Burhanuddin Abdullah

Feb 6th, 2008, in Business & Economy, IM Posts, by

Corruption allegations against Bank Indonesia governor Burhanuddin Abdullah.

The governor of Bank Indonesia (BI) Burhanuddin Abdullah has recently come under investigation by the Corruption Eradication Commission (KPK) for alleged misappropriation of BI funds, along with two other BI officials, Legal Affairs Director Oey Hoeng/Hoey Tiong and the former head of the Communication Bureau Rusli Simanjuntak.

Burhanuddin Abdullah
Burhanuddin Abdullah.

KPK investigators allege that Burhanuddin was involved with the illegal transfer of 31 billion rupiah (around $3.4 million) of funds from the BI Banking Development Foundation, as a payoff to certain House of Representatives members, during deliberations on a revision of the Law on Finance in 2004.

As of 1st February Burhanuddin Abdullah, and the two other men, is no longer allowed to leave the country, pending completion of proceedings against him. [1]

In the past cases brought by the KPK against state officials have always ended in convictions and jailings. [2]

Of the case money market figure Yanuar Rizki worries that foreign investors will lose what confidence they might have in the Indonesian investment scene.

This is clearly going to affect the perceptions of foreign investors.

In most countries central banks are clearly separate from ordinary political interests and goings-on, Yanuar says, but in Indonesia

The central bank can be politicised.

The Indonesian money market was plagued by highly speculative movements of funds, and the lack of confidence in the central bank that the Burhanuddin Abdullah corruption case would add to, would only strengthen the speculative tendencies of investors, he said. [3]

Others however still have confidence in Burhanuddin Abdullah to lead the bank. Aviliani, a member of the Forum Masyarakat Statistik, says Burhanuddin has done a good job steering the Bank Indonesia ship and if Indonesia is to face a global recession in 2008 it needs the trustworthy and experienced hands of Abdullah at the helm still.

What's more, if BI were not led by Burhanuddin Abdullah, but by someone with no credibility, then foreign investors might take fright, he said. [4]

Burhanuddin Abdullah was sentenced to five years imprisonment on 29th October 2008 in a 4 to 1 judicial verdict. [5]


3 Comments on “Burhanuddin Abdullah”

  1. avatar Sputjam says:
    February 8th, 2008 at 12:17 am

    Initiate currency control and peg the rupiah to singapore or even better still the yuan to stabilise the rupiah. Instability will deter genuine long term investors.

  2. avatar Dragonwall says:
    February 12th, 2008 at 5:59 am

    Academic qualification does not proof the person is capable. Proven track records does. In this case is Burhannuddin and Gultom really has track record of leading Indonesia out of financial crisis?

    If they have then, that many banks will not fall into the hands of foreigners. On top of that, if a person who is suspected or have made payoffs to members in the MPR or DPR to approve certain laws in finance, then they should be considered to gross incompetent. You can’t just use money to get law approve.

    Law must be approve based on fact and current country’s condition. The same thing on what Yusril did where he was suspected of handing out envelopes to members of DPR MPR to get the Islamic Law approve.

    Those that collect envelope or payments to have law approve should be remove from Parliament or House of Representative for gross misconduct and abusing of authority.

    Persons carrying out such an act should be considered as abetting.

  3. avatar Sledet says:
    August 10th, 2008 at 12:23 am

    Jailing people will not give positive signs that the country is combating corruption when there are clearly facts that other important figures are doing it and that corruption is still rampant.



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