SBY political deal may be behind Mulyani’s exit

Rendi A. Witular and Arghea Desafti Hapsari, The Jakarta Post, Jakarta | Thu, 05/06/2010 10:04 AM

A breakfast meeting on Wednesday between Finance Minister Sri Mulyani Indrawati and her top echelon officials may reveal a different story behind the exit of the reform-minded minister from the Cabinet.

During the meeting, Mulyani said her acceptance of a prestigious job at the World Bank was not negotiable and was ordered by President Susilo Bambang Yudhoyono, according to officials attending the meeting.

Officials were puzzled upon seeing the World Bank letter confirming Mulyani’s appointment as a World Bank managing director effective June 1.

“She showed the letter to us and said she had been tasked by the President to serve with the World Bank,” said one of the officials.

“We understood later in the evening the minister had never applied for the job, and actually had no prior plan to resign. But she was told by the President on Monday to take it.”

Another official said Yudhoyono called World Bank president Robert Zoellick on Friday, offering him to take aboard Mulyani, but without consulting her prior.

Mulyani refused to comment on the issue.

But as her departure is deemed sudden, speculation is rife that Yudhoyono may have intentionally forced Mulyani to resign over seemingly endless political bickering stemming from vested interests.

Yudhoyono announced Wednesday he had approved Mulyani’s request for the job upon receiving her resignation the same day.

Mulyani’s departure seems to verify The Jakarta Post’s report published earlier this year that Yudhyono planned to replace Mulyani following pressure from Golkar Party chairman Aburizal Bakrie.

Aburizal, who is the patron of the influential Bakrie Group, is known to have personal issues with Mulyani and her aggressive reform programs.

Legislators, spearheaded by Golkar, have for the last eight months vied to oust Mulyani and Vice President Boediono over their role in bailing out Bank Century during the height of the global financial meltdown in 2008.

Politicians have accused Mulyani and Boediono of recklessness in the ballooning bailout worth Rp 6.76 trillion (US$716 million).

The Bank Century debacle has become a protracted political hassle within Yudhoyono’s coalition, with politicians demanding the dismissal of Boediono and Mulyani.

“Mulyani’s exit from the Cabinet may suggest a compromise between Yudhoyono and Aburizal,” said political analyst Yudi Latief of the Reform Institute.

He said the political deal might not be limited to the Bank Century case but to the wider interest of keeping the Bakrie business group free from any obstructions.

Senior Golkar politician Ade Komaruddin dismissed allegations that Aburizal and Golkar had played a role in Mulyani’s departure.

Political analyst Arbi Sanit believed Yudhoyono might have actually engineered Mulyani’s exit to ensure political stability.

“It’s an exit strategy that makes everyone happy. Mulyani will not lose face as she will get a prestigious job, Yudhoyono can now fix the battered coalition, and investors can do business peacefully without being confronted by political bickering,” he said.

Aside from keeping the coalition intact, analysts have also suggested Mulyani ousting’s may be related with her stiff reform program in rooting out graft at the tax and customs offices, and keeping the state budget’s management free from vested interests.

Mulyani’s measures faced strong opposition, especially from corrupt bureaucrats, businessmen and politicians, many of whom are close to Yudhoyono.

Mulyani once tendered her resignation in late 2008 after Yudhoyono over-ruled her decision not to shut the stock market to prevent shares of Bakrie-related companies from plunging in value.

Yudhoyono, however, denied the resignation.

Who will benefit from Mulyani’s departure?

1. Golkar Party chairman Aburizal Bakrie. Mulyani said in an interview with The Wall Street Journal in mid January, she believed her past actions had offended Aburizal.
2. Former tax chief Hadi Purnomo (now chairman of the Supreme Audit Agency). Hadi remains an influential figure at the tax office with numerous disciples despite being sacked by Mulyani in mid 2006. Hadi was reportedly furious over his dismissal.
3. Smugglers. A business group close with the police and military may have financed street rallies against Mulyani after its illicit businesses were interrupted by Mulyani’s reform program.
4. Islamic parties (PKS, PAN, PPP). Several lawmakers were reportedly resented Mulyani’s refusal to contribute to the recent general election.
5. Mining companies: because of tax problems related to unpaid value-added tax.
6. Companies linked to SBY’s inner-circle: Several companies have been netted by Mulyani in tax dodging cases.

Source: The Jakarta Post