Indrawati's departure spells trouble for Indonesian reforms

The resignation this month of Indonesia's reform-minded finance minister is a setback for the country's fight against corruption, FinanceAsia readers say.
Mulyani Indrawati
Mulyani Indrawati

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, according to respondents to our web poll last week.

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.

Photo by AFP.

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