Mulyani Says She Remains ‘Obsessed’ With Shaking the Up State Bureaucracy
The government, now more than ever, must focus on reform of the civil service, judicial system and security forces in order to attract much-needed foreign investment and spur economic growth, Finance Minister Sri Mulyani Indrawati believes.
With the legislative and presidential elections taking place this year, reform, economic growth and job creation are likely to be the top issues for voters at a time of global economic crisis.
As a technocrat whose management of the economy and anticorruption drive have won praise from investors, the 46-year-old is seen as a possible running mate for President Susilo Bambang Yudhoyono.
“I am obsessed with this bureaucratic reform,” she said in an interview this week.
“The economy can be up and down, but you need to have a government that can function properly. This is something that needs to continue and it should be supported by other reforms,” she said, identifying the Attorney General’s Office, the police, the military and the courts as the other institutions most in need of reform.
Indonesia ranks among the most corrupt countries in the world, a factor that deters foreign investment and crimps economic growth, so that for years Southeast Asia’s biggest economy has underperformed rivals such as China and India.
But tackling endemic graft has proved a tough task for Yudhoyono’s administration. Despite several high-profile arrests, Indrawati said more must be done to attract investment.
“I think you can achieve a lot” in five years, she said.
The inefficient and overstaffed civil service has long been regarded as ripe for a shake-up. Under former president Suharto, who was ousted in 1998, civil servants were expected to vote for Golkar, and it is still seen as a party stronghold.
Yudhoyono is a reform-minded ex-general whose Democratic Party looks likely to split from Golkar, its coalition partner.
The Attorney General’s Office has come under scrutiny after top officials were caught, and imprisoned, for taking bribes in exchange for dropping investigations into corruption cases, while the legal system is seen as highly unpredictable.
The police were ranked the most corrupt institution in a survey published last month by Transparency International which found that nearly half of all interactions with the police involved bribes.
Under Suharto, the military wielded considerable power, with allocated seats in House of Representatives and a free rein to run some lucrative businesses. While they are no longer in the House, they still need to divest many of their business interests.
Mulyani, a former academic who specialized in tax policies and who worked for the International Monetary Fund, attracted attention when she took on the country’s notoriously corrupt tax and customs departments, making sweeping changes in a bid to increase state revenue and lift economic growth.
But growth, which for the past two years has exceeded the critical 6 percent level required to create enough jobs for a growing workforce, is set to slow to 4 to 5 percent in 2009 as demand for exports plunges.
The government has responded with a Rp 73.3 trillion ($6.14 billion) fiscal stimulus package, increased from an initial Rp 71.3 trillion rupiah, which includes spending on infrastructure projects and other measures to drive demand and create jobs.
The package has pushed up the deficit, now forecast at Rp 139.5 trillion, or 2.5 percent of GDP.
The government plans to tap the global and domestic financial markets to fund its 2009 budget deficit, and has $5 billion-$6 billion in bilateral and multilateral standby loans lined up in case it cannot tap capital markets.
But Mulyani said that with the House passing the stimulus package late on Tuesday night, the government could now go ahead with its planned global bond.
“Any time is the right time as long as there is enough demand and the price is right,” she said.
The global bond is part of a medium-term note program under which the government has said it could raise as much as $4 billion. It also plans to sell a yen-denominated Samurai bond and a global Shariah bond this year.
Reuters
With the legislative and presidential elections taking place this year, reform, economic growth and job creation are likely to be the top issues for voters at a time of global economic crisis.
As a technocrat whose management of the economy and anticorruption drive have won praise from investors, the 46-year-old is seen as a possible running mate for President Susilo Bambang Yudhoyono.
“I am obsessed with this bureaucratic reform,” she said in an interview this week.
“The economy can be up and down, but you need to have a government that can function properly. This is something that needs to continue and it should be supported by other reforms,” she said, identifying the Attorney General’s Office, the police, the military and the courts as the other institutions most in need of reform.
Indonesia ranks among the most corrupt countries in the world, a factor that deters foreign investment and crimps economic growth, so that for years Southeast Asia’s biggest economy has underperformed rivals such as China and India.
But tackling endemic graft has proved a tough task for Yudhoyono’s administration. Despite several high-profile arrests, Indrawati said more must be done to attract investment.
“I think you can achieve a lot” in five years, she said.
The inefficient and overstaffed civil service has long been regarded as ripe for a shake-up. Under former president Suharto, who was ousted in 1998, civil servants were expected to vote for Golkar, and it is still seen as a party stronghold.
Yudhoyono is a reform-minded ex-general whose Democratic Party looks likely to split from Golkar, its coalition partner.
The Attorney General’s Office has come under scrutiny after top officials were caught, and imprisoned, for taking bribes in exchange for dropping investigations into corruption cases, while the legal system is seen as highly unpredictable.
The police were ranked the most corrupt institution in a survey published last month by Transparency International which found that nearly half of all interactions with the police involved bribes.
Under Suharto, the military wielded considerable power, with allocated seats in House of Representatives and a free rein to run some lucrative businesses. While they are no longer in the House, they still need to divest many of their business interests.
Mulyani, a former academic who specialized in tax policies and who worked for the International Monetary Fund, attracted attention when she took on the country’s notoriously corrupt tax and customs departments, making sweeping changes in a bid to increase state revenue and lift economic growth.
But growth, which for the past two years has exceeded the critical 6 percent level required to create enough jobs for a growing workforce, is set to slow to 4 to 5 percent in 2009 as demand for exports plunges.
The government has responded with a Rp 73.3 trillion ($6.14 billion) fiscal stimulus package, increased from an initial Rp 71.3 trillion rupiah, which includes spending on infrastructure projects and other measures to drive demand and create jobs.
The package has pushed up the deficit, now forecast at Rp 139.5 trillion, or 2.5 percent of GDP.
The government plans to tap the global and domestic financial markets to fund its 2009 budget deficit, and has $5 billion-$6 billion in bilateral and multilateral standby loans lined up in case it cannot tap capital markets.
But Mulyani said that with the House passing the stimulus package late on Tuesday night, the government could now go ahead with its planned global bond.
“Any time is the right time as long as there is enough demand and the price is right,” she said.
The global bond is part of a medium-term note program under which the government has said it could raise as much as $4 billion. It also plans to sell a yen-denominated Samurai bond and a global Shariah bond this year.
Reuters