http://arabnews.com/world/article50722.ece
Indonesian reformers under fire as Indrawati quits By SUNANDA CREAGH & JANEMAN LATUL | REUTERS Published: May 6, 2010 16:16 Updated: May 6, 2010 16:16 JAKARTA: Indonesian Finance Minister Sri Mulyani Indrawati's decision to quit after months of attacks by her political opponents is a setback for those pushing reforms viewed as crucial to luring investment and spurring growth. Her replacement has not yet been announced, leaving investors uncertain over the future pace of reform in Southeast Asia's largest economy. But some opposition politicians were quick to step up criticism of Indrawati, adding they hoped her fellow reformer, Vice President Boediono, would be next to go. "The immediate presumption is this is a happy day for someone who wants to wind back the changes," said political analyst Kevin Evans from the election monitoring firm, Pemilu Asia. "So the question is, will it be a case of 'Fine, you have got your scalp but the game doesn't change' or will it be 'Let's limp along for the next four years'?" President Susilo Bambang Yudhoyono won a second five-year term last year on promises to continue the fight against corruption and drive economic growth. With the presence of top reformers like Indrawati in the cabinet, investors have poured money into Indonesian assets on expectations of strong economic growth and improved prospects of an investment grade credit rating for this G-20 member. Stocks tumbled nearly 4 percent on Wednesday and continued to drop on Thursday, while the rupiah weakened to 9,225 per dollar on Thursday from 9,030 on Wednesday following the news Indrawati would join the World Bank as a managing director. But economists said the sell-off mainly reflected investor jitters over euro zone woes, rather than a reaction to Indrawati's departure from the financial driving seat, with several Asian markets down on the day. Two people close to Indrawati - often called Indonesia's "icon of reform" and known for her integrity in a country where many government officials are widely believed to be on the take - said her decision followed intense pressure from political enemies within government and in opposition. "She actually wanted to stay but she can't bear the pressure any more," one close source told Reuters. Chief among her adversaries according to analysts and local media is the powerful politician and tycoon Aburizal Bakrie, although he has denied the characterization. A former top cabinet minister himself, Bakrie heads Golkar, the Suharto-era political party that has historically dominated the bloated and corruption-ridden civil service - one of Indrawati's targets for reform. While Golkar is a member of Yudhoyono's coalition, Bakrie is considered a symbol of Indonesia's old guard and he and Bakrie group companies have repeatedly clashed with Indrawati. She refused to keep the stock market shut more than a few days during the 2008-2009 financial crisis when local media reported the Bakrie family and others wanted it closed longer. Bakrie group crown jewel Bumi Resources is one of dozens of firms under investigation for tax evasion in a clampdown Indrawati ordered. Bumi has challenged the investigation. And Indrawati has been one of the cabinet ministers opposing the Bakrie group's acquisition of mining assets currently controlled by foreign firms. In an interview with Reuters last year, when Aburizal Bakrie was asked about his reportedly difficult relationship with Indrawati, he demanded several times: "Who told you to ask that?" before adding he had no problem with Indrawati, describing the former IMF director as a "cashier." A Bakrie spokesman, Lalu Mara Setria Wangsa, said on Thursday: "I think her resignation is good as it gives other bureaucrats or economists a chance to show their quality because I think many of them are qualified too. "It had nothing to do with Pak Ical," he added, referring to Bakrie by his family nickname. It's not just the Bakrie companies which have felt heat from Indrawati. Her clean-up of the notoriously corrupt tax and customs offices has hit powerful vested interests ranging from businessmen and law-enforcement officials who benefited from smuggling goods to tycoons who routinely evaded paying millions of dollars in taxes and duties. Over the past 18 months, Indrawati and Boediono came under attack from political opponents eager to unseat two of the most powerful drivers of change in Indonesia, in particular for their role in approving a bank bailout. Indrawati and Boediono, then central bank governor, agreed to the bailout of a small lender, Bank Century, at the height of the 2008-2009 global financial crisis to stave off the risk of widespread panic in Indonesia's financial markets. Both faced months of questioning and highly politicized criticism and grandstanding by parliamentarians. The investigation failed to find any evidence of corruption by either, and President Yudhoyono publicly backed them, but parliamentarians continue to attack both. Fuad Bawazier, a senior member of the opposition Hanura Party, told local media he believed Indrawati's departure is in line with the Bank Century inquiry committee's recommendations. "I hope Boediono is next," he told Republika newspaper. After decades of rule by the authoritarian President Suharto, and just over a decade of real democracy, Indonesia still faces enormous challenges in rooting out graft at just about every level of society while tackling reform of key institutions. "We cannot expect everything will be changed immediately given our institutions," said Chatib Basri, an adviser to the finance minister and a possible contender for the post, in an interview with Reuters before Indrawati's resignation. "Given the corrupt and uncertain legal system, what can we do? If the requirement is to improve the legal system first, to improve the corruption first, then maybe the policies could be implemented 20 or 25 years from now. "You cannot expect there will be judicial reform straight away. You cannot expect the Star Wars recommendation under a Jurassic Park system. It doesn't work.
