indonesia’s monetary policies to safeguard low inflation and a stable rupiah exchange rate. Rupiah stability can be safeguarded by intervening in foreign currency markets and buying state bonds on the secondary market in times of turmoil.
- Strengthen coordination between local and central inflation monitoring teams (especially regarding food prices).
- Encourage the development of small and medium sized enterprises through prudent macroeconomic policies.
- Develop the digital economy and especially the use of digital payments as this should also lead to more efficient government spending.
- Encourage the development of Islamic banking, particularly by improving the local economies around pesantren.
- Improve coordination between Bank Indonesia and the central government, the Financial Services Authority (OJK), and Commission X of the DPR (which oversees finance and banking).
- Continue the process of transformation of Bank Indonesia that has been conducted by incumbent Governor Martowardojo, especially in the fields of human resources and the strengthening of the organization as well as more efficient spending.
Meanwhile, Warjiyo added that he sees three challenges for Indonesia in the foreseeable future. First, the issue of maintaining economic stability amid global financial uncertainty (currently being mainly related to US decision-making as well as other developed countries that are normalizing their monetary policies). Secondly, to accelerate economic growth to 6 percent year-on-year (y/y) in the next five years. The last challenge involves combining the 4th industrial revolution (Industry 4.0) and digital technology.
Background of Perry Warjiyo
Perry Warjiyo was born in Sukoharjo (Central Java) in 1959. After graduating from Gajah Mada University in Yogyakarta in 1982, he obtained his Master’s degree and PhD at Iowa University (United States) in the late-1980s and early 1990s, with a focus on monetary economics and international economics.
Warjiyo has been working at Indonesia’s central bank since 1984. Before becoming the central bank’s Deputy Governor, he served as assistant governor for monetary, macroprudential and international policies, and executive director of the economic research and monetary policy department. He left Bank Indonesia for two years in the late 2000s to serve as executive director of the International Monetary Fund (IMF), representing 13 member countries of the South-East Asia Voting Group.
Warjiyo is still a visiting lecturer at the big universities in Indonesia. He also enjoys writing articles and books about economics.
List of Bank Indonesia Governors:
|J. Soedradjad Djiwandono||1993-1998|