Sri Mulyani, Indonesia’s reformist Finance Minister, will take up a very senior position at the World Bank in June. The Bank’s President, Robert Zoellick, said that she 'brings a unique set of skills and experience to the World Bank Group'. She does indeed, but Indonesia's loss may be far greater than the World Bank's gain.

Sri Mulyani has shown a rare, perhaps unique, capacity to push reform through in the face of powerful opposition. She has fought these battles with a widely-admired combination of toughness and intellect.

She will be missed as an energetic can-do individual but there is also a sobering wider message about the workings of governance in Indonesia. No doubt there is a variety of reasons behind her departure, but one that must loom large is the highly publicised (and highly politicised) Bank Century case.

Indonesia came through the Global Financial Crisis well. However at the nadir of the crisis, in October 2008 — with the rupiah falling dramatically, large capital outflows, loss of confidence in the government bond market and serious concerns about the knock-on effects of the GFC — Bank Century (a mid-sized bank) was on the verge of failing. To minimize the risk of a general run on banks, Century was taken over by the government. The process was a smooth and well-ordered operation in which Sri Mulyani and the then-central bank governor Dr Boediono (now Indonesia's Vice President) were the key decision-makers.

Six months later, the game changed. Some factions in Indonesia's boisterous Parliament decided that this rescue was an opportunity to further their sectional interests, aiming to remove the Minister and the Vice President. This was strongly supported by business interests who had been adversely affected by Sri Mulyani’s successful tax collection efforts. For four months a Parliamentary inquiry tried to find fault in the rescue operation, but failed. Then the Corruption Commission weighed in, and is still subjecting the Minister and Vice President to questioning. There must be a point when even the most dedicated official says 'enough is enough'.

This unfortunate series of events is a victory for the dysfunctional elements in the Parliament. It has wide ramifications and threatens to damage the process of good government. What minister or bureaucrat will now take decisions in difficult circumstances, knowing that they might have to face this sort of chaotic inquisition?

It is true that the democratic process, everywhere, can be uncaring and unfair to individuals. It's also true that rescuing banks always leaves the decision-makers open to criticism: the more successful the rescue, the easier it is to criticise it as unnecessary. Tim Geithner, US Treasury Secretary, had to bear harsh criticism from Congress for the US rescue operations. Thus those who play this game need to be street-smart and thick skinned. Sri Mulyani seemed to have these qualities, more than most. She will doubtless do a good job in Washington, but she will leave a yawning gap at the top of government in Indonesia.

Photo by Flickr user London Summit, used under a Creative Commons licence.