Nov 23, 2009
Finance Minister Sri Mulyani Indrawati (pictured) and Vice President Boediono, who was central bank governor at the time, were involved in approving the bailout of Bank Century
AKARTA – AN INDONESIAN government bailout of a small bank last year during the financial crisis was criticised by the Supreme Audit Agency on Monday and could now become a political issue embroiling two top reformers.

Finance Minister Sri Mulyani Indrawati and Vice President Boediono, who was central bank governor at the time, were involved in approving the bailout of Bank Century.

As President Susilo Bambang Yudhoyono’s top technocrats, both have run up against the political and business elite because of their push for reform and an anti-corruption drive. Both are now in danger of being distracted by further questioning and parliamentary procedures, particularly if there are calls for further investigations into the bailout.

Parliament, which requested the audit into the 6.7 trillion rupiah (S$980 million) bailout of Bank Century, may now demand that the president gives an explanation.

Both Mr Boediono and Ms Indrawati have denied any wrongdoing, saying that the bailout was necessary to maintain financial market stability and ensure investor confidence during the global credit crisis last year.

‘This is a local issue being politicised. If Boediono and Sri Mulyani are being cornered because of this, it can disappoint markets because both of them are icons of market reforms,’ said Fauzi Ichsan, economist at Standard Chartered Bank.

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