Five months into his 5-year term, Indonesian President Prabowo Subianto is militarising his government yet ignoring the advice of his most experienced economic advisor, who just happens to be a woman. Duncan Graham reports.
In an administration that thinks women have little to offer other than home duties, the most respected member of the Indonesian Government is reportedly thinking of quitting.
The internationally-known, most qualified and experienced member of Prabowo Subianto’s misogynist ministry is the nation’s ruler of the Rupiah. Dr Sri Mulyani Indrawati, 62, isn’t just famous because she’s one of five women in the ‘Red and White’ (national flag colours) unwieldy Cabinet of 48 ministers, 55 deputy ministers, and 20 cabinet-level agency officials – the biggest this century.
She’s the economist the markets trust. So when the dogs started barking that she’d had enough of political interference, the money men got nervous.
On March 18, the Indonesian Stock Exchange (IDX) plunged 7.1% in morning trade, triggering a 30-minute trading halt, the first since Coronavirus days. The market later recovered but is down 12% since the start of the year, and is down 20% since its peak in September 2024, the poorest performing exchange in the region.
The Rupiah (IDR) is down 10% vs USD over the same period.
Dr Sri, who earned her PhD at Illinois University, eventually denied she was seeking an exit and is reported to be forecasting growth through more efficient tax collection, but she’s vamoosed before.
Dr Sri Mulyani Indrawati
Dr Sri first held her present position under sixth President Susilo Bambang Yudhoyono from 2005 to 2010 and quickly exercised her authority, sacking 150 corrupt tax and customs officers and penalising another 2,000. Good management, poor politics. Local enemies multiplied, but so did friends from overseas.
Once she ruled the deposit account, Indonesia scored $8.9 billion in foreign direct investment, almost doubling the previous year’s receipts.
The Republic’s income was boosted across five years by snaring 16 million individual taxpayers, a fourfold increase in a nation where tax avoidance had long been more a sport than a crime (and where 48% of the adult population didn’t have a bank account in 2021).
She was applauded by international bankers and voted Asia’s Finance Minister of the Year, but made a lesser impression among envious local politicians. So she quit.
Unbothered by parochialism, the World Bank made her one of three managing directors, a win for Washington and a loss for Jakarta. When new president Jokowi called her back after the 2014 election, the GDP jumped to six per cent.
Prabowo wants that to rise to eight per cent on the back of mineral exports, as the archipelago is rich in geothermal power, coal, nickel, copper and other elements. There’s little chance unless he calls off the jealous recalcitrants wanting to mine Dr Sri’s zone.
“Sit down, shut up, get money”. Indonesia’s Prabowo shifts back to the right
Militarising the government
The President, a former general with a dubious human rights record, may be fine at shooting and bayoneting but he’s never had a stab at finance. Neither have the soldiers he’s appointed to run major departments in the world’s fourth most populous nation once predicted to become a key economic force challenging the G7. That may not happen if Dr Sri leaves.
Donald Trump has become infamous for appointments based on sycophancy. Like the US President,
Prabowo’s selection has rarely been made on merit, more commonly on military connections.
There are serious fears that Prabowo wants to smother democracy and revive the dwifungsi (two functions) policy of last century. This gave the military control over civilian affairs and special seats in the legislature.
Before her recruitment as Indonesia’s first woman to hold the finance portfolio, Dr Sri had been an academic following her parents’ professions. She doesn’t belong to any party and so far seems altruistic, a stand-out in a forest of self-servers. (The Indonesian system allows ministerial appointments from outside politics.)
In 2009 Australian spooks got into her personal phone. “Not spying, but research,” explained PM Tony Abbott.
No such thing as a free breakfast
There are swags of problems surrounding Prabowo’s first five months in office, but the biggest are shots in both feet. His pre-election promise of supplying free food and milk to the nation’s 83 million schoolkids was a great idea to reduce stunting, but flawed because it hadn’t been properly costed. Australian political candidates might want to take note.
Originally it was thought Rp 15,000 (AUD 1.50) a meal would be enough, but then the budget was surprisingly cut by a third with no reasons given.
The project head called for an extra AUD ten billion just to reach a quarter of the target by the end of 2025. The army had to be hired to deliver the meals.
Prabowo pushes pet milk project … but wait, Indonesians lactose intolerant
Prabowo floundered as his signature promise turned as bad as some of the food; the expectant electors noticed that his solution was amateur – widespread cost-cutting to find AUD 30 billion. Power in government offices was shut down after 4 pm, leaving lifts in limbo and AC plants idle, creating an impossible work environment in soaking Jakarta.
Field hoers and harvesters from farming villages may have chuckled, but the nation’s 4.5 million public servants in their tall towers were sweaty and unhappy. They, too, are voters and influential in the world’s third-largest democracy after India and the US.
The prez continued stuffing-up. He ordered the axe to department budgets, including education, saying, “Our children must not be hungry. Our people, our children, must be well-fed.”
True – but they also need to be well-taught. Funding for primary and secondary education was reportedly cut by AUD 762m, while the higher education ministry’s budget was slashed by 25 per cent, down to $4.2B.
All this at a time when the nation’s future prosperity depends on having a nimble-minded competitive workforce. Frugality has its limits, and these were discovered when Cabinet members bedded down in a luxury hotel more pleasant and convenient than the Legislative Assembly.
It was reasoned that the up-market venue provided “flexibility and proper rest for participants engaged in marathon discussions.” Instead of open debate on the floor of the Parliament, the people’s elected reps pondered in private about giving military men more government jobs.
This was simple news easy to grasp, and it didn’t pass the warung (roadside eatery) test.
Lack of opposition
Nonetheless, the law was passed unanimously as Prabowo’s nationalistic Gerindra (Great Indonesia Movement) Party has embraced the smaller parties by seducing them with offers of spoils, though not the popular Partai Demokrasi Indonesia – Perjuangan the Democratic Party of Struggle. Well, not yet.
Prominent Catholic PDI-P MP Andreas Eddy Susetyo told MWM that people’s purchasing power was shrinking: “We need the economy to be stimulated, not just made more efficient.”
If he’s right, the middle classes will start getting toey as they prospered under Jokowi’s protection of Dr Sri.
The education cuts have angered democracy supporters and student organisations who’ve been protesting in the big cities. The placard-waving turned violent in Malang, an East Java education city. Reports of attacks on public buildings, tyre burnings and students allegedly bashed by security are looking serious. If this worsens with a fatality the anti-dwifungsi protests will have a martyr, and then the lid will be off.
So far, the vocal distress seems to have bothered Prabowo not at all, as he basks in a popularity rating above 80%. In reality, that’s a stat of little importance beyond the aura of the man who is happiest on horseback reviewing supporters, reminiscent of Italy’s Mussolini. That said, a recent incident involving a pig’s head may point to less cordial relations.
Along with Kim Jong Un, he has no opponents with muscle in the media. The North Korean leader scores even greater love.
International investors beware; Dr Sri may yet find the environment unwelcoming.
Duncan Graham has a Walkley Award, two Human Rights Commission awards and other prizes for his radio, TV and print journalism in Australia. He now lives in Indonesia.