The World Bank says Finance Minister Sri Mulyani Indrawati will fill her powerful new position on June 1. (Antara Photo)
On the surface, Finance Minister Sri Mulyani Indrawati’s appointment as managing director of the World Bank is Indonesia’s loss and the 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 macroeconomic fundamentals that allowed Indonesia to outperform other regional economies. Under her stewardship, Indonesia was one of only a handful of countries that registered positive growth during the global financial downturn.
More important, the outlook for the nation’s economy over the next few years looks extremely positive, one reason the Indonesian stock market have surged in the first quarter of the year. There will be concerns whether her successor can manage the macroeconomic ship just as well.
Her importance to Indonesia’s continued economic growth was illustrated by the fact that both the stock market and the rupiah weakened after her appointment was made public. Investors, however, can be confident that the fundamentals she has put in place will be maintained.
But perhaps Sri Mulyani’s lasting legacy will be her courage in taking on an entrenched bureaucracy within the Ministry of Finance by introducing sweeping reforms. She bravely closed down the customs office 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.
In this regard, her successor will have huge shoes to fill and it remains to be seen whether he or she will possess the same iron will as the outgoing minister of finance.
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: the House, Yudhoyono and Sri Mulyani herself.
Her integrity and reputation will serve her nation well on the global stage and in the corridors of power in Washington. Indonesia can be proud to have such a highly respected person in a job that carries enormous influence over the developing world.
She will bring a fresh perspective to the bank and its approach to providing aid to developing nations. We can also trust her to speak her mind and defend Indonesia’s interests whenever necessary.
Her appointment will definitely lift Indonesia’s reputation on the global stage but her drive, intelligence and courage will be missed at home.
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