http://arabnews.com/world/article25461.ece
Indonesia parliament set to back probe of reformers nullCONTENTIOUS ISSUE: A policeman holds his rifle during a rally by students outside the Parliament in Jakarta on Wednesday. (Reuters) 1 of 2 By SUNANDA CREAGH & OLIVIA RONDONUWU | REUTERS Published: Mar 3, 2010 3:09 PM Updated: Mar 3, 2010 11:33 PM JAKARTA: Indonesia's Parliament looks set to recommend a criminal investigation of two top reformers in President Susilo Bambang Yudhoyono's Cabinet over their part in a bank bailout, but neither is expected to lose their job. A noisy and at times disorderly parliamentary debate on Wednesday followed an inquiry into the $720 million rescue of Bank Century that offered two conflicting recommendations. One found the bank rescue was justified. The other called for Finance Minister Sri Mulyani Indrawati and Vice President Boediono to face criminal investigation for authorising the bailout in late 2008, at the height of the financial crisis. Jakarta-based political risk analyst Kevin O'Rourke said that under the rules, parliament could not compel the president to launch an investigation into his two top technocrats, even if the vote went against them. A majority of parties on Wednesday said they supported a legal probe. A formal vote was expected in the evening. Analysts say anti-reform elements both inside and outside Yudhoyono's ruling coalition have tried to use the inquiry to oust the two technocrats, but that it appeared the pair were safe even if Parliament backed a criminal probe.. Finance Minister Indrawati, who has pleased many foreign investors by cleaning up corruption but made enemies in the old business elite with her drive to boost tax collection, appeared unruffled when she faced reporters on Wednesday. "I have a lot of work to do," she said. Asked whether there had been capital flight as a result of the case, Indrawati said: "God willing that has not happened. Do not trigger it with unnecessary speculation." So far, Indonesian stocks, bonds and the rupiah have shown little reaction to the political infighting. But prolonged conflict over reforms could put that at risk and reverse some of the hefty gains of the past year. "If they did resign sentiment would be affected but I don't think there would be a sell-off in the bond markets as investors would look at other factors such as growth and inflation and whether the reform process will continue," said Handy Yunianto, a bond market strategist at Mandiri Sekuritas. Indonesia was one of the star emerging markets last year with stocks up 90 percent, government bonds up 20 percent and the rupiah, Asia's best-performing currency, up 17 percent. Many analysts say an upgrade of Indonesia's sovereign debt to investment grade is within reach in a couple of years. It has been widely tipped as the country most likely to join the "BRICs" -- Brazil, Russia, India and China -- in the select group of essential emerging markets investors cannot afford to ignore. Wednesday's debate underlined tensions between Yudhoyono's pro-market, pro-reform Democrat Party and his two main coalition partners -- the Golkar Party and Prosperous Justice Party (PKS), which both support a criminal investigation. The Democrat Party controls about a quarter of the 560 seats in Parliament and together with coalition partners about 75 percent. But the defection of key coalition members on this issue appears to have swung the balance in favor of the opposition. "That would indicate on paper that Yudhoyono will lose today if a vote takes place," said analyst O'Rourke. Security appeared tight outside parliament on Wednesday, with coils of razor wire protecting the building. A day earlier, as politicians shouted and argued inside, police outside fired tear gas and water cannon to try to disperse fractious crowds of opposing protesters. [Non-text portions of this message have been removed]
