Another Casualty Of Jakarta's Crony Capitalism

By most accounts, Cacuk Sudarijanto was doing a good job. As head of the government agency charged with cleaning up Indonesia's mass of corporate debt, he had raised $1.2 billion by auctioning off seized assets to foreign investors in a bidding process that earned compliments for its transparency. He had just set in motion the beginnings of a debt restructuring deal for nationalized banks. All in all, Sudarijanto's administration of the Indonesian Bank Restructuring Agency (IBRA) stood in sharp contrast to the persistent stream of bad economic news out of Jakarta. Then came a rude shock: On Oct. 30, Sudarijanto was fired after losing a political turf battle with a close ally of President Abdurrahman Wahid.

Sudarijanto's ouster comes as the latest blow to Indonesia's economic revival. To balance the budget this year, the government was counting on sales of an additional $800 million in IBRA-controlled assets. With the agency in turmoil, any more clearing of assets this year is far from assured. That could add to a budget shortfall approaching $6 billion.