Asia: Taxing times for Indonesia’s new finance minister

By:
Eric Ellis
Published on:

Technocrat Bambang Brodjonegoro has plans to turn the country’s state-owned enterprises into regional, if not global, leaders. But the fall in the oil price could quickly scupper his ambitions, unless he can improve Indonesia’s terrible record on tax collection.


Indonesia's new finance minister Bambang Brodjonegoro

When Indonesia’s man-of-the-people president Joko Widodo, known as Jokowi to his millions of followers, swept to power on a populist wave last year, things looked pretty rosy for him and for Indonesia.

Oil was tracking just shy of $100 a barrel, good news for Asia’s only Opec member, while the global prices of the other commodities Indonesia had come to rely on – coal, palm oil, tin, LNG – were holding close to historic highs.

What a difference six months makes. As commodity prices have plummeted – oil by a budget-wincing 50% – so too has  gloom descended over Indonesia, which had once been seen as the near-miracle developing economy fast becoming a middle-income powerhouse alongside the established Brics of Brazil, Russia, India and China.

"To be honest, we are in a bit of a difficult situation," says Jokowi’s new finance minister Bambang Brodjonegoro. "The president...