Name J. Djiwandono Siblings J. Soedjati Djiwandono Parents Thomas Sastro Djiwandono | Spouse Bianti Djiwandono | |
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Children Tommy Djiwandono, G. Budi Satrio Djiwandono | ||
Joseph Soedradjad Djiwandono (born 7 August 1938 in Yogyakarta) was the Governor of Bank Indonesia, the nation's central bank, from 1993 until his sudden dismissal in 1998.
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Djiwandono received his bachelor's degree in economics from the Gadjah Mada University in 1963 and went on to receive a Ph.D. from Boston University in 1980. Prior to accepting the position as Governor of Bank Indonesia in 1993, Djiwandono had expressed his concerns on the high number of bad debts in the banking sector to President Suharto.
Career
Soedradjad Djiwandono held a wide range of economic positions, both outside of and within government, before becoming Governor of Bank Indonesia in 1933. His main positions included the following:
Asian Financial Crisis
The Asian Financial Crisis began to affect Indonesia by mid-1997. On 14 August, Bank Indonesia followed Thailand and Malaysia and moved to float the Indonesian rupiah. Under Djiwandono, the bank's "market-oriented response" to the crisis was praised by investors. However, it was also criticized for allowing Indonesia's banking system to grow too fast with 239 banks in establishment by September 1997. Of these banks, 16 were liquidated in November. Djiwandono later defended the decision not to close more banks citing concerns that "had more banks been liquidated, a total collapse [of the banking sector] may have resulted".
He was dismissed from office by Suharto's 11 February 1998 presidential decree but was not officially informed of the decision until six days later. Although no reason was given, economists believed Djiwandono's opposition to a new fixed exchange rate system for the rupiah contributed to the decision for his dismissal. The decision drew criticism from the International Monetary Fund and United States President Bill Clinton and placed a US$43 billion aid package at risk of being reversed. He was succeeded by Syahril Sabirin in a transfer ceremony on 19 February.
Career since leaving office
On 7 May 2002, Djiwandono was named a suspect in the investigation of former Bank Indonesia governors. He was charged with abuse of authority by extending Rp19 trillion (US$2.1 billion) in loans to failing banks between 1996 and 1998. Several years earlier, Djiwandono had defended the central bank's policies from allegations by three former finance ministers that it misunderstood the government's policies and improperly used the liquidity assistance program during the financial crisis. He remained free while various investigations of the approach of former Bank Indonesia governors was undertaken.
Djiwandono continues to contribute to public policy debate, especially in Indonesia, by writing articles including op-ed pieces about current economic issues, particularly about matters involving monetary policy.
Djiwandono is married to Bianti, daughter of one of Indonesia's most well-known economists and policy-makers Sumitro Djojohadikusumo. He is thus connected by marriage to two of Sumitro's sons, Prabowo Subianto who stood for the Presidency of Indonesia in 2014, and Hashim Djojohadikusumo, a prominent business figure in Indonesia.