Finance Minister Sri Mulyani Indrawati’s appointment as managing
director of the World Bank is Indonesia’s loss and the World Bank’s
gain. A fearless reformer and highly respected economist, Sri Mulyani
has been a central member of President Susilo Bambang Yudhoyono’s
cabinet for the past five years.
She has been largely responsible for putting in place the
macro-economic fundamentals that have allowed Indonesia to outperform
other regional economies in recent years. Under her stewardship,
Indonesia was one of only a handful of countries that registered
positive growth during the financial crisis of 2008 and 2009.
More importantly the outlook for the Indonesian economy looks extremely
positive, which is one reason why the Indonesian stock market and the
rupiah performed so well in the first quarter of 2010. With her new
appointment, there will be concerns about whether her successor can
manage the ship just as expertly.
But perhaps Sri Mulyani’s lasting legacy will be her courage to take on
an entrenched bureaucracy within the Ministry of Finance by introducing
sweeping reforms. She bravely closed down the customs department to
stop widespread corruption in the nation’s ports, a move that earned
her respect and derision in equal measure.
Just this week, she has vowed to go after tax officials and major tax
dodgers in another attempt to sweep the Directorate of Taxation clean
after recent high profile corruption cases involving the department. In
this regard, her successor will have huge shoes to fill and it remains
to be seen whether he or she will posses the same iron will as the
But given her fraught relationship with the House of Representatives
over the Bank Century scandal, perhaps her appointment is the best face
saving outcome for all sides: politicians, the president and Sri
Mulyani herself. Her appointment to the second most senior job at the
World Bank will definitely lift Indonesia’s reputation on the global
stage but her drive, intelligence and courage will be missed at home.