Commentary: The progressive Indonesian leader set to make waves at the World Bank

CANBERRA: The news that Mari Pangestu, one of Indonesias leading economists and policy makers, will be appointed as a Managing Director in the World Bank is a boost for the multilateral system.

The appointment is a good one for Indonesia, for the Asian region, and for the World Bank.



Pangestu has had a remarkable career as an economic adviser and policy maker in Indonesia. She is well-known internationally, across Asia, in North America, and in Australia as well.

In her early years, Pangestu attended primary school in Canberra. At the time her father, Indonesian academic and banker Professor Panglaykim, was working on research projects at the Australian National University (ANU).


She later returned to the ANU to study for a bachelors degree, and then a masters degree in economics. She went on to the United States for doctoral studies with a focus on international trade. In 1986, Pangestu became the first female Indonesian to graduate with a PhD in economics from the University of California, Davis.



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During the next 10 years, Pangestu moved into a leading position in Indonesias most well-known think-tank, the Centre for Strategic and International Studies (CSIS) in Jakarta.

CSIS was a hive of activity in Indonesia and overseas sponsoring dozens of international conferences to discuss Asian regional affairs and the need to support economic reform across the Association of South East Asian Nations (ASEAN) members.

Pangestu and her CSIS economic colleagues played a unique role in pressing for liberalisation within Indonesia. They became the focal point for Indonesias involvement in the Pacific Economic Cooperation Council (PECC) which prepared studies on topics for multilateral and regional trade reform.

The CSIS team was active in promoting Indonesias involvement in the Asian Pacific Economic Cooperation (APEC) forum.

In 1997, Pangestu was appointed Executive Director of CSIS just as the Asian financial crisis was unfolding across South East Asia. Indonesia was hard-hit by the crisis.

The Indonesian rupiah and economy was hard-hit by the Asian financial crisis. (Photo: AFP/Bay Ismoyo)

An immediate challenge for CSIS, which Pangestu needed to manage, was to restructure the work of the organisation and reach out to new partners.

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In 2004, Susilo Bambang Yudhoyono was elected President of Indonesia.

It was clear that Yudhoyono was keen to select a progressive cabinet of ministers with professional qualifications. Indeed, just a few weeks before he became President, Yudhoyono completed his own doctoral degree in economics from the Agricultural University in Bogor near Jakarta.

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One of the professional women he appointed to the cabinet was economist Sri Mulyani Indrawati who later, in 2010, became Managing Director of the World Bank. And another professional woman he appointed was Pangestu who became Minister for Trade.

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The job of Minister for Trade in Indonesia is a difficult one. The portfolio has wide responsibilities which include regulation of key domestic markets as well as managing international trade issues. Pangestu was widely regarded as a highly effective minister who handled the portfolio with skill.

In recognition of her role in government in Indonesia, in 2013 she was awarded an honorary degree by the ANU.


Against this background, as a new Managing Director, Pangestu brings three key insights to the World Bank.

First, her own experience of the practical challenges of day-to-day policy-making on the ground will hopefully keep some of the loftier World Bank pronouncements about international issues grounded in reality.

As a minister with responsibilities for tourism she famously pointed to the need for better toilets for tourists in Indonesia. An emphasis on this practical approach will be welcome in the Word Banks programs in developing countries.

Second, Pangestu will bring to the Bank a vital understanding of the importance of openness – of the need for developing countries to remain as open as possible to the global economy.

A slum in Indonesia. East Asia and the Pacific are still home to the world's biggest population of slum dwellers at 250 million, the World Bank said in a 2017 report. (Photo: AFP)

It is true that openness is a two-edged sword. Openness and globalisation bring challenges as well as benefits.

It is no secret that Pangestu had to deal with both edges of the sword in her seven years as Trade Minister in Indonesia. Read More – Source

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