Sri Mulyani, the current Minister for Finance, is unlikely to be appointed to Prabowo’s cabinet because of her opposition to key Prabowo spending proposals.
Prabowo Subianto and Gibran Rakabuming Raka won the 2024 presidential election held on 14 February 2024 in a landslide. While serious concerns have been raised about the possibility of vote buying and a lack of neutrality from national and local-level state officials, it is expected they will be inaugurated as Indonesia’s new president and vice president on 20 October 2023.
Political attention is now shifting to the transition from outgoing President Joko “Jokowi” Widodo to Prabowo with an unofficial list of the new president’s cabinet leaked on social media two weeks ago. While the Prabowo-Gibran team has denied this was an official list prepared by the team, many analysts consider it credible, as it contains political party and business figures who backed Prabowo’s presidential bid and the names of long-time Prabowo allies.
Most interestingly, however, the leaked cabinet list and subsequent international news reports, include very few names who could be identified as technocrats – non-political professionals (academics, diplomats, or civil servants) who are appointed to cabinet based on their expertise and professional capabilities rather than their political or business ties.
Indonesia’s technocratic tradition
Ministers from technocratic backgrounds have been appointed to each Indonesian cabinet since the beginning of Soeharto’s New Order regime in 1966. This policy has been continued by each post-Soeharto government, especially for key ministries like finance and foreign affairs, to signal to international observers these are professionally-run ministries making evidence-based decisions rather than being driven by politics.
For nearly 16 years, the finance ministry has been led by Sri Mulyani Indrawati. Like many of her immediate predecessors, Sri Mulyani is a macroeconomist affiliated with the Faculty of Economics at the University of Indonesia.
Her appointment – like the appointments of her technocratic predecessors – has provided assurance to multinational corporations, global capital markets and international financial institutions, like the World Bank and the International Monetary Fund (IMF). It tells them that the Indonesian economy is being guided by economic experts who will put in place sound macroeconomic and financial management practices, instead of politically motivated state spending that, if left unchecked, might expose the country to unsustainable levels of debt and hyperinflation.
Sri Mulyani is widely expected to be replaced when the new administration takes office because she has long expressed her strong disagreement to measures endorsed by Prabowo, including the promotion of populist economic policies that would cost billions of dollars to the taxpayer. One example is a proposed free school lunch programme for all Indonesian school children, expected to cost Rp 400 trillion (US $25.4 billion).
Several other names have emerged as a potential new finance minister, including Budi Gunadi Sadikin, the current Health Minister; Kartika Wirjoatmodjo, the current Deputy Minister of State for State Owned Enterprises; and Mahendra Siregar, Head of the Financial Services Authority (OJK). Of the three, only Mahendra has a resume that reflects a professional technocratic career – he started his career as a diplomat and was later appointed as a Deputy Minister at both the foreign affairs and finance ministries and is a former ambassador to the United States.
However, both Budi and Kartika do come from finance backgrounds, starting their careers in the private sector. Both later headed up Bank Mandiri, Indonesia’s largest state-owned bank. Both are also closely connected with Erick Thohir, the current Minister for State Owned Enterprises and chair of Jokowi’s 2019 re-election campaign. A billionaire businessman, Erick was considered a prospective Prabowo vice presidential nominee until Gibran was selected in October 2023.
Political appointees abroad
A similar situation can be seen for the foreign affairs ministry, where the likely appointment of a business tycoon, Rosan Roeslani, as foreign minister would break a long running convention that Indonesian foreign ministers should be appointed from the ranks of career diplomats.
During this timeframe, only two foreign ministers – Mochtar Kusumaatmadja and Alwi Shihab – came from non-diplomatic backgrounds. Since Alwi left the ministry in 2001, every Indonesian foreign minister has come from the ranks of career diplomats. Retno Marsudi, the current foreign minister, has served a decade in the position and has a total of three-decades’ service with Indonesia’s diplomatic corps.
In contrast, her rumored replacement Rosan Roeslani was the former chairman of the Indonesian Chamber of Commerce (Kadin) and chair of Prabowo’s campaign team. Like Erick, Rosan is also a businessman with strong political connections. His company Recapital first started as a financial services and advisory firm, and over the next two decades, expanded its operations into mining, infrastructure, property, media and communications.
Rosan was appointed as Indonesian Ambassador to the United States in October 2021. However, he left the posting in July 2023, after his appointment as Deputy Minister for State-owned Enterprises – a position he relinquished three months later when he was appointed as the Prabowo-Gibran team’s chief fundraiser.
Other names that have emerged as prospective foreign affairs ministers include Fadli Zon, a senior Gerindra member of the DPR and long-time Prabowo confidant, and Meutya Hafid, a legislator from Golkar and chair of the DPR Defence, Foreign and Information Committee. So far, no senior diplomats have emerged as potential nominees. This means the new minister will likely be a well-connected businessman or career politician.
The cost of political appointments
While the leaked cabinet list is only – at best – the campaign team’s preliminary thoughts on who would be suitable to head different ministerial portfolios when the new president is inaugurated in October 2024, it implies the era of technocrats leading top ministries, like finance and foreign affairs, may be over. It would appear they may be replaced by politicians or business-oriented ministers with strong political connections with the upcoming presidential administration.
Should these business figures be appointed into these ministerships, they could also further marginalise the civil servants and diplomats who have traditionally occupied senior positions in these ministries as well. For instance, it seems likely more businesspeople will be appointed as ambassadors to key foreign postings like the United States, the European Union and China, a trend that began under Jokowi.
The rationale offered for this by Jokowi was to have Indonesian senior diplomats focusing more on economic diplomacy and bringing more foreign investment into the country. However, such appointments naturally come at the expense of the career diplomats who have traditionally filled these key ambassadorship positions.
More consequentially though, political appointments could mean future government policies will be made in a way that ensures political loyalty to the future president rather than on a sound evidence basis. Over time, this will erode the credibility of government institutions and their policies.
If the next finance and foreign affairs ministers are indeed chosen from political instead of technocratic backgrounds, both ministries could lose their long-standing reputation as professionally run ministries. Over time, this could mean an eroding confidence in the Indonesian state’s financial management capability and its international reputation as a reliable investment, trade and strategic partner.
