Sunday, May 23, 2010

Best Finance Minister Vs Vested Interests

Mulyani had been very effective at eradicating corruption in her rle as Finance Minister. She resigned from her position to join the World Bank. Was the "prickly vested interests" getting to her? She has taken a swipe at the forces she believes made her position untenable, describing them as rapacious and "just like the New Order" of the late dictator Suharto.

Sri Mulyani Indrawati's appointment as a Washington-based managing director at the World Bank shook Indonesian politics when it was announced a fortnight ago.

Dr Indrawati, widely regarded as incorruptible and the key architect of the reform process that President Susilo Bambang Yudhoyono hopes will be the legacy of his leadership, had since refused to explain the reasons for her resignation as minister.

However at a forum entitled Public Policy and Ethics, attended by the cream of Indonesia's progressive and intellectual elite, the US-educated economist let fly at forces which she said were involved in politics purely for personal gain.

Although she did not mention by name businessman Aburizal Bakrie, the chairman of junior coalition partner the Golkar party and the person appointed manager of coalition business within a day of Dr Indrawati's resignation, her reference to him was too pointed to miss.

``You yourselves can see, when government officials with business backgrounds, even though they say they have put aside all their businesses, but everyone knows that their siblings, their children, who knows who else from their families, are still running the firms,'' she said.

The reference was clearly intended to be to Mr Bakrie, whose family business Bumi Resources is the giant of the Indonesian stock exchange. Mr Bakrie was also coordinating minister for the economy, and then minister for people's welfare, in the first Yudhoyono government between 2004 and 2009, before retiring from representative politics to seize control of Golkar in a party room vote last year.

Mulyani, 47, will start June 1 as one of the Washington-based bank’s three managing directors, the highest rank under Zoellick.

She will replace Juan Jose Daboub, former minister of El Salvador, who will complete his four-year term June 30, overseeing 74 nations in Latin America, the Caribbean, East Asia and the Pacific, the Middle East and North Africa, the World Bank said.

Analysts said this was a good exit for Mulyani, who with Vice President Boediono, was the target of an opposition campaign accusing them of abusing their authority during the Rp 6.7 trillion (US$716 million) bailout of Bank Century in 2008.

Finance Asia: The World Bank got its hands on an experienced and talented new team member when it poached Mulyani Indrawati, Indonesia's reformist finance minister, earlier this month. But her departure also dealt a blow to Indonesia's efforts to combat corruption.

Indrawati's resignation on May 5 came as a surprise. She started a second term just last October and her progressive approach had helped to win the confidence of foreign investors and the international community in general -- though she was not always so popular at home.

Rival politicians, led by Aburizal Bakrie, had been calling for her head ever since the $730 million bailout of Bank Century in 2008. It is not clear what role this played in Indrawati's departure, but it seems likely to have been a big part of her decision to take the job at the World Bank. She starts on June 1.

The pressure is now on for President Susilo Bambang Yudhoyono to name a capable successor of the country's $650 billion economy. His choice will be used as a measure of the government's continued commitment to reform in the wake of Indrawati's departure. The deputy finance minister, Anggito Abimanyu, is widely regarded as the choice least likely to spook markets.

The worst result for investors would be a political appointment that would threaten to bring a halt to the ministry's market-led reform programme.

In total, 61% of our readers said that Indrawati's resignation represented a big step backwards for the country's reform programme, while 21% said it did not and 18% said that it could go either way.

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