Yogyakarta – President Susilo Bambang Yudhoyono announced a Cabinet reshuffle on Monday aimed at boosting his government's economic performance against a background of high inflation and unemployment.
The changes to the one-year-old Cabinet saw Boediono, a former finance minister in the administration of President Megawati Soekarnoputri, take over the coordinating minister for the economy post, replacing Aburizal Bakrie, who was given a new assignment as the coordinating minister for people's welfare.
As if to make amends for Aburizal's exit from the economics team, the Golkar Party was awarded two ministerial posts in the economics field, with Fahmi Idris being appointed as the new minister of industry replacing Andung Nitimihardja and newcomer Paskah Suzetta being given the chairmanship of the National Development Planning Board replacing Sri Mulyani Indrawati, who has been appointed minister of finance.
Fahmi's former post of minister of manpower and transmigration has been given to Erman Suparno, the treasurer of the National Awakening Party (PKB) loyal to Abdurrahman Wahid in a move seen as facilitating a reconciliation in the party, and also possibly securing the administration the support of the PKB.
Sri Mulyani, a former International Monetary Fund director, moved to the finance ministry at the expense of Jusuf Anwar.
"I want the Cabinet to be more effective and coordinated," Susilo said in a televised speech from the Yogyakarta presidential palace. The new ministers will be sworn in on Wednesday.
However, nobody was to be allowed to leave feeling hard done by, apparently, as Susilo said he would award consolation posts to Alwi and Anwar, respectively as special envoy to the Middle East and as ambassador in "an important country". But the President said he was still looking for a position that suited Andung.
A reshuffle in the government's economics team had been on the cards ever since the President announced a plan to appraise the record of his aides in October.
The government blamed ballooning fuel subsidy spending as a result of skyrocketing world fuel prices for derailing its economic programs. But analysts said it was the Aburizal-led economics team's limp and tardy responses to a number of worrying trends that spooked the markets.
"The government's public relations have also been lousy. Officials often contradict one another, fail to explain themselves, or project an air of confusion," The Economist said in a September edition.
Susilo said he had completed the planning of the reshuffle on Dec. 1 without any interference from either political parties, individuals or international donors.
"There were no such pressures. Instead, I have to thank the political parties for respecting my prerogatives in this matter," Susilo said. "Neither did I bow to IMF pressure. I did not even think about the IMF."
The President blamed the media for circulating sensational reports and comments about the reshuffle, which he said were "baseless" and condemned as "sparking public confusion".
He said he had completed the planning of the reshuffle on Dec. 1, but it took him four more days to announce it as he had to check the candidates' legal records with the police and the Corruption Eradication Commission, and seek approval from their respective political parties.
Commenting on the new economics team, Bank Mandiri chief economist Martin Panggabean said the President's limited reshuffle was in line with public expectations and his promise to place the right men in the right jobs.
"There is actually nothing unexpected in the reshuffle," he said. "My biggest fear was that the President would split the office of the coordinating economics minister into one for the economy, and one for industry and trade, which would not be good for the economy."
Another economist said he had expected Boediono to also be given the chairmanship of the National Development Planning Board. But he hailed Susilo's decision to unite Boediono, Sri Mulyani and Mari Pangestu in the same team as, he said, all shared "the same ideas on the market economy."
Changes to economics team:
- Coordinating Minister for the Economy: Boediono
- Minister of Finance: Sri Mulyani Indrawati
- Minister of Industry: Fahmi Idris
- Minister of Manpower and Transmigration: Erman Suparno
- State Minister for National Development Planning/National
- Development Planning Board chairman: Paskah Suzetta
- Former chief economics minister Aburizal Bakrie has been appointed the new Coordinating Minister for People's Welfare
- Former chief welfare minister Alwi Shihab will be appointed as special presidential envoy for Middle East cooperation