Indonesia’s New Cabinet: A Bolstered Effort towards Growth and Development
Jakarta, Oct 23 — President Prabowo Subianto’s ‘Red-White’ cabinet has been unveiled, marking a seamless transition from the previous administration and prioritizing new ministries and policy continuity despite potential increase in costs, according to investment banks.
Key Changes and Appointments
The cabinet features seven coordinating ministers, 41 ministers, and 56 deputy ministers, with 24 positions held by independents and the rest from seven different parties, forming the country’s largest cabinet since 1966. Key changes include the creation of three new coordinating ministries—food, infrastructure, and social empowerment—as well as the dissolution of the maritime and investment affairs ministry. The Public Works and Housing Ministry has been divided into two ministries.
Challenges and Opportunities
Maybank Investment Bank Bhd (MaybankIB) cautioned that a larger cabinet could increase operational costs, estimating an annual rise in salary expenses by Rp777 billion (US$49.7 million). CIMB Investment Bank noted that Prabowo’s decision to expand the cabinet for political reasons may lead to increased bureaucratic complexity.
Continuity and Change
Prabowo has retained some 17 ministers from former President Joko Widodo’s administration, including Bahlil Lahadalia (Energy), Budi Gunadi Sadikin (Health), and Luhut Binsar Pandjaitan, who now leads the new National Economic Council. He has also appointed trusted associates, including Sjafrie Sjamsoeddin as Defence Minister, Sugiono as Foreign Minister, and Major Teddy Indra Wijaya as Cabinet Secretary.
Focus on Key Issues
Prabowo’s agenda focuses on improving Indonesia’s global standing through poverty alleviation, food and energy self-sufficiency, industrialization, corruption eradication, and a non-aligned foreign policy. Key initiatives include investing in downstream industries, providing free meals and healthcare for schoolchildren and mothers, and building two million homes for low-income families.
Economic Outlook
MaybankIB forecasts Indonesia’s GDP growth of 5.1 per cent in 2024 and 5.2 per cent in 2025, and may improve to 5.5 per cent in 2026, depending on how Prabowo’s initiatives are implemented. CIMB Investment Bank highlighted that flexible state budgeting will help Indonesia avoid setbacks like those in 2015, when GDP growth slowed to 4.8 per cent due to low state spending.
Conclusion
The new cabinet presents a balanced blend of continuity and change, aiming to enhance policy efficiency and build on the achievements of the previous administration. With a focus on key issues and a commitment to addressing human rights concerns, Prabowo’s government is well-positioned to drive growth and development in Indonesia.
Frequently Asked Questions
Q: What are the key changes in Prabowo’s cabinet?
A: The cabinet features seven coordinating ministers, 41 ministers, and 56 deputy ministers, with 24 positions held by independents and the rest from seven different parties.
Q: What are the key initiatives of Prabowo’s agenda?
A: Key initiatives include investing in downstream industries, providing free meals and healthcare for schoolchildren and mothers, and building two million homes for low-income families.
Q: What is the forecasted GDP growth of Indonesia in 2024 and 2025?
A: MaybankIB forecasts GDP growth of 5.1 per cent in 2024 and 5.2 per cent in 2025.