How Prabowo’s ministerial choices could affect Indonesia’s growth goals and economy

Indonesia’s new president, Prabowo Subianto, has demonstrated continuity and stability by retaining top economic ministers from his predecessor’s administration, but analysts warn that internal cabinet discord could jeopardize his ambitious growth goals for the largest economy in Southeast Asia.

Prabowo reappointed Sri Mulyani Indrawati as finance minister, a position she has held since 2016 – two years after former President Joko Widodo’s first term – and previously from 2005 to 2010 under Susilo Bambang Yudhoyono.

His inclusion in Prabowo’s “Red and White cabinet” is seen as a move to reassure markets that the new president will “continue to implement sound fiscal management and prioritize stability”, it said. Siwage Dharma Negara, Senior Researcher at ISEAS – Yusof Ishak Institute. in Singapore.

“Prabowo chose Sri Mulyani because he needs someone with a proven track record in managing the state budget and who can maintain market confidence in the country’s fiscal management,” Siwage said.

“With his experience, Sri Mulyani is expected to help the new administration deal with various multinational financial agencies to meet Indonesia’s financing needs.”

Sri Mulyani, former managing director of the World Bank, is widely credited with protecting Indonesia’s $1.3 trillion economy during the Covid-19 pandemic and prudently managing the budget despite limited flexibility.