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Bahana: Cabinet Reshuffle, Return of the Queen


Photo by Cabinet Secretary

JAKARTA (TheInsiderStories) – President Joko “Jokowi” Widodo’s decision to reshuffle his cabinet composition shows that he is fully in charge, Bahana Securities said in its investors’ note.

It said the appointment of Sri Mulyani Indrawati, current managing director of the World Bank Group and former finance minister, seems to have been welcome by the market.

“The long-awaited cabinet reshuffle reveals that Jokowi is fully in charge of Indonesia’s political arena. This is due to two reasons, but first and foremost is the display of Jokowi’s ability to bring back Sri Mulyani (SM),” it said.

It said the ex-managing director of the World Bank, who has not been in good standing with Jusuf Kalla, the vice president, due to the past Bank Century case.
“The return of Sri Mulyani is the biggest surprise for the market and is positive due to her credibility and attitude towards good governance during her tenure as Finance Minister back in 2007-2010,” Bahana said.

“It is worth noting that Jokowi’s directive for Sri Mulyani in her new post is to ensure that Indonesia’s tax amnesty program would be successful. This is a market positive, in our view. The second tell-tale sign of Jokowi’s political strength is his skill in retaining Rini Soemarno as SOE minister, in effect defying Megawati’s wishes for her removal,” it noted.

The President made 13 post changes with 4 rotations and 9 new faces of its cabinet.

In this second cabinet reshuffle, he appointed 9 new faces with changes in 12 ministerial posts as well as the Head of the Coordinating Investment Board.

Four ministers were rotated with Luhut Panjaitan becoming Maritime Minister, Bambang Brodjonegoro as Minister of Development Planning, Sofyan Djalil becoming Minister of Agraria, and Thomas Lembong heading the Investment Coordinating Board. Other than that, Wiranto, chairman of Hanura (supporter of Jokowi), is now the Political Affairs Minister (replacing Luhut), with Asman Abnur as Minister of Bureaucracy, Airlangga Hartanto as Minister of Industry, Budi Karya Sunadi as Minister of Transportation, Eko Putro Sanjoyo as Minister of Village, Archandra Tahar as Minister of Energy and Mineral Resources, Muhajir Effendi as Minister of Education and Franky Sibarani as Vice Minister of Industry.

Worth watching would be the change of Thomas Lembong to an Investment Coordinating Board position from a Minister of Trade position, being replaced by Enggartiasto Lukita, Nasdem politician, ex Head of REI (Real Estate Indonesia).

Accommodation of political interest to enhance Jokowi’s strength: GOLKAR, HANURA, NASDEM and PAN have new ministers with an additional seat for GOLKAR while HANURA lost 1 seat, Bahana noted.

The new politicians are: (a) Airlangga Hartanto (GOLKAR) as Minister of Industry, (b) Wiranto (HANURA) as Minister of Coordinating Political, Legal and Security, (c) Enggartiasto Lukita (NASDEM) as Minister of Trade and (d) Asman Abnur (PAN) as Minister of Apparatus and Bureaucracy. With the new composition, 16 ministers (40% of the 42 cabinet members, of which 34 are ministers) belong to political parties while the remaining 60% are professionals. Overall, this accommodation of political interest should enhance Jokowi’s strength, and allow for policies and reforms to be passed at the parliament level. Note that Jokowi’s coalition currently controls 80% of total seats in the House. (*)

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Source: The Insiderstories
Bahana: Cabinet Reshuffle, Return of the Queen

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