Ali Wardhana
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Ali Wardhana (6 May 1928 – 14 September 2015), more colloquially known as Bung Ali, was an
Indonesian Indonesian is anything of, from, or related to Indonesia, an archipelagic country in Southeast Asia. It may refer to: * Indonesians, citizens of Indonesia ** Native Indonesians, diverse groups of local inhabitants of the archipelago ** Indonesian ...
professor Professor (commonly abbreviated as Prof.) is an Academy, academic rank at university, universities and other tertiary education, post-secondary education and research institutions in most countries. Literally, ''professor'' derives from Latin ...
and
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
, who served as the third Coordinating Minister for Economics, Finance, Industry, and Development of Indonesia from 1983 until 1988 and the 21st minister of finance of Indonesia from 1968 until 1983. He was one of Indonesia's most senior economic policy-makers during the New Order regime of President
Suharto Suharto (8 June 1921 – 27 January 2008) was an Indonesian Officer (armed forces), military officer and politician, and dictator, who was the second and longest serving president of Indonesia, serving from 1967 to 1998. His 32 years rule, cha ...
, being a member of the influential Berkeley Mafia, a group of American-educated Indonesian economists who shaped the Indonesian economy during the New Order. He was the longest-serving Minister of Finance, as well as the fifth longest-serving minister in Indonesian history. He was born on 6 May 1928, in the city of
Surakarta Surakarta (Javanese script, Javanese: , Pegon script, Pegon: ), known colloquially as Solo (Javanese script, Javanese: ; ), is a major List of regencies and cities of Indonesia, city in Central Java, Indonesia. The city adjoins Karanganyar Reg ...
. He studied economics at the Faculty of Economics of the
University of Indonesia The University of Indonesia (UI; ) is a public university in Depok, West Java and Salemba, Jakarta, Indonesia. It is one of the oldest tertiary-level educational institutions in Indonesia (known as the Dutch East Indies when UI was established) ...
(UI) in 1958. Subsequently earned a
Master of Arts A Master of Arts ( or ''Artium Magister''; abbreviated MA or AM) is the holder of a master's degree awarded by universities in many countries. The degree is usually contrasted with that of Master of Science. Those admitted to the degree have ...
in 1961 and a doctorate in economics from the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
. He returned to Indonesia in 1967 and was appointed as the Dean of the Faculty of Economics of UI, replacing
Widjojo Nitisastro Widjojo Nitisastro (23 September 1927 – 9 March 2012) was an Indonesian economist, who was known as the main architect of the Indonesian economy during the New Order regime of President Suharto, serving as Minister for National Development ...
. Less than one year later, he became
Minister of Finance A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfolio ...
in the
First Development Cabinet The First Development Cabinet () is the name of the cabinet of the Indonesian government led by President Suharto. This cabinet was announced on 6 June 1968 and served from 10 June 1968 until 27 March 1973. The composition of this cabinet is not ...
of Indonesian President
Suharto Suharto (8 June 1921 – 27 January 2008) was an Indonesian Officer (armed forces), military officer and politician, and dictator, who was the second and longest serving president of Indonesia, serving from 1967 to 1998. His 32 years rule, cha ...
. As finance minister, he tackled rising inflation, reducing it to 10% in 1969, from a high 650% in 1966. He also liked to conduct unannounced inspections and managed to apprehend corrupt officials and
smugglers Smuggling is the illegal transportation of objects, substances, information or people, such as out of a house or buildings, into a prison, or across an international border, in violation of applicable laws or other regulations. More broadly, soc ...
. Under his leadership, there were two devaluations of the
Rupiah The rupiah (Currency symbol, symbol: Rp; ISO 4217, currency code: IDR) is the official currency of Indonesia, issued and controlled by Bank Indonesia. Its name is derived from the Sanskrit word for silver, (). Sometimes, Indonesians also inform ...
, which occurred in 1977 and 1978. In 1983, he was transferred to the position of Coordinating Minister for
Economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
,
Finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
,
Industry Industry may refer to: Economics * Industry (economics), a generally categorized branch of economic activity * Industry (manufacturing), a specific branch of economic activity, typically in factories with machinery * The wider industrial sector ...
, and Development of
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania, between the Indian Ocean, Indian and Pacific Ocean, Pacific oceans. Comprising over List of islands of Indonesia, 17,000 islands, including Sumatra, ...
in the
Fourth Development Cabinet The Fourth Development Cabinet () was the Indonesian cabinet which served under President Suharto and Vice President Umar Wirahadikusumah from March 1983 until March 1988. The cabinet was formed after Suharto was elected to a 4th term as Presiden ...
, replacing
Radius Prawiro Radius Prawiro (29 June 1928 – 26 May 2005) was an Indonesian economist and politician. Education The son of Suradi Prawiro, a teacher, Radius attended school in Yogyakarta. In 1942, while still at Middle School he became a cigarette vendor. ...
, who took over as finance minister. After leaving the government in 1988, Ali continued to advise the government on its economic and financial policies. Ali died at Medistra Hospital, Jakarta on September 14, 2015. Before he died, Ali had been hospitalized for three weeks. His body was interred at the Tanah Kusir Public Cemetery, instead of the
Kalibata Heroes' Cemetery The National Main Heroes' Cemetery in Kalibata (), colloquially known as Kalibata Heroes' Cemetery ( or ''TMP Kalibata''), is a military cemetery in Kalibata, South Jakarta, Indonesia. It was built in 1953 and opened on 10 November 1954. Bachar ...
.


