Indonesia's Self-Inflicted Economic Wounds Multiply

Indonesia’s hard-won reputation for stability is under great strain. In the decades after a financial collapse re-ordered the way the country was run, economic decision-making has been fairly predictable and financial managers considered credible. This has been a big plus for an emerging market that’s often buoyed by bullish projections about its future role in the global economy, but sometimes struggles to get out of its own way.

This durability is being tested. While Finance Minister Sri Mulyani Indrawati’s insistence on Tuesday that she wasn’t leaving was greeted with relief, not everything should rest on her shoulders. Quality ministers matter, but the underlying approach to budgets and interest rates, and the messages received by investors, matter more. If calibrated correctly, policies ought to survive the personnel cycles that are a natural feature of governments everywhere. Will Indonesia be that fortunate?