Jakarta – President Prabowo Subianto inaugurated Monday members of his Red-and-White Cabinet, who will implement his vision and policies to realize his ambitious 8-percent economic growth target to turn Indonesia into a high-income country by its centenary celebration in 2045.
Familiar faces from former president Joko "Jokowi" Widodo's cabinet along with new appointees were chosen for the new cabinet after Prabowo summoned them for one-on-one interviews at his Kertanegara residence in South Jakarta last week.
They include prominent figures Finance Minister Sri Mulyani Indrawati and her deputies, Suahasil Nazara and Thomas "Tommy" Djiwandono, as well as Coordinating Economic Affairs Minister Airlangga Hartarto.
Investors have perceived Prabowo's economic team roster with positivity, as nothing screams continuity more than that. IDX, the country's benchmark stock market index, rose by almost 3 percent to 7,746 on Oct. 18 compared to Oct. 14.
Meanwhile, the rupiah exchange has strengthened to Rp 15,466 against the US dollar from Rp 15,581 per dollar last week, according to Bank Indonesia data.
While some may think Prabowo is returning the favor to Jokowi with these reappointed figures, we cannot deny the fact that the business community loves predictability and Prabowo has served that well.
Business groups forged strong working relationships with many of Jokowi's cabinet members over the past decade.
Those who have served during the previous administration gained experience, and with familiar faces still in place, Prabowo can hit the ground running.
However, choosing the same cabinet members may not guarantee economic policies will remain consistent in the new administration, as Jokowi and Prabowo have distinct agendas to pursue.
Both the old faces and the new ones must follow the President's directive or perhaps demonstrate a certain amount of "obedience", especially if they want to retain their positions. In fact, in the past some ministers were dismissed from their posts for expressing disagreement with the President's directives.
Furthermore, continuity will only be advantageous if the new administration builds upon positive legacies, while businesses must remain alert to the potential for negative legacies to persist including policy inconsistencies and sectoral egos that impede seamless coordination between different ministries.
Prabowo will need to ensure that the old faces have learned from past mistakes, such as the mandatory local content policy, import restrictions and red tape, among others.
While businesses have been able to remain calm thus far, Prabowo should make sure the rest of the economic team can live up to expectations and keep the momentum going.
There are a total of 48 ministers in President Prabowo's cabinet, along with 56 deputy ministers and several non-ministerial government agencies, the largest cabinet since the New Order and Reform Era. Many, if not most of the cabinet members come from political parties that support Prabowo's government, which economists have warned poses a risk as they have vested interests.
This will present another challenge for businesses to adapt, as the large number may result in a longer and more complex bureaucratic procedure, requiring industry players to engage with a greater number of institutions and individuals.
We hope the President's economic team can quickly familiarize itself with its roles and that its policies will reflect the goal of the new government to provide a favorable investment environment. Too much trial and error will only cost the economy.
It is too early to assess whether the economy will go sideways with the cabinet lineup Prabowo has formed. The ministers, the economic team included, deserve the benefit of the doubt.
The public should give them a chance to prove they can perform in the next few months. If they fail, we hope President Prabowo knows what to do.
Source: https://www.thejakartapost.com/opinion/2024/10/22/new-and-old-economic-team.htm