Commentary: Embattled Sri Mulyani missing out on most important support: SBY’s

Finance Minister Sri Mulyani Indrawati is not alone in fighting the politicians trying to put the blame for the Bank Century bailout mess squarely at her doorstep, but she is missing out on the support of the one person who counts the most: President Susilo Bambang Yudhoyono.

As the Bank Century inquiry by a special panel at the House of Representatives picks up pace this week, it is becoming clearer that she is being singled out as a prime target, raising the prospects of losing her job at the end of this parliamentary process.

It was in her capacity as chairwoman of the Committee for the Stability of the Financial Sector (KSSK) that Mulyani made the decision to save the troubled small bank on Nov. 21, 2008, on grounds that letting it collapse would have triggered a “systemic” run on several other banks that could affect the entire economy.

The inquiry will also look into the role that Vice President Boediono played as then governor of Bank Indonesia, which provided the information on which Mulyani based her decision. The bailout eventually cost Rp 6.76 trillion, or 10 times the original estimate, and some of the attacks are inevitably rubbing off on the economics professor.

As a technocrat, Mulyani has little political support, unlike many of her Cabinet colleagues who owe their position to their parties being part of the coalition government. She came into the Cabinet, however, with strong credentials, having created a reputation as one of the few tough reform-minded economic ministers.

While she has won plaudits and many friends, in the business world and in civil society, she has also created many enemies along the way, particularly those who fell prey to her reform measures. Some of these enemies are now clamoring for her head, and they have found a perfect opening in the House’s special panel set up to look into the Bank Century bailout.

Her long-running dispute with Aburizal Bakrie is well known, dating back to the days when he was chief welfare minister for Yudho-yono’s first-term Cabinet until last October. Now chairman of Golkar, Aburizal has the opportunity to go after her through the parliamentary process.

A Golkar member on the panel, Bambang Susatyo, brought the rift into the open when he claimed he had a recording of Mulyani and Bank Century owner Robert Tantular cutting a bailout deal. Mulyani has denied the allegation, describing it as a “heinous lie” and an attempt at character assassination.

The one person’s support that would have made all the difference in this battle is sadly not forthcoming. Instead, President Yudhoyono, clearly more concerned about protecting his own backside, ordered all 144 representatives of his Democratic Party at the House to sign the petition demanding the special inquiry.

This is a case of the President effectively throwing Mulyani to the Senayan den of wolves.

For all his faults, president Soeharto was always protective of his ministers, and would have considered an attack on any of them as an attack on his leadership. Those ministers were his recruits, after all, and were his most trusted aides.

While it is almost unlikely that the panel will find any incriminating evidence against Mulyani, the House could still fault her for the bailout decision, by summoning experts willing to testify that the threat of a systemic run on other banks was overstated.

This essentially brings the debate down to a question of judgment. Was the minister right or wrong in her judgment and her reading of the economic situation at the time? Wasn’t Bank Century too small
to have that much of an impact on other banks?

The difference between her and her critics is that she is the finance minister, whose decisions affect the country’s economy one way or another. Her critics can make any judgment they like, but they do not have to face any “life-and-death” situations.

The only regret she has about her decision was that the information supplied by Bank Indonesia was somewhat incomplete, resulting in the total bailout cost soaring tenfold. But even had she known then what she knows now, she insists she would have made the same decision.

“I believe what I did then was right, and I still believe that it was the right decision today,” Mulyani has repeatedly said. “And I did it to save the Indonesian economy.”

And needless to say, she has done that for and on behalf of President Yudhoyono. At the very least, she should enjoy his protection, if not his gratitude. So far, we have not seen either.