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Jokowi’s Second Cabinet Reshuffle

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fter months shrouded with rumor, the Indonesian government finally unveils the second reshuffling of the cabinet on Wednesday, July 27th. In the opening remarks to the first Cabinet meeting after the reshuffle, President Joko “Jokowi” Widodo said, “The first thing I want to say, especially to new ministers, there’s no such thing as a vision or mission of a minister, we only have the vision and mission of the President and Vice President. All ministers must follow the vision and mission that we outline and all polices decided during either plenary or limited Cabinet meetings”1. Jokowi tells the new cabinet to coordinate better and told them “no more pointing fingers at each other; if there is a flaw, it is in us all because we are one team”. 2 He further instructed his cabinet members not to make any decisions that would affect the general public before discussing it first in the cabinet.3 Among the twelve ministerial changes announced, the new and former Finance Minister, Sri Mulyani, takes the limelight. Overall, the new cabinet was broadly welcomed by markets. The overall sector of stocks strengthened as a respond of investors to her reinstatement.4 Some examples are the financial sector strengthened

by 1.84% and the manufacture sector strengthened by 2.30%. 5 The Indonesian Stock Exchange (IHSG) increased by 1.16% on that day, while the Indonesian Rupiah strengthened 0.29% to Rp 13.137 to 1 USD the following day.6 She is currently spearheading the Tax Amnesty Programme. It is also hoped that she will continue to tackle the issue of poverty and accelerate economic growth. On the other hand, the appointment of ex-army general, Wiranto, as the

new Minister of Security, Political, and Legal Affairs invites questions among international commentators. He was among officials that are indicted for crimes against humanity in 2003 by a UN Tribunal for the military’s reported violence in East Timor. In a CNBC article titled “Indonesia’s cabinet reshuffle may speed up reforms as Sri Mulyani Indrawati returns”, OCBC economist Wellian Wiranto said “Given the country’s high terror alert, Jokowi [the President’s nickname] likely wanted somebody who knows how to handle things on that front.”. 5 / INA MAGAZINE

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But experts say his inclusion into the President’s administration was a strategic political maneuver. 7

Luhut Binsar Pandjaitan is one of the ministers that had their position shifted within the cabinet. He is the new Coordinating Maritime Affairs Minister after being shifted from the previous position as the Minister of Security, Political and Legal Affairs. In regards to the Giant Sea Wall project, which is a part of the National Capital Integrated Coastal Development (NCICD), he is one of the government people who agrees that the project must continue. In his opinion, there are three fundamental points on why the reclamation in Jakarta Bay has to continue.8 First, the continuation of the reclamation is deemed not only as Jakarta’s interest but also regarded as a national interest. He stated that if it is not continued, the wall built during the former President Soeharto’s reign that sunk 7,5 cm every year will be the only giant sea wall. Jakarta will be left with no protection and sink. Second, it is to anticipate for the declining availability of water sources. Forty6 / 3rd ISSUE July - September 2016

five metres cubic per second can be pumped, which is around 40% of our need. Third, to handle the flooding caused by the sea tide.

If we backtrack to the Presidential electoral debate, Jokowi promised in May 2014 three points.9

One, to focus on strengthening Indonesia’s maritime security. Two, expand the canvas of regional diplomacy to cover the entire region of the Indo-Pacific. Three, project the Indonesian navy as a respected regional maritime power in East Asia.

