Indonesian Elections Watch II

By N. Mark Castro

Second of 2 parts


Sri Mulyani Indrawati is an economist appointed to the cabinet as Finance Minister. A hardworking reformist, she often battled with corrupt officials and had a tumultuous political battle with Aburizal Bakrie, Golkar chair and the largest political party in Indonesia. She was appointed the Managing Director of the World Bank Group.

As Indonesian finance minister from 2005 to 2010, Sri Mulyani was known as a tough reformist and was largely credited with strengthening Indonesia’s economy, increasing investments and steering Southeast Asia’s largest economy through the 2007-2010 financial crisis. In 2011, she was ranked as the 65th most powerful woman in the world by Forbes magazine.


Right before her resignation, Indonesia’s legislative body, spearheaded by Golkar Party, has been accusing Sri Mulyani with allegation on crime with the bailout of medium scale Bank Century in 2008.

Critics of the bailout claim it was done without legal authority and without proving a capital injection that was needed to prevent a run on other banks. Bank Century bailout cost the state to suffer a financial lost amounting to 6,7 trillions rupiah ($710 million).

Sri Mulyani has defended the bailout as necessary given the uncertainties in the global economy at the time and denied any wrongdoing. However, criticism about Sri Mulyani’s policy also came from then vice president Jusuf Kalla. In his harshest comments yet on the controversial PT Bank Century bailout, former Vice President Jusuf Kalla denied claims by former Bank Indonesia officials that if the lender had been allowed to fail it would have had a systemic impact on the country’s banking system and economy.

“The Bank Century scandal is a robbery, anyone who supports Bank Century, supports a robber.” Kalla said. Furthermore, all of the nine factions on the House of Representatives special committee agreed that there were suspicious and possibly fraudulent transactions during the bailout period and evidence of money laundering. They all then said they lacked the expertise to do more and called on the National Police and Corruption Eradication Commission (KPK) to take over.

President Susilo Bambang Yudyohono, despite earlier pronouncements of keeping Sri Mulyani, could do nothing to defend her. Powerful tycoon and chairman of Golkar Party Aburizal Bakrie had put much pressure on him, with unfounded rumors that the money was used for President SBY’s re-election.

Employees are fired. Servants are let go.

Sri Mulyani, former professor, respected economist, finance minister and 65th most powerful woman in the world according to Forbes magazine, was let go.

There were widespread speculations that her resignation was due to political pressure, especially from Bakrie, who was known to have enmity toward Mulyani due to her investigation on massive tax fraud in Bakrie Group, her refusal to prop up Bakrie’s coal interests with government funds during the financial crisis, and her refusal to state that the Sidoarjo mud flow, which is widely believed to have been caused by drilling of Bakrie’s company, was a “natural disaster”.

And so, despite the highly idealistic and ambitious plans of People’s Union (SRI) Party to nominate Sri Mulyani to the presidential elections on 2014, it is highly doubtful that the the party could even mount a serious campaign, much less impact the chances of Sri Mulyani into winning.

First, none of the elements in her ouster has changed. The players are still there. She couldn’t fight them off then, despite the support of the administration, and she wouldn’t be able to fight them off in 2014 … unless she runs under the World Bank.


As early as July this year, it was reported that Aburizal Bakrie had his first name put forward for the presidential race in 2014. It was nothing less than a unanimous decision with only one name put forward by delegates at the Golkar Party leaders meeting.

Conspicuously absent were senior leaders, like former vice president Jusuf Kalla, who could have mounted a challenge but didn’t. That in itself is testimony to power wielded by Golkar Chairman, Aburizal Bakrie, among party ranks.


Bakrie’s meteoric rise in his business and political career is one of my most favorite Asian stories.

When I first arrived in 2002, Bakrie’s vaunted wealth had been decimated by faulty loans, mismanaged companies, and dubious partnerships. His net worth was negative.

Coordinating Minister for Economy

Upon his retirement from PT Bakrie & Brothers Tbk, a company founded by his father that enjoyed the protective growth under then dictator President Soeharto, Bakrie was named Coordinating Minister for Economy. The appointment by President Susilo Bambang Yudhoyono was initially viewed with some reservation. Shortly after being named to the cabinet of Susilo Bambang Yudhoyono, Bakrie set in motion a new government policy calling for a 3% reduction of Indonesians living in poverty, by reducing fuel subsidies in exchange for financial support to approximately 6 million people. Bakrie argued the government’s need to gradually increase fuel prices to keep fuel subsidies from busting its budget, while bringing the cost of fuel closer to international levels. By October 2005 and after two price hikes, the cost of fuel increased by 126%.

