Jokowi appoints Sri Mulyani Indrawati: what will she do next?

Photo: Sebastiaan ter Burg/CC BY-SA 2.0

By Fawnia

The latest cabinet reshuffle by President Joko “Jokowi” Widodo has once again proved to be a wise move. However, the public could not care less about the detail of the cabinet reshuffle. There is one big piece of news, the return of Sri Mulyani Indrawati, previously the Finance Minister between 2005 and 2010.

Eight ministers were eliminated from their positions in the reshuffle, and four others were assigned to new positions. Nine new faces were also added to the final line-up. The move brought tears to some of the ministers’ eyes when they made their final speech, for some others, it means a chance to travel and explore new career options.

This reshuffle is much better than Jokowi’s first says Indonesian Survey Circle (LSI) executive director Kuskridho Ambardi. He adds that Jokowi’s latest move has also proved his strengthened position as the leader of the country, making a courageous move by avoiding intervention and taking the decisions himself.

Open confrontation

Sri Mulyani Indrawati’s departure from the cabinet in 2010 was not a quiet one. It preceded the Century Bank bailout, one of the biggest financial crisis of that year. Meanwhile, Indrawati’s open confrontation with politician and businessman Aburizal Bakrie also made it into the headlines. Her refusal to agree Bakrie Lapindo’s oil-rig mudflow as a natural disaster was supported by the public; but not by influential politicians.

Ever since her withdrawal from the cabinet, Indrawati had served as the World Bank’s managing director and chief operations officer. She was given the post, to the surprise of of the public, less than a month after her retreat from her previous position.

Now she is again in national government, public interest has focused on the headlines announcing her reinstatement as the Finance Minister. By taking the seat in the cabinet she is replacing Bambang Permadi Soemantri Brodjonegoro. He is now commanding the National Development Planning Agency (Bappenas).

A new start?

President Joko Widodo’s intention in reshuffling the cabinet for the second time is crystal clear; to strengthen Indonesia’s economy, putting many responsibilities on Indrawati’s shoulders. In his speech at a press conference at the State Palace, Jokowi specified several specific challenges that he and his cabinet must tackle; economic inequality, poverty, and regional quality. At the same time, he expressed his desire to work optimally; hand-in-hand with the Cabinet so that they may all see results.

The decision to reappoint Indrawati was welcomed warmly by the public and economists. Yose Rizal Damuri, with the Centre for Strategic and International Studies (CSIS) highlighted Indrawati’s experience in dealing with tax amnesty as particularly interesting.

Back in 2008, the government introduced the Sunset Policy, where citizens can voluntarily register to file their tax returns. This also allowed for the pardon of administrative penalties for late tax payment for those who had registered their tax identification numbers (NPWP).

The policy lasted not longer than a year, but within that short period of time the government successfully earned Rp 7.5 trillion or around US$571.65 million. The political power behind this moves was, unsurprisingly, Indrawati.

Future successes?

Yose also mentioned that following Indrawati’s departure similar programs run in 2015 proved to be a failure. As such he expects Indrawati to again show her prowess when dealing with this year’s tax amnesty programme. Similarly, Indonesian Business Data Center founder Christanto Wibisono weighed the real reason behind her reappointment, saying that President Jokowi believes her trustworthiness is enough to convince people to actively participate in the amnesty.

In the wake of the reshuffle announcement, the Jakarta Composite Index (JCI) ended its same-day trading session with a 1% increase, which many agreed was thanks to the positive response to Indrawati’s return. Local  economist, Rangga Cipta, said that’s because investors have witnessed her strong performance in the past.

Even among her critics, such as Aburizal Bakrie, there is approval for President Joko Widodo’s decision to reappoint Indrawati. He explains, “It is fine. Sri Mulyani’s credibility and ability are proven.” He also claimed that he had predicted her return a year before, and that he hoped her return would bring positive results for Indonesia’s economy and profit the people.

It is too early to predict anything about the reshuffle, but one thing is for sure: it was done in the hope of benefiting the public. Will it be a success, or break the spell of the President’s recent good judgement? We’ll have to wait and see.