17 Jan 08

Dr Mulyani gave the Annual Lecture of the Global Economic Governance Programme

Indonesia’s Finance Minister, Dr Sri Mulyani Indrawati, was in Oxford to talk about her country’s recovery from the Asian financial crisis of 1997. She said great efforts were being made to rid all levels of government of corruption, so the country could regain the confidence of investors.

Dr Mulyani was giving the Annual Lecture of the Global Economic Governance Programme on the ‘Challenges of Globalisation for Indonesia’ at the Examination Schools on 15 January. She is one of the world’s youngest Finance Ministers and was voted international Finance Minister of the Year in 2006 by Euromoney.

The Minister said the main challenge is the ‘huge scepticism – huge in magnitude and scale in Indonesia – where people are exhausted by the crisis and past failures.’ She described the corruption of the old system and laid out a plan for building a ‘clean, effective, and efficient government,’ which she says is already beginning to gain public and political support for a new direction for Indonesia.

Dr Mulyani commented on the pressures from outsiders: ‘ When they say “Clean up the country!” Of course, we want to clean up the country. “Make new laws!” we are making new laws. “Create the checks and balances!” We have to make sure the checks and balances don’t just redistribute the corruption between the check and the balance.’

Successful reform in Indonesia relied on the public ‘taking ownership,’ she said, adding that reform could work if it was a ‘public asset.’ She revealed the message she gave to people, including her own officers working for the Finance Ministry, to keep them on board. ‘Do you want to be remembered as a corrupt officer or someone who cleaned up Indonesia?’ she asked them.

Dr Mulyani knows firsthand about the difficult relationship between Indonesia and the International Monetary Fund (IMF) and the World Bank.

She was at the centre of a storm when she represented Indonesia as Executive Director at the IMF: some Indonesians accused the IMF of causing irreparable damage to the country in the wake of the Asian financial crisis in 1997. The country still has a huge debt burden and badly needs foreign investment for development, but needs first to deal with the charges that its system is corrupt.

Dr Mulyani said: ‘Unlike in the past when we have always hired a nice consultant or even the World Bank, which is telling us to do this or that, we are just doing it by ourselves. The World Bank comes to me and they say “How can I help you?” Well, you cannot help me!  Please stay away, because I want to reform first, because if you are with me everybody will speculate that I am reforming because of you! Go! Go! Don’t get close to me first. Not until everyone is in their position to create reform.’

Dr Mulyani is known as a passionate advocate for her country. A year ago she issued a plea to the world's most powerful economic leaders to waive conditionality and allow Indonesia to reform its economy. Speaking to the world’s top economic policy-makers, the Board of Governors of the IMF and World Bank, in 2006, she said: ‘Like many governments we have a comprehensive plan to improve governance. It is not perfect. It reflects the real, messy politics of development, especially in newly democratic systems like Indonesia.’

Dr Mulyani has a doctorate in economics from the University of Illinois and served as a member of the National Economic Council during Abdurrahman Wahid's administration. Subsequently she represented Indonesia and 11 other countries from the region at the IMF.She returned to her country to become Minister for Development Planning and then Finance Minister. She has become one of the foremost policy experts guiding Indonesia’s economic reforms.

The Global Economic Governance Programme is linked to Oxford University’s Department of Politics and International Relations and the Centre for International Studies.