How does a corrupt government stop corruption? What if that government
is democratic, and must cultivate the support of political parties that
are themselves corrupt? Is fostering reform in such a political economy
the equivalent of trying to make snow in hell?
These questions may be overstated, but the dilemmas they convey are
all too real. Witness the storm of concern triggered by the recent resignation of the highest-profile reformist
in Indonesia, Sri Mulyani Indrawati, from her linchpin job as minister
of finance in a country that was ranked the most corrupt and the most democratic in Southeast Asia in 2009.
Sri Mulyani waged unremitting war on graft. Under her stewardship of
the finance ministry, more than 150 of its personnel were dishonorably
discharged. Nearly 2,000 more were otherwise punished for infractions.
She led a vigorous campaign against tax cheats. Among them were rich and
influential people who had grown accustomed to absconding with funds
they owed the government.
Euromoney named her ‘finance minister of the year’ in 2006—a
post she had only taken up the year before. In 2008 and again in 2009 Forbes magazine admiringly listed her among ‘the 100 most powerful women in
the world.’ Correspondingly, on the heels of her resignation on 5 May
2010, Indonesian stocks and rupiahs fell.
Indonesian president Susilo Bambang Yudhoyono (SBY) was directly
elected to that office in 2004 and, for a second five-year term, in
2009. As president he has opposed corruption and championed reform.
Fatefully, however, in 2004 he chose a wealthy businessman, Aburizal
Bakrie, to join his government as coordinating minister for the economy.
In 2006 in East Java, a Bakrie-controlled company using an
unprotected drill while probing for gas may have triggered a mud volcano that would swallow more
than a dozen villages and render more than 15,000 people homeless. In
2010 the volcano continued to spew an estimated 100,000 tons of mud
daily onto the surface. Bakrie’s reputation for probity was not enhanced
when, reportedly against Mulyani’s advice, he insisted on denying
responsibility for the disaster. Instead he blamed an undersea
earthquake that had struck off the south coast of Java, some 250
kilometers away, two days before the mud erupted. Opinions remain
divided as to what caused what.
An unambiguously man-made crisis in 2008, the global financial
meltdown, shrank the Jakarta stock market, Bakrie’s holdings included.
Trading on the exchange was temporarily suspended. Bakrie urged his
fellow cabinet member Mulyani to extend the suspension. She refused. He
was furious. Her relations with him worsened further when she slapped
travel bans on certain Bakrie company executives accused of tax evasion.
In 2009 Bakrie became chair of the Golkar Party. Toward the end of
that year he led a fierce campaign in the Indonesian legislature against
both Mulyani and another nonpartisan technocrat, Indonesian
vice-president Boediono, for malfeasance related to the government’s
decision in 2008 to rescue an ailing financial institution, Bank
Century. The bailout may have prevented a spiral of
withdrawals, and thus helped Indonesia weather the global crisis, but
the effort cost far more than expected, and some of the infusions
apparently benefited key depositors more than the bank itself.
Legitimate financial questions were soon superseded, however, by a
thoroughly political effort on the part of politicians and their
supporters opposed to Mulyani and her reforms to oust not only her but
the vice-president as well. Mulyani’s and Boediono’s opponents included,
in addition to Bakrie, others whose circumstancial links to corruption
she had uncovered.
An anti-Mulyani case in point is the Justice and Welfare Party (PKS).
Despite priding itself on upholding Islamic ethics and opposing
corruption, the PKS rejected allegations that one of its legislators,
Muhammad Misbakhun, could have been implicated in a fictitious Bank
Century letter of credit for US $22.5 million. When, at the end of April
2010, Misbakhun was arrested and detained on a warrant signed by the
national police official in charge of economic and tax crimes, PKS
leaders accused the police of having an ulterior motive. The party had
by then, in effect, joined the anti-Mulyani chorus.
Subjected to intense and prolonged criticism by these politicians in
the glare of the media, Mulyani had ample reason to quit the spotlight,
resign, and leave Indonesia. (On 1 June 2010 she will become a managing
director of the World Bank in Washington DC.) But her long record of
nonpartisan tenacity in the struggle against corruption makes it hard to
believe that she simply lost her will to fight. For the time being it is impossible
to rule out that she was sacrificed for the sake of a restoration of
political comity between SBY and his opponents.
The irony is that Golkar and the PKS had joined with SBY’s Democrat
Party to form a ruling coalition, to which they continue to
belong. SBY had built that coalition with the expectation that its
members, having joined the government, would support it, including its
campaign against corruption.
That inclusive or ‘rainbow’ strategy was a triple failure. First,
cabinet posts that might have been held by competent and ethical
nonpartisans motivated by a desire for public service were allocated
instead to partisans whose skills and motives, shall we say, varied.
Governance suffered. Second, coalition-party leaders who were given
ministerial posts in return for ensuring broad legislative backing for
the government in the legislature either would not or could not deliver
that support. Cooptation failed. Third, some ruling-team politicians,
who might have at least stood back from the fray, instead jumped in,
seemingly hoping to blunt the government’s efforts to diminish
corruption and improve governance while protecting themselves and
furthering their own careers. Discipline frayed.
Mulyani has resigned. Has Bakrie won?
In a recent conversation, an off-the-record analyst anticipated ‘more
stability, which, in Indonesia, correlates inversely with reform.’ He
could be wrong. But it may not be coincidental that on 6 May 2010, one
day after Mulyani announced her resignation, SBY met with
ruling-coalition leaders. Or that the meeting launched a Coalition
Parties Forum whose daily activities will be led by none other than the
chair of the Golkar Party, Aburizal Bakrie. Or that Bakrie reported that
SBY had agreed that the Forum would not try to bind the coalition to a
common position. Or that, again according to Bakrie, whereas previously
the coalition parties were only asked to help safeguard the government’s
policies, henceforth they would be asked to help determine them as well. Much will depend on Mulyani’s replacement as minister of
finance, and on whether he or she is told to stop rocking the boat.
If Mulyani’s remarkable legacy is indeed erased, illiberal circles in
Singapore may think, ‘We thought so. Democracy does thwart reform.’ But
my own judgment in hindsight will be less sweeping.
Indonesia’s Democrat Party is still basically an extension of the
appealing personality of SBY. Over the six years since he was first
elected president, more time, energy, and resources could have been
invested in deepening the roots and popularity of the party itself. Had
those assets been so spent, the Democrats might have been able, in the
legislative elections of 2009, to enlarge their contingent of lawmakers
enough to be able to rule, not by the dubious grace of Sri Mulyani’s
antagonists, but in SBY’s and his party’s own right—subject to
democracy’s checks and balances, yes, but freed of the need to cobble
together a coalitional rainbow of colors that clash.
Donald K. Emmerson heads the Southeast Asia Forum at Stanford
University and is also the editor of Hard
Choices: Security, Democracy, and Regionalism in Southeast Asia. (Stanford/ISEAS, 2008/9)
A heartening number of analysts helpfully commented on an earlier
draft of this essay. While protecting their privacy by not naming
them, I am grateful to them. Complementing my focus here on the
politics of Sri Mulyani’s exit is the economic context ably reviewed by
Arianto A. Patunru and Christian von Luebke in their ‘Survey of Recent
Developments’ in the Bulletin of Indonesian Economic Studies, 46: 1
(2010, 7-31.)
FSI researchers examine the role of energy sources from regulatory, economic and societal angles. The Program on Energy and Sustainable Development (PESD) investigates how the production and consumption of energy affect human welfare and environmental quality. Professors assess 
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