It cannot be easy to take over the mantle from an illustrious predecessor. And in Indonesia, few names burn brighter than Agus Martowardojo, a former bank chief, finance minister, and governor of Bank Indonesia (BI).
When Martowardojo’s five-year term ended in May 2018, his obvious successor was Perry Warjiyo. A long-standing public servant, Warjiyo spent over 30 years working on policy issues, joining Bank Indonesia as a junior staffer in 1984. He rose through the ranks, gleaning valuable international experience during a stint as executive director of the IMF, where he represented Southeast Asia’s voting group, and was Martowardojo’s deputy from 2013-2018.
Widely seen as shrewd and battle-tested operator, he is often found on the front-line during moments of crisis. Warjiyo was in Jakarta as the Asian financial crisis unfolded, and in Washington in 2008 when the global financial crisis unravelled.
Over the past six years, Warjiyo has worked assiduously, first with Martowardojo, then from a position of supremacy as governor, to combat currency speculation of the rupiah, and to keep inflation under control and growth elevated.
It is a hard trick to pull off in a country that sprawls literally and linguistically (17,500 islands and 700 native tongues) and groans under the weight of 260 million people.
President Joko Widodo, who won re-election earlier this year, spent much of his first term in office improving the country’s woeful infrastructure, building new ports, airports and highways. But some felt the president focused too little on growth, and that the economy, which was ticking along nicely at north of 6% in the early 2010s, lost too much of its get-up-and-go.
Injecting more growth into the economy is a key target for Warjiyo and his team, who want to cut corporate taxes, slash red tape and ease restrictive labour laws. GDP is tipped by the IMF to come in at 5.2% in 2019 and in 2020. The aim is to push that figure closer to 6%.
Another challenge facing Warjiyo as the global economy slows is what to do with rates. In September, the governor cut the central bank’s key rate for the third consecutive month, and relaxed intermediation requirements for banks to encourage lending and stoke growth. These are tough times for everyone, but in Perry Warjiyo, Indonesia has the right man to deal with the gathering storm.