Indonesian President Susilo Bambang Yudhoyono, facing trouble from corruption allegations in his Democrat Party, faces difficulty on another flank with the announcement Wednesday that a new political party has been registered in the name of Sri Mulyani Indrawati, his former finance minister, for the 2014 Presidential campaign.

If, as expected, she does run, her candidacy would set up a crystal-clear contrast with what appears to be endemic corruption among leaders of the Democrats, which has embarrassed Yudhoyono and driven down his popularity ratings over the past three months. It would set up an even bigger confrontation – and contrast – with Aburizal Bakrie, one of Indonesia’s richest tycoons and a man who has made no secret of his ambition to run for the presidency himself.

Before her departure from the government in May 2010, Sri Mulyani was considered representative of a new Indonesia that sought to break away from decades of corruption and governmental patrimony. Her reforms have been given widespread credit for Indonesia’s economic turnaround. Bakrie, by contrast, heads Golkar, the political party set up by the late strongman Suharto and which has been regarded mostly as a vehicle to allow top members to avail themselves of government patronage.

Sri Mulyani left Yudhoyono’s cabinet after an epic series of confrontations in which she refused to bail out Bakrie’s coal interests with government funds after the Indonesian stock market collapsed at the onset of the global financial crisis. She also insisted on investigating Bakrie’s interests on tax fraud charges involving tens of millions of dollars, and refused to agree that a huge gas well blowout caused by a Bakrie subsidiary was a natural disaster. The mud flow from the blowout has inundated 12 villages of East Java and driven 40,000 people from their homes.

After her departure for the World Bank, where she was named as one of three governors, overseeing the bank’s activities in 74 countries in Latin America, the Asia Pacific, Middle East and North Africa, all of the cases against Bakrie were shelved. In an interview with the Wall Street Journal, she blamed the tycoon for her departure from the government.

The new party, to be named as the Independent People’s Union – conveniently known by its Indonesian-language initials SRI, was officially registered with the Justice and Human Rights Ministry on Wednesday. Damianus Taufan, the new party’s chairman, told reporters the party officials have not approached Sri Mulyani to see if she wants the job. However, rumors have been circulating for months in Jakarta that the former finance minister, who will be 49 on Aug. 26, would like to return to take on the country’s vast corruption and particularly Bakrie.

Despite her personal popularity, a handful of reformers in Jakarta is going to need an awful lot of help to get the word to places where traditionally campaigning consists of handing out money in return for votes. But it takes considerable party machinery throughout a sprawling nation that famously covers nearly 13,500 islands and is comprised of 33 provinces, ranging from relatively cosmopolitan Jakarta to places – admittedly not too many anymore -- where people still wear penis gourds.

Taufan, however, told reporters he is optimistic about the party’s registration, saying it already has 2,000 members and the required representation in all 33 provinces. But the odds that Sri Mulyani will top the presidential polls in 2014 are probably long unless she can forge a coalition with other parties.

Although they haven’t specifically asked her to head the party, Taufan told reporters, “she knows about our activities and the establishment of the party,” he said. “Hopefully, when she finishes her contract with the World Bank, she will join us.”

Several public figures attended the registration event, including Arbi Sanit, a political analyst from the University of Indonesia; Fikri Jufri, a veteran journalist; Todung Mulya Lubis, a prominent human rights lawyer; and Rocky Gerung, a University of Indonesia philosophy lecturer, all of whom have been tied to reform efforts.

That stands in sharp difference to Yudhoyono’s Democrat Party, which stands in serious danger of being wrecked by allegations of corruption and infighting. Political analysts in Jakarta have called the current scandal the worst of the president’s political career. The party’s fugitive former treasurer is outside the country, continuing to level increasingly credible and detailed charges of corruption over the construction of an athlete’s village facilities for the Southeast Asian Games, to be hosted by Indonesia in the South Sumatra province of Palembang in November.

Although there have been calls by party leaders to get the fugitive, Mohammad Nazaruddin, to come home, there is widespread suspicion in Jakarta that they would prefer that he keep going. His sudden departure in May, a day before he was due to be banned from travel for allegedly accepting US$3 million in bribes over the construction, raised questions whether he was being helped out of the country by party officials.

Despite efforts to shut him up, Nazaruddin has delivered continuing allegations that seemingly grow more explicit with each new revelation, particularly that the party chairman, Anas Urbangingrum, and others were implicated in the bribery scandal, and that the party chairman had engaged in vote-buying. Other party officials have been named in the scandal as well.

