In­done­sian pres­i­dent reshuf­fles Cab­i­net to boost econ­omy

The China Post - - LIFE GUIDE POST - BY NINIEK KARMINI

In­done­sia’s pres­i­dent an­nounced a Cab­i­net reshuf­fle Wed­nes­day, re­plac­ing key eco­nomic min­is­ters with the aim of speed­ing up in­fra­struc­ture spend­ing to re­vive sput­ter­ing growth and sta­bi­lize the slid­ing ru­piah.

The Cab­i­net shake- up comes amid in­creas­ing public dis­sat­is­fac­tion with the lag­ging per­for­mance of In­done­sia’s econ­omy since Jokowi took of­fice nearly ten months ago. South­east Asia’s largest econ­omy, home to more than 250 mil­lion peo­ple, grew 4.7 per­cent in the sec­ond quar­ter, the slow­est pace since 2009.

Four min­is­ters lost their jobs and two were ro­tated to less im­por­tant po­si­tions, end­ing weeks of spec­u­la­tion in In­done­sia about the pos­si­ble changes.

Pres­i­dent Joko “Jokowi” Wi­dodo chose for­mer cen­tral bank gover­nor Darmin Na­su­tion to be­come Indo- ne­sia’s new co­or­di­nat­ing min­is­ter for the econ­omy, re­plac­ing So­fyan Djalil.

Djalil has be­come the na­tional de­vel­op­ment plan­ning min­is­ter, re­plac­ing An­dri­nof Cha­ni­ago. Jokowi picked Thomas Lem­bong as trade min­is­ter.

Jokowi also ap­pointed cur­rent Pres­i­den­tial Chief of Staff Luhut Pan­jai­tan as the new co­or­di­nat­ing min­is­ter for pol­i­tics, law and se­cu­rity and a prom­i­nent economist Rizal Ramli as the co­or­di­nat­ing mar­itime min­is­ter.

He did not speak to media af­ter of­fi­cially inau­gu­rat­ing the new min­is­ters at a cer­e­mony in the pres­i­den­tial palace.

Pres­i­den­tial spokesman Teten Mas­duki said in a state­ment that Jokowi made the changes be­cause he wanted a more ef­fec­tive and co­or­di­nated Cab­i­net to re­spond to the chal­lenges fac­ing In­done­sia econ­omy.

Jokowi wants to “speed up the re­al­iza­tion of the na­tional de­vel­op­ment pro­grams in or­der to im­prove peo­ple’s wel­fare,” he said.

Public dis­sat­is­fac­tion with Jokowi’s ad­min­is­tra­tion soared af­ter it raised the price of fuel weeks af­ter he took of­fice on Oct. 20 be­cause the gov­ern­ment couldn’t af­ford to main­tain heavy sub­si­dies. The in­crease hit wal­lets and sparked a surge in prices for other goods.

Jokowi’s move to bring Na­su­tion, who is re­garded as highly com­pe­tent, into the cab­i­net will likely cheer mar­kets and an­a­lysts. He re­tired as Bank In­done­sia gover­nor in 2013 and has held im­por­tant po­si­tions in the fi­nance min­istry that in­cluded di­rec­tor gen­eral of the tax of­fice and head of the cap­i­tal mar­kets reg­u­la­tor.

Fad­hil Hasan, a se­nior economist at In­sti­tute for De­vel­op­ment of Eco­nom­ics and Fi­nance, said the eco­nomic team’s sta­tus as a “tar­get of public at­tack” made it par­tic­u­larly vul­ner­a­ble for re­place­ment. A fresh eco­nomic team could as­suage public anger about the gov­ern­ment’s fail­ure to ad­dress the slow­down, he said.

Na­su­tion’s re­place­ment of Djalil also re­duces Vice Pres­i­dent Jusuf Kalla’s in­volve­ment in eco­nomic pol­icy. Djalil had strong links to Kalla who clashed with Jokowi over eco­nomic pol­icy.

Mean­while, In­done­sia’s cur­rency, the ru­piah, has fallen 8.5 per­cent against the U. S dol­lar since the be­gin­ning of 2015. It lost fur­ther ground on Tues­day and Wed­nes­day af­ter China an­nounced a de­val­u­a­tion of its tightly con­trolled yuan.

Bank In­done­sia’s deputy gover­nor Mirza Adityaswara said that ru­piah was “un­der­val­ued.”

He said the re­cent move­ment was pri­mar­ily a re­ac­tion to China’s an­nounce­ment which af­fected cur­ren­cies across Asia.

“We be­lieve that this will be tem­po­rary,” Adityaswara said. “We see that the ru­piah is cur­rently un­der­val­ued.”

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