Early life and education

Ali Wardhana was born on 6 May 1928, in the city of
Surakarta Surakarta (Javanese script, Javanese: , Pegon script, Pegon: ), known colloquially as Solo (Javanese script, Javanese: ; ), is a major List of regencies and cities of Indonesia, city in Central Java, Indonesia. The city adjoins Karanganyar Reg ...
, more commonly known as Solo. His mother died when he was almost five years old. His father, Aliman, would remarry to a woman named Bulik, Ali's aunt. Ali's childhood was mainly spent in Surakarta. Ali moved around several times. Around this time, he reportedly resided in the house of his uncle,
Ali Sastroamidjojo Ali Sastroamidjojo (Perfected Spelling System, EYD: Ali Sastroamijoyo; 21 May 1903 – 13 March 1975) was an Indonesian politician and diplomat. He served in various political and diplomatic roles during the presidency of Sukarno, most nota ...
, an Indonesian
nationalist Nationalism is an idea or movement that holds that the nation should be congruent with the State (polity), state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation,Anthony D. Smith, Smith, A ...
and
statesman A statesman or stateswoman is a politician or a leader in an organization who has had a long and respected career at the national or international level, or in a given field. Statesman or statesmen may also refer to: Newspapers United States ...
, who would go on to become
Prime Minister of Indonesia The Prime Minister of the Republic of Indonesia () was a political office in Indonesia which existed from 1945 until 1966. During this period, the prime minister was in charge of the cabinet of Indonesia, one of the three branches of government ...
. His childhood home has now become a shop. Growing up, Ali did not receive a formal education. Instead, he was
homeschooled Homeschooling or home schooling (American English), also known as home education or elective home education (EHE) (British English), is the education of school-aged children at home or a variety of places other than a school. Usually conducted ...
by his stepmother, Bulik. However, he eventually entered formal schooling in 1930 and was immediately placed in the
fifth grade Fifth grade (also 5th Grade or Grade 5) is the fifth or sixth year of formal or compulsory education. In the United States, this is mostly the last grade of primary school, but for some states, it could be the first year of middle school. Primary ...
of the People's School (now the equivalent of
elementary school A primary school (in Ireland, India, the United Kingdom, Australia, New Zealand, Trinidad and Tobago, Jamaica, South Africa, and Singapore), elementary school, or grade school (in North America and the Philippines) is a school for primary ...
). He went to the
University of Indonesia The University of Indonesia (UI; ) is a public university in Depok, West Java and Salemba, Jakarta, Indonesia. It is one of the oldest tertiary-level educational institutions in Indonesia (known as the Dutch East Indies when UI was established) ...
(UI) and initially studied medicine for a year. However, he withdrew from the faculty, after being cut off by his parents. He continued to study at UI but changed faculties. Choosing the Faculty of Economics, as it provided scholarships. Despite receiving a scholarship, he worked a couple of odd jobs on the side, working at a travel service provider's office. During his time at UI, he was taught by foreign lecturers from the
Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...
about economics, as the only native economist with an economics doctorate, was
Sumitro Djojohadikusumo Sumitro Djojohadikusumo (Van Ophuijsen Spelling System, EVO: ''Soemitro Djojohadikoesoemo''; 27 May 19179 March 2001) was an Indonesian statesman and one of the country's most influential economists. He held ministerial positions under Presiden ...
. However, as tensions grew between Indonesia and the Dutch Government over the
West New Guinea dispute The West New Guinea dispute (1950–1962), also known as the West Irian dispute, was a diplomatic and political conflict between the Netherlands and Indonesia over the territory of Dutch New Guinea. While the Netherlands had ceded sovereignty o ...
, Dutch lecturers began to leave the country. Resulting in UI turning to the
Ford Foundation The Ford Foundation is an American private foundation with the stated goal of advancing human welfare. Created in 1936 by Edsel Ford and his father Henry Ford, it was originally funded by a $25,000 (about $550,000 in 2023) gift from Edsel Ford. ...
for assistance. The Ford Foundation then began a process where students from UI were chosen to undertake overseas studies at the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
. After finishing his studies at UI in 1958, and having a short stint as a lecturer at UI, where he was known to be an expert in the fields of
macroeconomics Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (econ ...
and monetary policy, and was able to explain the material briefly and clearly, he was then sent abroad to continue his studies at the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
. Ali continued his master's education at the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
,
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. With the costs of his education being fully funded through the scholarship he received from the
Ford Foundation The Ford Foundation is an American private foundation with the stated goal of advancing human welfare. Created in 1936 by Edsel Ford and his father Henry Ford, it was originally funded by a $25,000 (about $550,000 in 2023) gift from Edsel Ford. ...
. While in the United States, Ali was particularly interested in fiscal and monetary studies. He managed to complete not only his master's program but also his
doctoral program A doctorate (from Latin ''doctor'', meaning "teacher") or doctoral degree is a postgraduate academic degree awarded by universities and some other educational institutions, derived from the ancient formalism ''Licentiate (degree), licentia docendi' ...
and
Master of Arts A Master of Arts ( or ''Artium Magister''; abbreviated MA or AM) is the holder of a master's degree awarded by universities in many countries. The degree is usually contrasted with that of Master of Science. Those admitted to the degree have ...
degree, while in Berkeley. A year later, Ali received a
Doctor of Philosophy A Doctor of Philosophy (PhD, DPhil; or ) is a terminal degree that usually denotes the highest level of academic achievement in a given discipline and is awarded following a course of Postgraduate education, graduate study and original resear ...
in 1962, with the dissertation title "Monetary Policy in an Underdeveloped Economy with Special Reference to Indonesia" (1962). During his time in Berkeley, he was supported by several friends, including J.B. Sumarlin and
Emil Salim Emil Salim (born 8 June 1930) is an Indonesian economist and former politician. Born of Minangkabau parents, both from the village of Koto Gadang in West Sumatra. His uncle is Agus Salim, one of the founding fathers of the Republic of Indonesia ...
, both fellow future ministers in the New Order.


