Finance Minister Sri Mulyani Indrawati's concurrent appointment as coordinating minister for the economy, replacing Boediono, who has taken over as the new central bank governor, will maintain, if not strengthen, the policy-making credibility of President Susilo Bambang Yudhoyono's economic team.

Her appointment, which was made formal Sunday, came as no surprise to anyone. Sri Mulyani's excellent performance in her stint as chair of an inter-ministerial news conference on May 23, to explain the rationale for the fuel price increases, stoked speculation that she would be appointed as acting chief economic minister.

Sri Mulyani is the best choice for the position. As minister for development planning from 2004 to late 2005, and finance minister since December 2005, Sri Mulyani has proven her technical skills in managing the macro-economy, notably financial and fiscal affairs.

More importantly, she has proven adept at her job and shown courage, consistency and impeccable integrity in treading the messy politics of development in a newly democratic system like Indonesia's.

From the perspective of the international market, Sri Mulyani provides a great degree of stability for Indonesia's economic policy.

The Sri Mulyani-Boediono team will surely lend credibility and integrity to the country's economic management, especially in view of the upcoming parliamentary and presidential elections. Neither are affiliated with any of the political parties, and are the kind of people able to stand up to political pressure for short-term, vested interests.

Several politicians and analysts had suggested that the President leave the position of chief economic minister empty, with the presidential election just 18 months away.

However, a coordinating economic minister is still needed because there are several economic reform measures that require inter-ministerial coordination for formulating implementation regulations and supervising their execution.

Both Sri Mulyani and Boediono will be able to provide strong leadership in economic management, which is badly needed now, given the apparently widening rift and discord between the President and Vice President Jusuf Kalla.

In tapping Sri Mulyani, President Yudhoyono must have realized that integrity and competence should be basic assets of his economic team, especially starting next year when government leaders, including himself, the Vice President, who is chairman of Golkar Party, and many other Cabinet ministers will be preoccupied with the agendas of their respective political parties.

Under such conditions, a solid economic team with integrity and technical competence that commands respect both at home and overseas is needed to manage the economy.

With Sri Mulyani overseeing fiscal management and Boediono monetary management, the pair can handle economic management while other government leaders are busy with their own political ambitions. This is precisely the role Boediono played as finance minister under president Megawati Soekarnoputri during the 2004 general and presidential elections.

Fiscal and monetary management face numerous challenges as a result of the impact of the May increase in fuel prices on inflationary expectations, uncertainties in the international financial market and a weakening global economy.

However, the government should continue its fiscal discipline and push ahead with its reform agenda. Likewise, the central bank should maintain market trust in its monetary management and in the direction of its monetary policies, particularly during the highly politicized period of the election year.

The integrity and credibility of the economic team could serve as a strong foundation to reassure the market that economic management will remain on the right track during the election year, despite any political pressure for short-term measures to win voter support.

The President must, however, protect the economic team from intervention by vested interests and should see to it that the chief economic minister is really and fully in charge of making and directing economic policies. It would be better for the unity of the economic team if the President also replaced Industry Minister Fahmi Idris and State Minister for National Development Planning Paskah Suzetta, both of the Golkar Party.

It would be understandable if the pace of reform measures slackened a bit as most members of the House of Representatives are preoccupied with the upcoming elections. That is simply to be expected in a country engaged in general elections.

But as long as policy consistency and the fundamental elements of macroeconomic stability are maintained, the economy will be able to weather the upcoming period of heightened political emotions.

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