http://www.asiasentinel.com/index.php?option=com_content&task=view&id=2191&Itemid=175
Indonesian Reform at Stake in Bank Century Battle
Written by Our Correspondent
Thursday, 10 December 2009
Finance minister accuses Bakrie of trying to oust her
The woman who is perhaps the most respected member of Indonesian
President Susilo Bambang Yudhoyono's cabinet has turned a battle over a 2008
bank bailout into a very public scrap with one of the country's richest and
most powerful men.
At stake may be the future, not just of Finance Minister Sri Mulyani
Indrawati's tenure in the cabinet but broader efforts to reform the way
Indonesia does business.
Sri Mulyani, who is highly regarded by investors as a symbol of change
and open government, told the Wall Street Journal Thursday that Aburizal
Bakrie, a mining tycoon who is also chairman of the Golkar Party, is unhappy
with her efforts to reform the country's notoriously corrupt bureaucracy and
that his political party is trying to oust her from government.
She said Bakrie and his allies in the House of Representatives (DPR) were
behind an effort to unseat her by manipulating a pending probe into the $710
million government bailout of Bank Century in November 2008.
Following the interview's publication, Golkar officials denied targeting
the finance minister. Bakrie did not comment.
The bailout, Sri Mulyani told the newspaper, was necessary to save the
bank's collapse from creating a panic that could have undermined the banking
system. "I felt like what I did was the right thing for the country," she told
the Journal.
Sri Mulyani and Vice President Boediono, who was central bank governor at
the time of the bailout, both approved the measure. They have recently been
targets of critics who say the money was misused and that the action itself may
have been illegal.
Boediono has also defended the action as necessary.
Sri Mulyani's potshots at Bakrie in the interview seem to have raised the
stakes in the matter considerably. They follow weeks of speculation here that
either she or Boediono or both will be sacrificed for political expediency.
Rumors abound that Bakrie himself is hoping to gain the vice presidency if
Boediono is ousted.
Sri Mulyani said she has been at odds with Bakrie since the stock market
here plummeted in 2008 after a run on Bakrie-affiliated shares that made up
one-third of the bourse's value. Trading at the time was halted for several
days, something she opposed.
She told the Journal that Bakrie himself ordered the closure of the
exchange, a move he would not have had the legal authority to carry out.
Now Bakrie's Golkar Party, which is loosely allied with Yudhoyono and
ruled the country for years when the former dictator Suharto was in power, is
leading the DPR investigation into the Bank Century affair. Sri Mulyani says it
is all about pay back.
"Aburizal Bakrie is not happy with me," she told the Journal. "I'm not
expecting anyone in Golkar will be fair or kind to me" during the probe.
The fight could determine the course of reform in Indonesia and the two
figures could hardly be more different.
Bakrie is a classic shadow warrior who wields power in the dark corners
of the country's opaque business and regulatory environment. He moves in and
out of government - he was in Yudhoyono's first cabinet - and seems to use his
considerable official influence to aid his many companies, including the
country's largest coal mining outfit.
Sri Mulyani, a one-time International Monetary Fund official and
university professor, is widely credited with steering the country
successfully through the current global economic slowdown, paying down the
public debt and trying to weed out widespread corruption.
Left to sort out the mess is Yudhoyono, who in many ways represents both
sides of the struggle. Having come from the military under former dictator
Suharto, Yudhoyono survived and prospered in the shadows of what was called the
New Order. His wife, who is said to wield considerable power herself behind the
scenes, is the daughter of one of Suharto's key military allies from the days
when he seized power in 1967 following a massive bloodletting that targeted the
country's once powerful communist movement.
But Yudhoyono has also embraced the idea that Indonesia should be a
modern power, a member of the G20 and an emerging democratic model. He has won
the presidency twice on a platform of battling corruption - and Sri Mulyani is
often pointed to as one of the symbols of the change Yudhoyono professes to
believe in.
The confrontation between Bakrie and Sri Mulyani, who is also known for
her toughness and determination, comes as the president has seen the beginning
of his second term in office marred by various scandals, among them an attempt
by police to derail the country's anti-graft agency and allegations that the
Bank Century bailout money may have been used by his own political party.
He has been widely criticized for not being decisive in tackling
corruption and for being too willing to compromise. Nationwide demonstrations
Wednesday called for tougher action against corruption. Some demonstrators also
accused Boediono and Sri Mulyani of being tainted because of the Bank Century
bailout, which government auditors have said was flawed.
Both Boediono and Sri Mulyani have said the bailout itself was legal.
They have also said they welcome a proper investigation into any misuse of the
funds transferred under the bailout.
A political probe guided by the deeply corrupt Golkar Party is obviously
not what Sri Mulyani has in mind.
"I should become more realistic," she told the Journal. "I'm expecting a
nasty battle" over the probe.
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