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the controversial Bank Century bailout


INDONESIAN politics was in uproar yesterday after a parliamentary vote on the controversial Bank Century bailout revealed almost all support had ebbed from President Susilo Bambang Yudhoyono's ruling coalition. After a marathon sitting, the house declared by 325 votes to 212 on Wednesday night that last year's 6.7 trillion rupiah (about $800 million) bailout was illegal. Dr Yudhoyono's Democrat Party and the uninfluential National Mandate Party of former "reformasi" hero Amien Rais had been the only ones pushing a resolution backing the bank rescue deal. However, despite wild fisticuffs on the floor of the house preceding the decision, and a sense of gloom pervading analysts' views of it yesterday, there were also warnings that the development was "entirely meaningless" ."This has no legal import whatsoever, and is simply an argument that the people in the (parliament) are having with themselves," said Australian academic and Indonesia law specialist Tim Lindsey. "(The process) is not affecting (Dr Yudhoyono's) popularity at all."

The President was due to address the nation late last night with an assessment of the resolution, which came after almost four months of parliamentary hearings into the rescue.Dr Yudhoyono is unlikely to take any significant action against those coalition members who sided against his Democrats, as voting on the floor of the Indonesian parliament is not restricted along party lines. And any formal split in the ruling coalition would be largely symbolic, as voting on significant future legislation would come down to individual members' preferences.

The vote could signal a turning point in Dr Yudhoyono's ability to dictate government on his own terms, with a largely technocratic cabinet not overly restricted by coalition member demands.The long-running Bank Century probe had turned its spotlight squarely on Vice-President Boediono, who was Reserve Bank governor when the bailout decision was taken, and on Finance Minister Sri Mulyani Indrawati.

Although the bank was a second-string financial institution, its failure could have sent the system into freefall, they and others told the inquiry.There is a distant possibility the vote could now prompt criminal investigations against these two, although the Corruption Eradication Commission -- the body which would prosecute such a matter -- has given no indication that it plans to focus on them.

There are also calls for Dr Indrawati to be stood aside, and for Professor Boediono to be impeached. However, the latter course is extremely unlikely, as it would have to be endorsed by the Constitutional Court.Professor Lindsey warned that sacrificing Professor Boediono or Dr Indrawati would be "catastrophic" , leading to a sharp decline in foreign investor confidence and indicating Dr Yudhoyono was in thrall to coalition demands
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