Coordinating Minister for People’s Welfare

After a reshuffling of the cabinet in 2005, Bakrie was appointed Coordinating Minister for People’s Welfare, still under SBY’s incompetent administration and under the protection of then Vice-President Jusuf Kalla. And when the great 2007 flood happened, this is what the Coordinating Minister for People’s Welfare Aburizal Bakrie had to say:

Not understanding the mindset of flood victims, reader DR sms’d Unspun this morning in a huff. The Minister, he reported, had just told SCTV in an interview about the flood situation that:

“banjir ini di besar besarkan oleh media, seakan akan dunia akan kiamat…lihat saja banyak pengunsi yang masih tersenyum…”

The translation for this gem of a quote is:

“[the impact of] the flood has been exaggerated by the media, as if the world is coming to an end…just look, many of the flood refugees are still smiling.”

Unspun is aghast and speechless at such penetrating insight into the psyche of flood refugees.


But what can you expect? This was also during the infamous —

Sidoarjo Mudflow

In May 2006, the Sidoarjo mud flow began to cause significant devastation and loss of life. The mud flow started near PT Lapindo Brantas, a company owned by the Bakrie family. The devastation was blamed on the company, who stated that the earthquake three days earlier had caused the mudflow, but this statement was “dismissed by numerous international experts”. A number of environmentalist groups demanded that the company be shut down and that the company should be “prosecuted under environmental laws for gross negligence”. PT Lapindo Brantas’ partner firm, PT Medco E&P Brantas, stated that Lapindo had “failed to properly case the drilling hole” and that Lapindo was “liable for damage caused by the deluge of mud”.

A three year police investigation into the incident ended with the case being dropped with no results. A special investigative committee looking into the mudflow as well, headed by a member of the Golkar party, stated that it was a natural disaster, even though little evidence was presented. Indonesian politicians have defended Bakrie, calling the mud flow a “purely natural disaster” and praising him and the rest of the Bakrie family for paying some compensation to the victims.


Financier Nathaniel Rothschild set up Bumi with the Bakries two years ago, when the politically connected family injected Indonesian coal assets into a London investment shell created by the financier. But their relations have since soured, sparking public confrontations, most recently over an investigation into potential financial wrongdoing in Bumi’s Indonesian assets, as coal prices tumble and the London firm’s shares slump.

Reports have it that Rothschild discovered shady financial wizardy while accusing its chairman, Samin Tan, of being complicit in the oppression of its minority shareholders. Currently, Rothschild is in talks with Prabowo in buying out the Bakries.

The Chairman

When his former political benefactor and then Vice-President Jusuf Kalla lost in the presidential elections against SBY, there was blood in the water that Bakrie smelled. Mounting a challenge against the wounded Jusuf Kalla, he wrested the chairmanship in the largest political party in the country, defeating in the process media tycoon and avid Golkar supporter Surya Paloh, Yuddy Chrisnandi and Hutomo Mandala Putra or Tommy Soeharto, son of the former dictator and Golkar founder President Soeharto.

By 2010, he successfully formed and was elected the leader of a majority parliamentary coalition with President Susilo Bambang Yudhoyono’s party and held the nose of the president since then.

For instance, when President Yudyohono wanted to balance the fiscal budget of the country and send a positive message to the world of the country’s fiscal responsibility through a fuel price hike, Golkar, the second-biggest party in Yudhoyono’s fragile coalition, initially supported it.

But a week of demonstrations nationwide — the worst since Yudhoyono took office in 2004 — culminated Friday when thousands of demonstrators thronged the streets of Jakarta as a planned vote on the price increase in the House of Representatives neared. Naturally, Golkar party saw this as an opportunity to flex its political muscle and backed away from an earlier agreement to support the price hike, leaving the president looking weak and his presidency lame.

You can tell who kowtows to whom.

But there is only one word in the entire English language that can best describe Bakrie’s amazing transformation from a down and out businessman to the country’s most powerful non-elected politician.

This is it: MAGICAL.


Other politicians, celebrities, and government officials, of course, are allowed to participate in this political circus. Some names have also emerged among the top, however, let us be reminded of the requirements that most would not be able to fulfill, hence, with slim chances of making it at all.

Some names are

  1. Mahfud MD – Chairman of Indonesian Constitutional Court

  2. Anies Baswedan – Rector of Paramadina University, Jakarta

  3. Dahlan Iskan – Minister of State-owned Enterprise

  4. Wiranto – Retired Army General

  5. Jusuf Kalla – 10th Vice President of Indonesia

  6. Sultan Hamengkibuono X – Sultanate & Governor of Yogyakarta

  7. Akbar Tandjung – Former Speaker of the People’s Representative Council (DPR)

This is why none of the current telenovelas in the country can compete with the ongoing showbiz that is Indonesian politics.

That’s Entertainment.


About Asmartrock

N. Mark Castro is the Southeast Asia Director of JUMP DIGITAL Asia, which is an internationally-awarded and fully integrated digital marketing agency with 5 out of 10 offices in the ASEAN region. He is also the Secretary General of the Philippine Business Club Indonesia, managing and assisting the traffic of investments between the Philippines and Indonesia. He shuttles between Indonesia, Philippines, Myanmar, Singapore, Cambodia, and Australia. The views posted here are his own and do not in any way reflect the views of the companies he represents.

Posted on November 30, 2012, in General and tagged , , , , , , , . Bookmark the permalink. 1 Comment.

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