Indonesia's president has given a prominent tycoon a senior post in his coalition, in a sign the political old guard may be regaining influence at a critical time in a power struggle with reformers.
The appointment of Suharto-era businessman Aburizal Bakrie comes at a time of considerable uncertainty over President Susilo Bambang Yudhoyono's commitment to fighting widespread corruption, seen as crucial to attracting investment and spurring economic growth.
On Wednesday, Finance Minister Sri Mulyani Indrawati, the country's top reformer, quit to join the World Bank, in what many analysts consider a setback for the reform drive, in particular of the bloated and corrupt civil service.
Her chief adversary was Bakrie, head of the Golkar Party which is a member of Yudhoyono's coalition; Bakrie has now assumed the role of managing chairman of Yudhoyono's coalition, a senior Golkar official told Reuters on Saturday, confirming local media reports.
"The decision was taken two or three weeks ago," said Theo L. Sambuaga, a deputy chairman of Golkar.
He said that in some situations, the coalition's meetings would be led by Bakrie, for example in the absence of Yudhoyono, the chairman.
"This signals a profound shift -- a resurgence for the fortunes of the Bakrie Group and a major retreat by Yudhoyono from reform," said Kevin O'Rourke, a Jakarta-based political risk analyst.
"It will likely stall institutional reforms needed to sustain growth and Indonesia's democratic transition, including reforms of the civil service and judiciary, as well as anti-corruption efforts and regulatory professionalism."
Indrawati and Bakrie had clashed on several occasions.
The finance minister pushed ahead with reforms that hurt many of the country's old-style businessmen and corrupt officials, for example by clamping down on smuggling and tax evasion.
Bakrie's Golkar Party joined the opposition parties in parliament in pushing for an investigation of Indrawati and another leading reformer, Boediono, over their decision to bail out a small lender during the financial crisis.
Yudhoyono backed both Indrawati and Boediono, and no evidence was found of their wrongdoing.
ReutersLast Mod: 08 Mayıs 2010, 18:45