Sri Mulyani

By Aloysius Unditu and Sandrine Rastello

May 5 (Bloomberg) — Indonesia’s Finance Minister Sri Mulyani Indrawati, who has been a candidate to head her nation’s central bank, was selected to be a top adviser to World Bank President Robert Zoellick.

Sri Mulyani will start June 1 as one of the Washington- based bank’s three managing directors, the highest rank under Zoellick. She “brings a unique set of skills and experience to the World Bank Group, from the vantage point of an advancing middle-income country that still faces significant challenges of poverty,” Zoellick said in an e-mailed statement.

The selection highlights the rising global role of Indonesia, the fourth most-populous nation and a member of the Group of 20 emerging and developed countries. It may also affect Indonesia’s economic leadership, as Sri Mulyani was one of two candidates proposed last June to head Bank Indonesia, an appointment stymied by a parliamentary probe led by factions within the governing coalition and members of the opposition.

“The appointment is like a win-win solution,” said Purbaya Yudhi Sadewa, an economist at Danareksa Research Institute in Jakarta. The new job can help Sri Mulyani save “face here in Indonesia. She has been facing a lot of political pressure,” he said.

Stocks fell after the announcement left it unclear who will succeed Sri Mulyani as finance minister. The Jakarta Composite Index fell 1.4 percent to 2,918.57 as of 9:50 a.m. local time, compared with a 1 percent decline for the regional MSCI Asia Pacific index.

Regional Responsibilities

Sri Mulyani, 47, will replace Juan Jose Daboub, who will complete his four-year term June 30, overseeing 74 nations in Latin America, the Caribbean, East Asia and the Pacific, the Middle East and North Africa, the bank said. Daboub is a former El Salvador finance minister.

The last managing director that Zoellick appointed was Ngozi Okonjo-Iweala, a former Nigerian finance and foreign minister, in October 2007. The third managing director, Graeme Wheeler, said in January that he will leave the institution by the end of next month. Wheeler worked at the New Zealand Treasury before joining the Washington-based development bank.

“It is a great honor for me and also for my country to have this opportunity to contribute to the very important mission of the bank in changing the world,” Sri Mulyani said in the statement.

Bank Century

Sri Mulyani and Vice President Boediono, who was the last central bank governor, have been the target of an opposition campaign accusing them of abusing their authority during the 6.7 trillion-rupiah ($740 million) bailout of PT Bank Century in 2008, during the global financial crisis.

President Susilo Bambang Yudhoyono’s administration has been credited with helping bring political stability to Indonesia, which has seen economic growth accelerate and inflation moderate in recent years.

Sri Mulyani “has guided economic policy” for Indonesia, “navigating successfully in the midst of the global economic crisis, implementing key reforms, and earning the respect of her peers across the world,” the World Bank said in its statement, which was released late May 4 Washington time.(source:businessweek.com)