Finance minister


Appointment

He returned to Indonesia in 1967 and was appointed as the Dean of the Faculty of Economics of the University of Indonesia, replacing
Widjojo Nitisastro Widjojo Nitisastro (23 September 1927 – 9 March 2012) was an Indonesian economist, who was known as the main architect of the Indonesian economy during the New Order regime of President Suharto, serving as Minister for National Development ...
. Less than one year later, Ali Wardhana became
Minister of Finance A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position . A ministry of finance's portfolio ...
in the
First Development Cabinet The First Development Cabinet () is the name of the cabinet of the Indonesian government led by President Suharto. This cabinet was announced on 6 June 1968 and served from 10 June 1968 until 27 March 1973. The composition of this cabinet is not ...
of Indonesian President
Suharto Suharto (8 June 1921 – 27 January 2008) was an Indonesian Officer (armed forces), military officer and politician, and dictator, who was the second and longest serving president of Indonesia, serving from 1967 to 1998. His 32 years rule, cha ...
. Becoming the youngest finance minister in Indonesian history. This has resulted in the media even pinning him the title "menteri ingusan" which roughly translates to "don't know anything minister." In an English-language book entitled "A Tribute to Ali Wardhana, Indonesia's Longest Serving Finance Minister: From His Writing and His Colleagues" published by
Kompas ''Kompas'' () is an Indonesian national newspaper published in Jakarta, founded on 28 June 1965. It is published by PT Kompas Media Nusantara, which is part of Kompas Gramedia Group. The paper's head office is located at the Kompas Multimedia ...
, which was released to commemorate Ali Wardhana's 87th Anniversary, there is one story when President Suharto summoned Ali and asked him to become finance minister. "When Suharto's first cabinet was formed, Pak Harto called me to become Minister of Finance. I immediately came to see him and said that I couldn't become Minister of Finance. Pak Harto looked at me and said "You think I want to be president? I've never been president. You have never been the Minister of Finance. So don't worry, we learn together," said Ali.


Tenure

Early on after his appointment, he was tasked with tackling the high inflation rate, which reportedly caused stress and caused him to not sleep well. At the time, inflation had reached a high of 650% in 1966. He was successful at tackling high inflation, with inflation falling from 650% in 1966, to 112% in 1967, to 85% in 1968, to 10% in 1969 under his tenure. As finance minister, he began a crusade against illegal levies and extortion, together with Minister of State Control of State Apparatus (currently Ministry of State Apparatus Utilization and Bureaucratic Reform) J.B. Sumarli. At the time illegal levies occurred in State Treasurer's Office. J.B. Sumarlin even disguised himself as a staff a work unit named Ahmad Sidik to discover the practice of extortion. After that incident, nobody else dared to collect illegal levies.


Death and legacy

Ali died at Medistra Hospital, Jakarta on September 14, 2015, at 15:30 WIB. Before he died, Ali was treated for three weeks.


