JAKARTA: Indonesian President Joko Widodo replaced major economic ministers in a Cabinet reshuffle less than a year into his term, after facing criticism for failing to revive growth which is at a six-year low.
Former central bank governor Darmin Nasution was named to the important post of chief economics minister, while prominent private equity executive Thomas Lembong was appointed the new trade minister.
Four other ministers were replaced in the reshuffle yesterday, which followed months of speculation that Joko planned changes after a poor start to his presidency.
“I made this decision in response to the economic situation in the country, which is being affected by the global economic downturn,” Joko said.
Analysts broadly welcomed the news, particularly the decision to appoint Darmin who is seen as a safe pair of hands and a reformer.
“The Cabinet reshuffle is a good move as it shows that Jokowi is bold enough to make changes and replace underperforming ministers,” said Salim Said, from the Indonesian Defence University, using Joko’s nickname.
Joko was inaugurated in October after winning power on a pledge to boost South-East Asia’s biggest economy, which has been slowing in recent years as demand for its key commodities exports decline.
But growth has continued to slide, falling to a six-year low of 4.67% in the second quarter, and the government has been criticised for a series of policy flip-flops and a lack of organisation. Joko’s administration has notably failed to kickstart a promised flurry of major infrastructure projects, seen as crucial to attracting foreign investment and raising growth.
Many ministries face criticism for only spending a fraction of their budgets.
The Jakarta stock market has suffered heavy falls in the past two days since China cut the yuan’s value against the dollar, and the Cabinet announcement failed to halt the slide, with shares closing down over three per cent. The rupiah has also been hard hit, and the currency dropped below 13,800 to the dollar at one point yesterday, its weakest level since July 1998, before closing slightly stronger.
Thomas, who studied at Harvard University, replaces Rachmat Gobel, whose ministry’s recent decision to cut the cattle import quota from Australia angered the public as it led to soaring beef prices.
Also replaced was security minister Tedjo Edhy Purdijatno. Luhut Panjaitan, Joko’s chief of staff and a figure close to the president, was appointed to the post.
Maritime affairs minister Indroyono Soesilo was replaced by Rizal Ramli, while national development planning minister Andrinof Chaniago was replaced by Sofyan Djalil, who moves from the post of chief economics minister.
The only clear political appointee was Pramono Anung, who is from Joko’s party, as Cabinet secretary. — AFP
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