Economy may be hurt by Century debate : economist

Indonesia should be cautious to the ongoing political debate on Bank Century's bailout that may eventually hurt the economy if it remains unsolved, Bank Mandiri economist Mirza Adityaswara said.

"Investors may go seeing higher economic growth prospect in other countries, while this country is still busy focusing on politics when the election was finished six months ago," he said Monday in a seminar on Indonesia's economic outlook held by the Indonesian Economic Graduates Institution (ISEI).

The economy may have a growth of below 5.5 percent in 2010, as expected by the government, if political conditions keep fluctuating, he said.

Century (now rebranded as Bank Mutiara) was saved in November 2008, costing the state Deposit Insurance Corporation (LPS) Rp 6.76 trillion (US$ 710 million) of funds in total.

The government saved the bank to protect the financial sector from a systemic threat, Finance Minister Sri Mulyani Indrawati said. But lawmakers, suspecting there might be other motives, established an inquiry team to investigate the bailout.

Mulyani, who decided the bailout as the chairman of the now-defunct Financial System Stability Committee (KSSK), will be summoned by lawmakers on Jan. 4 next year.

Source : http://www.thejakartapost.com