Louise Williams, Jakarta – President Soeharto's new Cabinet signals a retreat to personalised politics with the appointment to key portfolios of his powerful daughter, Siti "Tutut" Hardiyanti Rukmana, his golfing mate, timber baron Mohamad "Bob" Hasan, and the return of several ministers linked to recent corruption scandals.
The new cabinet, to be sworn in today, is likely to cause further dismay among international investors at a time when Indonesia is facing demands from the International Monetary Fund to prove its commitment to economic reforms or risk the $US43 billion ($63 billion) bailout package for its ailing economy.
But the new line-up, strong on economic nationalists and vested interests, sends confusing signals about the Government's commitment to economic reforms which threaten the personal business interests of the president's entrepreneurial children and the political elite.
Mr Hasan, a former driver who ranked recently by Fortune magazine as the world's 107th richest man with assets of about $US3 billion, has been handed the key trade and industry portfolio. The president's daughter is Social Affairs Minister.
Much of Mr Hasan's fortune has been made in the protected timber industry. His control over the Apkindo plywood export cartel allowed him to collect fees for all transactions in a multi-billion dollar industry. Apkindo was abolished in February under the IMF package, but then plywood producers were instructed to pay millions of dollars to fund a "statistics service". The fees were dropped following international publicity.
Mr Hasan, who changed his name from The Kian Seng after converting to Islam, is the first ethnic Chinese to be appointed to Cabinet. Some commentators said the move could be used to diffuse resentment of the wealthy Chinese minority. But Mr Hasan, who regularly plays golf and goes deep-sea fishing with the President, could just as easily be viewed as a Soeharto "crony".
Gone meanwhile are the US-educated "technocrats" who engineered Indonesia's high economic growth of the past 30 years. The key portfolio of Finance has gone to Mr Fuad Bawazier, a well-qualified economist but known to be close to the first family.
"The Cabinet will be challenged to do a lot of economic restructuring, and the key question is can they do it?" said economist Mr Mari Pangestu. "Can they do it for the national interest, rather than self-interest or the interest of the few?
"We have a changing of the guard in terms of the exit of the long-term technocrats and they have been replaced a group who are academically qualified but are untested as to whether they can function without a conflict of interest."
Political scientist Ms Dewi Fortuna Anwar said both Mrs Rukmana and Mr Hasan may be challenged immediately to prove their commitment to reforms, even those which touch their own businesses, as the IMF team assessed progress ahead of a decision on releasing the next $US3 billion of the bailout fund. "People will be suspicious of Tutut and Hasan, so their appointment is a brave move, and they will be put on the spot straightaway because people will be quick to point the finger," she said.
Economist Mr Didik Rachbini characterised the line-up as a "retreat" by the leader. "President Soeharto is now talking about self-reliance and we are not yet sure if this means economic nationalism, which could set us back decades in terms of political culture."
Mr Soeharto has surrounded himself with loyalists in key security portfolios: General Feisal Tanjung as Co-ordinating Minister for Defence and Security, armed forces chief General Wiranto as Defence Minister, and retired General Hartono, a close friend of Mrs Rukmana, as Home Affairs Minister. Mr Ali Alatas remains as Foreign Minister.
The Japanese Prime Minister, Mr Ryutaro Hashimoto, who spent 2 hours in talks with Mr Soeharto yesterday, said later that Indonesia needed to take "courageous decisions" to resolve its economic crisis, and he was convinced Mr Soeharto would. Neither side gave details of the talks.