J. Soedradjad Djiwandono

Joseph Soedradjad Djiwandono
Born	(1938-08-07) August 7, 1938 Indonesia
Occupation	Economist
Known for	Governor of Bank Indonesia (1993–1998)

Joseph Soedradjad Djiwandono (born 7 August 1938) is an Indonesian economist who held the position of Governor at Bank Indonesia, the country's central bank, from 1993 until his removal in 1998.

He completed his undergraduate studies in economics at Gadjah Mada University in 1963 and obtained a doctorate from Boston University in 1980. Prior to his governorship, Djiwandono warned President Suharto about the significant accumulation of bad debt within the banking system.

Career

Before assuming leadership at Bank Indonesia, Djiwandono occupied several influential economic roles, including:

• Professor at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore
• Researcher at the Institute of Economics and Social Research within the Indonesian Institute of Sciences (LIPI)
• Lecturer and subsequently Emeritus Professor in the Economics Department at University of Indonesia
• Head of Bureau at the National Development Planning Agency (Bappenas)
• Special Assistant to the Minister of Trade
• Assistant Minister at the Coordinating Ministry for Economics, Trade and Industry
• Junior Minister for Trade

Asian financial crisis

Indonesia was affected by the 1997 Asian financial crisis by mid-1997. On 14 August, following the lead of Thailand and Malaysia, Bank Indonesia allowed the Indonesian rupiah to float. Under Djiwandono's leadership, this "market-oriented response" gained approval from investors but faced criticism for permitting rapid expansion in the banking sector, which saw 239 banks established by September 1997. In November, 16 banks were liquidated. Djiwandono justified restricting further closures, cautioning that additional liquidations might have resulted in a complete collapse of the banking system.

Suharto issued a decree on 11 February 1998 removing him from office but only informed him six days later. Although no formal explanation was provided, economists associated his ousting with his resistance to maintaining a fixed exchange rate for the rupiah. The decision attracted disapproval from both the International Monetary Fund and US President Bill Clinton, putting a US$43 billion aid package at risk. On 19 February, Syahril Sabirin succeeded him as Governor.

Career since leaving office

On 7 May 2002, Djiwandono was named as a suspect in investigations targeting former Bank Indonesia governors, accused of abusing authority by approving Rp19 trillion (US$2.1 billion) in loans to insolvent banks between 1996 and 1998. Prior to this, he had defended central bank policies against accusations from three former finance ministers concerning misuse of liquidity support during the crisis. He remained out of custody while inquiries into ex-governors continued.

Djiwandono continues to engage actively in Indonesia's public policy discussions, regularly contributing opinion pieces on economic matters, with a focus on monetary policy.

Personal life

Soedradjad practices Catholicism and is married to Bianti, daughter of renowned economist and policymaker Sumitro Djojohadikusumo. This union connects him to Sumitro’s sons: Prabowo Subianto, Indonesia’s eighth president, and Hashim Djojohadikusumo, an influential businessman. The couple has two sons: Thomas (born 1973) and Budi (born 1981).

His brother, J. Soedjati Djiwandono, also Catholic, passed away in 2013.

Publications

• Djiwandono, J. Soedradjad. (2000). Bank Indonesia and the Recent Crisis. Bulletin of Indonesian Economic Studies, 36(1), pp. 47–72.
• Djiwandono, J. Soedradjad. Bank Indonesia and the Crisis: An Insider's View. Institute of Southeast Asian Studies, Singapore, 2005. ISBN 978-981-230-308-0