Gde Anugrah Arka, Jakarta – Indonesia's floundering president has sacked the widely respected head of the bank restructuring agency (IBRA), in yet another shakeup at one of the troubled country's most vital institutions.

The sacking – slammed by analysts – caps the latest shuffling of economic posts by President Abdurrahman Wahid, desperately seeking ways to avoid impeachment in August but sowing mainly confusion with his frequent personnel changes.

I Putu Gde Ary Suta was sworn in on Monday to replace Edwin Gerungan, who some analysts said fell foul of powerful political forces by opposing controversial debt restructuring deals. Ary Suta was chief of the capital market watchdog Bapepam from 1995-1998 and a senior official at the Finance Ministry before taking up the new post.

Financial analysts have had little positive to say about yet another change at the head of IBRA. He will be IBRA's fourth head in 18 months, changes that have disrupted its job of reviving Indonesia's broken bank sector and selling off assets worth 600 trillion rupiah ($52.8 billion) it took over during the Asian economic crisis of the late 1990s. "We'll do our best to speed up restructuring," Ary Suta told reporters at the swearing-in ceremony.

A palace source said Wahid, who left for a visit to Australia on Sunday, signed the order to sack Gerungan over the weekend. The former Jakarta-based Citibank vice president told Reuters he had not quit of his own accord but declined to give any further details.

His sacking comes days after Finance Minister Rizal Ramli said IBRA's management needed to be improved. Ramli told reporters on Monday that IBRA must accelerate asset sales and make sure they did not lose their value.

Political meddling

Economists said that while Gerungan might have been a bit slow to push through deals, he brought unrivaled integrity to an agency under constant pressure from political meddling because of the wealth it controls. "I really respected Edwin Gerungan because he managed to steer away from the controversy and scandal which plagued IBRA under previous chairmen," said Lin Che Wei, head of research at SG Securities in Jakarta. "His departure will be a major blow to IBRA because it is very difficult to find people with a squeaky clean reputation like his," he told Reuters.

One senior Western economist who declined to be identified speculated Gerungan's dismissal was linked to his dislike of political interference in controversial debt restructuring deals. "Clearly there is a lot more going on behind the scenes than any of us know, which led to this," the economist said.

Wahid is visiting Australia and other countries this week even though he faces an impeachment hearing in just over a month for a tumultuous and widely-criticised 20 months in power. While analysts have condemned the sacking of Gerungan, financial markets have barely blinked, focused primarily on Wahid's increasingly shaky political future.

IBRA is meant to sell the assets it controls so the cash-strapped government can plug a gaping budget deficit while the private sector gets back in business.

More changes on the way

Finance Minister Ramli cast doubt over Gerungan's future last week, not long after being moved from the chief economics post, where he repeatedly crossed swords with the International Monetary Fund over key financial reforms. IBRA falls under the control of the Finance Ministry. Ramli's criticism of IBRA has coincided with speculation he would soon replace most of the key officials at his ministry.

Dasa Sutantio, a senior IBRA official, denied the dismissal of Gerungan would affect IBRA's tasks. "Maybe from an emotional point of view [it will have an impact] but from a technical point of view ... restructuring or [asset] disposal is not going to stop just because there is a new boss," Sutantio told Reuters. Sutantio added IBRA's 27 trillion rupiah revenue target for this year, which Gerungan said in May was too high, could be met. Gerungan's appointment last November had been applauded. But IBRA has come under constant attack for moving too slowly to resolve the huge problems facing the shattered banking sector, giving the enemies of Wahid more ammunition to attack him.