Jokowi pins reform hopes on economic team

JAKARTA. President Joko “Jokowi” Widodo has appointed professionals to strategic posts on his economic team, providing a breath of fresh air for investors seeking the implementation of economic reforms in Indonesia amid challenges faced by the global economy.

The economic team that will steer Southeast Asia’s largest economy in the next five years comprises Coordinating Economic Minister Sofyan Djalil, Finance Minister Bambang Brodjonegoro, Energy and Mineral Resources Minister Sudirman Said, Trade Minister Rachmat Gobel and National Development Planning Board (Bappenas) head Adrinof Chaniago.

Appointees who have raised eyebrows due to their political affiliations are Industry Minister Saleh Husin, a businessman-cum-politician from the Hanura Party, as well as State-Owned Enterprises Minister Rini Soemarno, a close aide to Megawati Soekarnoputri, the chairwoman of the Indonesian Democratic Party of Struggle (PDI-P), which backed Jokowi’s presidency.

Jokowi’s economic lineup, nonetheless, is still seen by analysts as superior to the choices of his predecessor Susilo Bambang Yudhoyono, who picked politicians for his strategic economic posts such as coordinating economic minister, as well as energy and mineral resources minister.

Jokowi has inherited an economy in which growth, at 5.1 percent in the second quarter, has slowed to its lowest level in four years, with limited fiscal space to boost growth amid the prevailing global uncertainties.

“There are a few names that may be deemed less than ideal, but overall this is a solid set of ministers,” said John D. Rachmat, an analyst with Mandiri Sekuritas. “A good beginning. Much remains to be done, but we believe the stock market will react positively to this solid start.”

Jokowi has said that economic growth of 7 percent is attainable, with top-priority programs including reducing the budget-straining fuel subsidy and being self-sufficient in staple foods such as sugar, corn, rice and wheat flour within three to four years.

Bambang, who will lead the Finance Ministry, was known as an outspoken and no-nonsense official during his time as deputy finance minister in the previous administration. Acting as his deputy is Mardiasmo, formerly the chief of the Development Finance Comptroller (BPKP).

Jokowi fulfilled his promise to appoint a professional to lead the graft-ridden Energy and Mineral Resources Ministry, which will be led by Sudirman Said, the president director of state-owned weapons maker PT Pindad and a former expert staffer at state-owned oil and gas firm PT Pertamina.

Sudirman was a person with integrity, excellent leadership skills and a clean track record, said Brawijaya University economist Ahmad Erani Yustika, who pointed to the new minister’s active role in the Indonesian Transparency Society (MTI) in the past.

Meanwhile, the appointment of Rachmat as the trade minister won praise from economists, though the same could not be said for Rini and Saleh who were chosen as state-owned enterprises minister and industry minister, respectively.

Rachmat is a successful businessman known for his tough management style in leading PT Panasonic Gobel Indonesia.

“Rachmat Gobel meets the criteria [of a good minister] and he has a great deal of experience in trade, such as in the creation of new markets,” argued Latif Adam, an economist with the Indonesian Institute of Sciences (LIPI). “One of our major trade challenges will be to diversify export products and destinations, and I believe he can attain higher goals for trade.

However, Latif gave a low score for the industry minister post, which was filled by politician Saleh, a businessman with a relatively unknown track record, besides his rags-to-riches story of coming from Rote Island in East Nusa Tenggara (NTT) to build a successful business empire in Jakarta.

“We have so many weaknesses in our industry and such a strategic post should have been filled by a more capable figure,” Latif said. Without the support of the industrial sector, the downstream sector might not accelerate as fast as expected, he added. (Putera Satria Sambijantoro, Linda Yulisman)