Yudhoyono was elected as a reformer in his first term in office, a reputation that burnished considerably by Sri Mulyani’s efforts to clean up the government. That reputation has been tarnished time and again, partly because of the Bakrie episode with Sri Mulyani and now with the athletes’; village scandal, which is being shown repeatedly on the country’s television stations – including interviews with Nazaruddin, who appears relatively easy to find by reporters, but not by the National Police.

An opinion poll by the Indonesia Survey Circle showed the president’s approval rating, reported as high as 90 percent when he was reelected, had fallen from 56.7 percent at the end of 2010 to 47.2 percent in June.

Thus the SRI party, on its face, should stand in vivid contrast to the established parties. Sri Mulyani’s performance as finance minister and her reputation for incorruptibility should be a major selling point. She was given credit for driving up foreign direct investment from US$4.6 billion to US$8.9 billion in a single year. She set out to clean out the notoriously corrupt tax and customs department – not always with success, given the Bakrie interests’ achievement in thwarting her efforts.


Sri Mulyani: BI needs to be 'cleaned up'
   Business News - June 12, 2000
   JAKARTA (JP): The House of Representatives does not need to revise Law No. 23/1999 on the  independency of Bank Indonesia, but the central bank needs to be "cleansed" of the problems resulting from past mistakes, a noted economist said.
   Sri Mulyani, secretary-general of the influential National Economic Council (DEN), said a cleanup was needed to assure the public that Bank Indonesia would not abuse its independency, and so that it could implement its independent status effectively.
   "The reputation of Bank Indonesia has so far been questioned due to various problems," Sri told a seminar on the weekend.
   She said the possible abuse of channeling of massive amounts of Bank Indonesia liquidity support to ailing banks between 1998 and 1999 and a further delay in the publication of the audit results on the Bank Indonesia 1999 books were among the problems creating a negative image
for the central bank.
   She also pointed out that Bank Indonesia senior deputy governor Anwar Nasution once described the central bank as a "den of thieves".
   Many analysts have said the former authoritarian government of president Soeharto had long abused the role of Bank Indonesia, especially as the central bank was still part of the Cabinet at the time.
   Sri said prior to giving independent status to Bank Indonesia, the noted internal problems should have been cleaned up first to assure the public that the monetary authority could implement its job effectively.
   "This kind of sequencing was not there when Law No. 23/1999 was approved. So what's happening now is that the law tends to provide protection toward efforts to correct the past mistakes," Sri said.
   But she disagreed to calls for the House to amend the law now, particularly amid the conflict between Bank Indonesia Governor Sjahril Sabirin and President Abdurrahman Wahid.
   "Revising the law now would not be appropriate because of the escalating clash between Sjahril and Gus Dur. People will be biased and not objective," she said, referring to the President by his popular nickname.
   There has been growing pressure for the House to revise the Independency of Bank Indonesia Law, approved by the House in May 1999, following the outbreak of the showdown between the two prominent  figures last week.
   Sjahril was named a suspect in the high-profile Bank Bali scandal early last week by the Attorney General's Office. But Sjahril denied any involvement, and told the public that this was
merely a political ploy to force him out of the central bank before his term ends in 2003.
   Sjahril also said the President repeatedly asked him to step down from the central bank or he would risk becoming a suspect in the Bank Bali case, raising concern that the President was intervening.
   He also said calls to amend the law were part of efforts to oust him from Bank Indonesia.
   Under the new law, members of the Bank Indonesia board of governors can not be dismissed unless they are proven to have committed a crime or are permanently unable to perform the job.
   The law also ensures that Bank Indonesia is free from government intervention in designing its monetary policies.
   Meanwhile, University of Gadjah Mada economist Arief Karseno supported calls to amend the law to allow the government to also coordinate with Bank Indonesia in designing economic policies.
   Arief said under the current law, Bank Indonesia could freely design its own monetary policies without having to coordinate with the government.
   He also said the current law did not clearly stipulate the jobs of Bank Indonesia.
   He pointed out that chapter seven of Law No. 23/1999 only stipulated that Bank Indonesia's objective was to attain and maintain the stability of the value of the rupiah.
   Arief said this did not mean that Bank Indonesia had a duty to control the exchange rate of the rupiah.
   "This kind of situation will be dangerous to the economy," he said. (rei/swa)

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