Indonesia’s Bakrie Grabs New Post

With the ink still wet on Finance Minister Sri Mulyani Indrawati’s resignation in favor of a top World Bank job, her bitter foe Aburizal Bakrie, one of Indonesia’s richest men and the head of the Golkar Party, has been appointed “managing chairman” of a new government joint secretariat that is likely to play an important role in determining government policy.

The secretariat was formulated last Friday at a closed meeting of ruling coalition parties at the home of President Susilo Bambang Yudhoyono, just two days after Sri Mulyani said she was leaving. Bakrie has made no secret of the fact that he would like to succeed Yudhoyono when his presidential term ends in 2014, and some analysts in Jakarta see the appointment as a precursor to Bakrie’s campaign plans.

Although senior Democrat Party members and Golkar officials say Bakrie’s new position won’t give him the power to influence the way the country is run, others are skeptical. Ikrar Nusa Bhakti, a political analyst from the Indonesian Institute of Sciences, said Bakrie’s appointment would give him strong influence in determining the way the government is run.

Hatta Rajasa, chairman of the National Mandate Party (PAN) and chief economic minister, who was previously coordinator for the coalition, has been conspicuously left without a role in the new structure. Rajasa has also been regarded as having ambitions to become a possible presidential successor.

“President Yudhoyono may be safe for now, but he no longer has full political authority over the government,” Bhakti said.

Sri Mulyani has been an implacable foe of some of Bakrie’s maneuverings since the days when the two served in Yudhoyono’s first cabinet. After he made a hash of his original appointment as Coordinating Minister for Economic Affairs, she succeeded him. She made a particular enemy when she vetoed a bailout for Bakrie's distressed companies during the 2008 global financial crisis and for carrying on a sustained campaign to force the tycoon's companies to pay back taxes. Three Bakrie companies have been charged with tax evasion by the Finance Ministry’s tax office ‑ PT Bumi Resources, the country’s biggest coal miner; PTKaltim Prima Coal and PT Arutmin Indonesia.

There are also splits within Golkar itself, with some members of the party forming a “Clean Golkar Caucus” to ask that Bakrie step aside until he resolves the allegations of tax evasion, totaling Rp2 trillion (US$212 million) by the three companies in 2007.

It is questionable if anyone in Indonesia today has the kind of steel and clean reputation that Sri Mulyani, a former International Monetary Fund official, showed as finance minister. The public and business leaders are watching anxiously to see who will replace her when she leaves at end of this month to become a managing director of the World Bank. Given Bakrie’s new sway with the government, there is deep concern over his influence.

In an editorial printed Monday, the influential Koran Tempo newspaper in Jakarta warned: “We should have learned from the bitter lesson six years ago. At the time the president had put Aburizal Bakrie as Coordinating Minister of Economic Affairs to accommodate the Golkar Party's political interest. The economy staggered to a crawl. Inflation rates soared. The rupiah plummeted. All thanks to poor coordination among the economic team under Bakrie's command.”

Ultimately, Bakrie was pushed out in a cabinet reshuffle to become Coordinating Minister for Social Welfare. Sri Mulyani, who at the time was Minister of National Development Planning, took over as finance minister. She has been given high marks by international rating agencies for steering the economy through most of Yudhoyono’s presidential reign, including the global financial crisis.

Although Golkar may support the government for now, in the long run there is no guarantee that the party will not rebel against the coalition, as it did during the months-long probe into the bailout of Bank Century in 2008, which was saved when Sri Mulyani and Vice President Boediono, then the head of the central bank, poured more than $700 million into it to keep it solvent. A House of Representatives panel spurred on by Bakrie charged that the two had exceeded their authority in trying to save the bank and sought to charge them with corruption. Golkar, even though a constituent party in Yudhoyono’s ruling coalition, led the campaign against the two.

Ikrar Nusa Bhakti theorized that the appointment for Bakrie was in exchange for assurances that the political turmoil over the Bank Century probe would cease. There are continuing attempts to impeach Boediono for his role in the bailout. Some Golkar lawmakers are still demanding the inconclusive witch hunt continue. Now, however, Anas Urbaningrum, a senior Democratic Party official, said that from a “political perspective,” the Bank Century case was essentially over.

Anas told reporters that the participants in the meeting to form the secretariat had agreed on four issues: strengthening the coalition to help it better support the government; establishing a joint secretariat; establishing a comprehensive coalition in the government and in the House, without forcing coalition partners to compromise on their party lines; and discussing strategic issues within the joint secretariat that would later be implemented by all parties.

“This is the first concept of its kind in the country’s political history, and a wise initiative by the president,” Anas said. “It’s the dawn of a new era of an organized coalition.”

It could also spell the end of serious reforms if Yudhoyono is not careful.