Indonesian cabinet shuffled as economic blues continue

Indonesian President Joko Widodo departs following a visit to the Indonesia Stock Exchange in Jakarta. Kompas says Jokowi will announce the dismissal (or in one case, job change) of six ministers and swear in their replacements at 1pm this afternoon.

Wellian Wiranto, an economist at OCBC bank, said new chief economics minister Darmin should have a strong understanding of both monetary and fiscal policy as former governor of the central bank and head of the tax office.

Last week, Indonesia’s Central Statistics Agency reported that the economy had grown by 4.67 percent in the first semester of this year – a six-year low and 0.36 percent drop from the same period last year.

A source familiar with Widodo’s reshuffle plan said he was keen to dispel impressions of weak leadership and policy muddle.

His administration has notably failed to kickstart a promised flurry of major infrastructure projects, seen as crucial to attracting foreign investment and raising growth.

Widodo got off to a promising start by cutting huge fuel subsidies that were seen as a drag on growth but since then his performance has generally disappointed investors.

His failure to defend the popular anti-graft agency from attacks by the notoriously corrupt police, during a row over the appointment of a controversial new police chief, severely dented his credentials as a corruption fighter.

Lembong, who learned at Harvard University, replaces Rachmat Gobel, whose service’s late choice to cut the cows import portion from Australia irritated the general population as it prompted taking off hamburger costs.

Luhut Pandjaitan, a former chief of special forces and close aide to Widodo, retained his role as chief of staff in the president’s office and was also appointed as coordinating minister for security and political affairs.

More troubling is word that another veteran PDI-P politician, Pramono Anung, will be joining Jokowi’s cabinent, replacing Andi Widjajanto as Cabinet Secretary.