Sri Mulyani's Resignation Could Disrupt Energy Transition Agenda: Economist

TEMPO.CO, Jakarta - Rumors have recently mounted that Finance Minister Sri Mulyani Indrawati would resign from President Joko Widodo or Jokowi's cabinet. Economist and Director of the Center of Economic and Law Studies (Celios), Bhima Yudhistira, pointed out the risks.

He assessed that Indonesia’s energy transition agenda could be disrupted if the minister steps down from her post. The government could also face difficulties in securing international funding if this happens.

“Funding for the energy transition from the JETP (Just Energy Transition Partnership) scheme, which is currently being negotiated, could be stalled. It could even be canceled if Sri Mulyani steps down,” Bhima told Tempo on Thursday, January 18.

He believed that international trust in Indonesia largely depends on the credibility of the former World Bank managing director. “If Sri Mulyani resigns, consequently, it will be difficult for us to obtain new loans and investment cooperation,” said Bhima. “Investors will turn to other countries with more credibility.”

News of Sri Mulyani's plans to leave Jokowi's cabinet was revealed by a senior economist at the University of Indonesia (UI), Faisal Basri. “I heard that Bu Sri Mulyani is the most ready to resign,” Faisal said at the Political Economic Outlook 2024 event, which was broadcast via a YouTube channel of Progresif Idn on Monday, January 15.

Meanwhile, Presidential Special Staff Coordinator Ari Dwipayana assured that the cabinet would remain solid in assisting Jokowi in administering the government until the end of his term. “Just ask the parties who raised this issue,” Ari said in Jakarta on Thursday, January 18.

Previously, money market analyst Lukman Leong said that the rupiah's movement is generally still dominated by external factors. “However, Sri Mulyani's resignation will hurt the rupiah,” he told Tempo on Thursday, January 18.

Lukman said this was especially the case if the issue was related to the 2024 presidential election, which is feared to cause political divisions. “There are concerns that the poor political climate will make it difficult for the next government to formulate an economic agenda,” said the DFCX Futures analyst.

RIRI RAHAYU | ANTARA | AMELIA RAHIMA SARI

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