Sri Mulyani Indrawati: Woman of the century

“She could be the finance minister anywhere in the world,” says James Castle, founder of the consultancy Castle Asia. “She’s that good”.

JP/Arief Suhardiman
JP/Arief Suhardiman

Castle told that to Newsweek magazine last year on Indonesia’s outgoing finance minister Sri Mulyani Indrawati. She is stepping down from her post, which she had held since 2005, to join the top ranks of the  World Bank under its president Robert Zoellick.

President Susilo Bambang Yu-dhoyono approved of her resignation to work for the World Bank.

In a televised statement Yudho-yono on the departure of Mulyani, who was crowned as the best finance minister in Asia by Emerging Market Forum and finance minister of the year in the world by EuroMoney in 2006, said her departure was “a big loss”.

He said he would ensure however that her successor would carry on the financial and tax reforms she had initiated during her tenure.

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.

“The appointment is like a win-win solution,” said Purbaya Yudhi Sadewa, an economist at the Danareksa Research Institute in Jakarta. The new job can help Sri Mulyani save face. “She has been facing a lot of political pressure,” he said as quoted by Bloomberg.

Mulyani’s support for the decision to bail out Bank Century in 2008 in order to avert a wider systemic banking and financial crisis was the subject of a highly politicized parliamentary inquiry. The Corruption Eradication Commission is currently investigating the case and has questioned Mulyani on her policy decision.

Legislators had proposed to remove Mulyani from her official duties during any investigation or legal process. The government refused this proposal.

However, apart from the Century saga, her work in dismantling the structure of crony capitalism built during Soeharto’s authoritarian regime, slashing public and private debt, and spearheading sweeping reforms in customs and tax administration is testament to her outstanding achievements in the field of Indonesian economic reform.

During Mulyani’s time as finance minister, Southeast Asia’s largest economy has become a member of the group of 20 leading economies and one of the fastest growing in the region.

Fitch upgraded the country to “BB+”, a notch below investment grade, in January 2010 primarily in recognition of the improvements to sovereign credit-worthiness arising from improved fiscal policy discipline and falling debt ratios. Indonesia is expected to achieve the coveted investment grade within a couple of years to be on par with the emerging market elite of Brazil, Russia, India and China, known as the BRIC nations.

The World Bank said that Mulyani had navigated successfully in the midst of the global economic crisis.

“She has been an outstanding finance minister, with in-depth knowledge of both development issues and the role of the World Bank Group,” Zoellick stated in a press release.

Mulyani, born in 1962 in Tanjung Karang, Lampung, completed her doctorate in economics from the University of Illinois. She has been an avid fighter for Indonesia’s economic reform since the days following the 1997 Asian economic crisis. She was then the head of the University of Indonesia’s Institute for Economics and Social Research (LPEM UI).

Together with 13 other young economists, including Mari Elka Pangestu (now trade minister), Miranda S. Goeltom (former senior deputy governor of Bank Indonesia), and Anggito Abimanyu (now the Finance Ministry’s head of fiscal policy), they presented the Declaration for Saving Indonesia’s Economy.

Mulyani and Anggito later became the members of president Abdurrahman Wahid’s economic advisory team. Wahid’s presidency lasted less than a year and ended in July 2001 with the rise of president Megawati Soekarnoputri.

When rumors spread on Mul-yani’s candidacy in the new cabinet, she silenced them by heading to Atlanta in the US, to work as a consultant for the US Agency for International Development. In October 2002, she was appointed as the executive director of the International Monetary Fund to represent the Southeast Asian countries in its Washington, DC headquarters.

Indonesia’s next president, Susilo Bambang Yudhoyono, came to power in October 2004 and managed to lure her back as the state minister for national development planning.

A year later, in 2005, during a cabinet reshuffle, Mulyani was made the head of the Finance Ministry.

Mulyani in an interview said that as finance minister the goal of government economic policies was for people “to develop, be prosperous, get enough income, be able to meet all their needs from the day they were born until the day they die: education, food, health, recreation, all at affordable levels”.

Prodita Sabarini, The Jakarta Post, Jakarta | People | Thu, May 06 2010

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