Faisal Maliki Baskoro & Dion Bisara – Indonesia's business community hailed the latest in President Susilo Bambang Yudhoyono's cabinet reshuffle as he seeks to re-energize his government.

The president announced on Monday two major appointments that will directly affect the economy – promoting the chairman of the Investment Coordinating Board (BKPM), Gita Wirjawan, as new trade minister, and the president director of state utility company Perusahaan Listrik Negara (PLN), Dahlan Iskan, to minister for state-owned enterprises.

The appointments cheered financial markets as the Jakarta Composite Index rose 1.8 percent on Monday while the rupiah rose 0.5 percent to 8,845 against the dollar, from 8,893 on Friday.

Both appointees are viewed positively by the business community. Wirjawan, a former investment banker with Goldman Sachs and JPMorgan Chase, has succeeded in raising foreign direct investment by more than 300 percent in the past two years, while Dahlan approached investment in the power sector with a commercial perspective.

Djimanto, secretary general of the Indonesian Employers Association (Apindo), said the move was positive and should spur economic growth. "From our experience, Iskan understands the state enterprises inside and out. His experience as chairman of PLN confirmed that. PLN has performed well under his supervision."

Iskan will replace Mustafa Abubakar, who recently suffered a stroke, while Wirjawan will take over for Mari Pangestu, who is expected to take over the Ministry of Tourism.

One of Wirjawan's main tasks will be to boost exports, which reached $150 billion last year and are expected to increase to $170 billion this year. Exports account for around 28 percent of Indonesia's $700 billion economy.

Analysts and investors in Jakarta shared the same view. "The key thing to note here is that it is very positive given that the new ministers are coming from commercial and professional backgrounds versus being political appointees," said an analyst at a foreign brokerage company.

With Iskan's appointment, local businessmen are more confident that the government's ambitious plan to create six new economic corridors will be realized.

But while the new cabinet appointments are viewed favorably, Sofjan Wanandi, chairman of Apindo, said coordination among the various ministries was the bigger challenge for the government.

"What business wants is seamless coordination within bureaucracy, whether it's within a ministry or between ministries," Wanandi said. "We have had to cope with an inefficient bureaucracy for far too long."

He added that the appointment of 13 new deputy ministers may complicate procedures further and urged the president to give clear job descriptions to all cabinet members.

"I can understand the president wants to back up ministers with professionals. This scheme could succeed as well as fail. Let's see what happened in the next six months," he said.