Work with government

A brief summary of Ali Wardhana's career is as follows: * 1966: Member of the team of economics experts advising the acting president of Indonesia. * 1968: Minister of Finance in the
First Development Cabinet The First Development Cabinet () is the name of the cabinet of the Indonesian government led by President Suharto. This cabinet was announced on 6 June 1968 and served from 10 June 1968 until 27 March 1973. The composition of this cabinet is not ...
. * 1969: Chair, Monetary Council. * 1973: Minister of Finance in the
Second Development Cabinet The Second Development Cabinet () is the name of the cabinet of the Indonesian government led by President Suharto and Vice President Hamengkubuwono IX. The cabinet was announced on 27 March 1973 and served from 28 March 1973 until 29 March 1978. ...
. * 1975: Deputy Chair, Board of Governors of the
Islamic Development Bank The Islamic Development Bank (, abbreviated as IsDB) is a multilateral development finance institution that is focused on Islamic finance for infrastructure development and located in Jeddah, Saudi Arabia. There are 57 shareholding member st ...
. * 1978: Minister of Finance in the
Third Development Cabinet The Third Development Cabinet () is the name of the cabinet of the Indonesian government led by President Suharto and Vice President Adam Malik. The cabinet was announced on 29 March 1978 and served from 31 March 1978 until 16 March 1983. The (t ...
. * 1983: Coordinating Minister of Economics, Finance, Industry and Development Supervision in the
Fourth Development Cabinet The Fourth Development Cabinet () was the Indonesian cabinet which served under President Suharto and Vice President Umar Wirahadikusumah from March 1983 until March 1988. The cabinet was formed after Suharto was elected to a 4th term as Presiden ...
. * 1988: retired as a senior government minister and remained active as a senior economist in numerous positions.


Honours


National Honours

*: **
Star of Mahaputera Star of Mahaputera (Indonesian language, Indonesian:''Bintang Mahaputera'') is the second highest honorary award awarded by the Government of the Republic of Indonesia, one level below the Star of the Republic of Indonesia. This honorary award was ...
, 2nd Class (4 April 1973) ** Satyalancana Dwidya Sistha


Foreign Honours

*: ** Grand Cross of the
Order of Leopold II The Order of Leopold II is an order of Belgium and is named in honor of King Leopold II. The decoration was established on 24 August 1900 by Leopold II as Sovereign of the Congo Free State and was in 1908, upon Congo being handed over to Belgiu ...
(15 January 1970) *: ** Knight Grand Cross of the
Order of Orange-Nassau The Order of Orange-Nassau () is a civil and military Dutch order of chivalry founded on 4 April 1892 by the queen regent, Emma of the Netherlands. The order is a chivalric order open to "everyone who has performed acts of special merits for ...
(25 August 1971)


Personal life

Ali Wardhana married a woman named Rendasih (d. 2000), nicknamed Renny, who was a
school teacher A teacher, also called a schoolteacher or formally an educator, is a person who helps students to acquire knowledge, competence, or virtue, via the practice of teaching. ''Informally'' the role of teacher may be taken on by anyone (e.g. w ...
from
Bandung Bandung is the capital city of the West Java province of Indonesia. Located on the island of Java, the city is the List of Indonesian cities by population, fourth-most populous city and fourth largest city in Indonesia after Jakarta, Surabay ...
. Together they had four children, Isyana Ika Wardhana, Mahendra Wardhana, Pradjnawita Wardhana, and Pradjanamita Wardhana.


Writings

* Monetary Budget: A Tool for Stabilization or Inflation * Economic and Social Institutions (1966) * Economic Development and the Availability of Special Funds * Statement at the Annual Meeting of the Asian Development Bank (1969) * Concessional Loans and Technical Assistance * Statement at the Annual Meeting of the Asian Development Bank (1970).


Further reading

*
Mari Pangestu Mari Elka Pangestu (: hokkien: Phang Hoei Lan; born 23 October 1956), who is currently serving as the Indonesian President's Special Advisor for International Trade and Multilateral Cooperation, appointed by President Prabowo Subianto on 21 O ...
(editor), 2015. ''A tribute to Ali Wardhana, Indonesia's longest serving finance minister: From his writings and his colleagues'', Penerbit Buku Kompas, Jakarta. * Marzuki Usman, 2017. ''Prof. Dr. Ali Wardhana: Pembaharu Kebijakan Moneter dan Fiskal di Indonesia rof. Dr Ali Wardhana: Reformer of Monetary and Fiscal Policy in Indonesia', PP ISEI, Jakarta.


Notes


References

{{DEFAULTSORT:Wardhana, Ali 1928 births 2015 deaths Ministers of finance of Indonesia Indonesian economists Government ministers of Indonesia Inter-Governmental Group on Indonesia People from Surakarta