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Sri Mulyani: Veteran economist returns

Dr Sri Mulyani is back in charge of the Finance Ministry, a post she previously held from 2005 to 2010. Her appointment was largely welcomed and had an immediate positive impact on stock prices and the rupiah.
Dr Sri Mulyani is back in charge of the Finance Ministry, a post she previously held from 2005 to 2010. Her appointment was largely welcomed and had an immediate positive impact on stock prices and the rupiah.PHOTO: REUTERS

When President Joko Widodo needed a minister to spearhead his economic reform agenda, including an overhaul of Indonesia's tax system, he chose former World Bank managing director Sri Mulyani Indrawati.

The 53-year-old returned to Indonesia last week to helm the Finance Ministry as part of Mr Joko's second Cabinet reshuffle in as many years.

It was a homecoming for the veteran economist, who had held the same post from 2005 to 2010.

OCBC Bank economist Wellian Wiranto said she had won over market players with her straight-talking style and was credited with keeping the Indonesian economy steady during the global financial crisis in 2008 - both critical factors that led to her recall by Mr Joko.

"During her previous tenure, she also won plaudits for cleaning up internal bureaucracy at the ministry, particularly at the crucial Tax Directorate-General," he added.

Among her accolades are Euromoney Finance Minister of 2006, as well as being ranked 37th in Forbes magazine's "100 most powerful women of 2016".

She has a solid track record as a technocrat but is not known to have political affiliations, which explains her previous clashes with the Jakarta business elite during her first stint as finance minister.

  • Two names stood out in Indonesia's reshuffled Cabinet last Wednesday - Finance Minister Sri Mulyani Indrawati, a celebrated economist; and Coordinating Minister for Political, Legal and Security Affairs Wiranto, a retired general. Both will have their work cut out as Indonesia continues to face economic and security challenges amid global uncertainty. The Straits Times Indonesia Bureau chief Francis Chan looks back on their careers, as they return to lead the ministries they once helmed.

Her appointment was largely welcomed and had an immediate impact on stock prices and the rupiah, which recorded gains for most of last week. But it also brought back memories of a dark time in an otherwise stellar career.

According to a report in The Jakarta Post, Dr Sri Mulyani was in self-exile when she took the World Bank job in 2010, mainly over criticisms from lawmakers who had accused her and then-vice-president Boediono of mishandling the Bank Century bailout two years earlier.

Parliament called for a probe against them, but neither was ever implicated in any wrongdoing.

Dr Sri Mulyani was born in Lampung, Sumatra and was the seventh child of university lecturers. She completed her doctorate in economics at the University of Illinois at Urbana-Champaign in 1992. Her husband is also an economist and they have three children.

Mr Joko was said to have personally called World Bank President Jim Yong Kim to release Dr Sri Mulyani to be his Finance Minister.

"I know that the President's highest priority is the ongoing reform programmes, and Sri Mulyani's return will increase confidence in Indonesia's performance and will be highly important for promoting transparency," said Mr Kim.

A priority for her would be to ensure Mr Joko's tax amnesty programme delivers the billions in revenue he had promised. She is also expected to balance the state budget in the years ahead.

Experts such as Centre for Strategic and International Studies economist Yose Rizal Damuri are optimistic that she can make the amnesty work, having successfully led a similar tax plan from 2008 to 2009. The older scheme pulled in 7.5 trillion rupiah (S$768.6 million) in tax revenue, he said.

A big advocate of multilateral cooperation, Dr Sri Mulyani has promised to work with other ministries to ensure that the state budget is in line with Mr Joko's fiscal policies.

"We will sit down together to look at the targets set not only in the tax amnesty programme, but also the state budget," she said on Thursday.

A version of this article appeared in the print edition of The Straits Times on August 01, 2016, with the headline 'Sri Mulyani: Veteran economist returns'. Print Edition | Subscribe