In June 2014, he announced that he aimed to transform Indonesia into a “global maritime axis” (poros maritim dunia).10 While others suggest Luhut’s new position is because the President has grown annoyed over Luhut’s growing influence, some say that it is because Jokowi never doubts Luhut’s loyalty, he positioned him in the new position as he believes Luhut will deliver outstanding performances. Jokowi can position maritime issues as the cornerstone of his accomplishments that can then be promoted during the 2019 election campaign.12

With the election campaign coming in a couple of years, the President needs a cabinet that is able to adapt to changes and quickly produce concrete result, not one with many different political agenda. Currently, one third of his ministers are associated with political parties, while the rest are professionals. With the appointment of Sri Mulyani, Indonesia has nine women holding positions in the Cabinet for the first time. Besides reorganizing the cabinet

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to produce better results, Jokowi is also consolidating his political position, both of which he can use for the next presidential campaign. With Golkar & PAN joining his coalition, his government is now supported by 69% of the parliament instead of the initial 37% when his term started. In regards to how the new cabinet will work out, we will find out soon enough.

Footnotes: 1 Ina Parlina and Haeril Halim, “New team: President Joko “Jokowi” Widodo accompanied by Vice President Jusuf Kalla, unveils his new aides following a Cabinet reshuffle at the State Palace in Jakarta on Wednesday”, Jakarta Post Special Reports accessed on September 22nd, 2016, http://www.thejakartapost.com/ longform/2016/07/28/whos-the-boss-now. html 2 ibid. 3 ibid. 4 Iwan Supriyatna, “IHSG Terdongkrak Sentimen Positif Penetapan Sri Mulyani sebagai Menteri Keuangan”, Kompas.com, July 27th, 2016 accessed on September 22th, 2016, http://bisniskeuangan.kompas. com/read/2016/07/27/163837826/ihsg. terdongkrak.sentimen.positif.penetapan.sri. mulyani.sebagai.menteri.keuangan?utm_ source=RD&utm_medium=box&utm_ campaign=Kaitrd 5 ibid.

Aprianto Cahyo Nugroho, “Nilai Tukar Rupiah: Pasar Sambut Reshuffle, Rupiah Ditutup Menguat 38 Poin”, Bisnis.com, July 27th, 2016 accessed on September 22nd, 2016, http://market.bisnis.com/ read/20160727/93/569573/nilai-tukarrupiah-pasar-sambut-reshuffle-rupiahditutup-menguat-38-poin 7 Nyshka Chandran, “Indonesia’s cabinet reshuffle may speed up reforms as Sri Mulyani Indrawati returns”, CNBC, July 28th, 2016 accessed on September 22nd, 2016 8 Nabilla Tashandra, “Ini Tiga Alasan Melanjutkan Proyek Reklamasi Teluk Jakarta Versi Luhut”, Kompas.com, September 14th, 2016 accessed September 23rd, 2016, http://nasional.kompas.com/ read/2016/09/14/11110641/ini.tiga.alasan. melanjutkan.proyek.reklamasi.teluk.jakarta. versi.luhut 9 Jokowi-Jusuf Kalla Vision-Mission and Action Program, May 2014 accessed on 7

September 22nd, 2016, http://kpu.go.id/ koleksigambar/VISI_MISI_Jokowi-JK.pdf 10 Heru and Antara, “President-Elcet Jokowi Calls for United Indonesia”, Tempo.co, July 23rd, 2014 accessed on September 22nd, 2016, http://en.tempo.co/read/ news/2014/07/23/055595130/PresidentElect-Jokowi-Calls-for-United-Indonesia 11 Rendi A. Witular and Haeril Halim, “Luhut’s role as ‘prime minister’ annoyed many”, http://www.thejakartapost.com/ longform/2016/07/28/whos-the-boss-now. html; Yohanes Sulaiman, “Jokowi shuffles the deck for presidential push”, August 2nd, 2016 accessed on September 2nd, 2016, http:// www.newmandala.org/jokowi-shuffles-deckpresidential-push/ 12 Yohanes Sulaiman, ibid.

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CABINET RESHUFFLE The following changes were made to Widodo’s cabinet: • Sri Mulyani Indrawati replaces Bambang Brodjonegoro as Finance Minister • Wiranto replaces Luhut Binsar Pandjaitan as Chief Security Minister • Luhut Binsar Pandjaitan replaces Rizal Ramli as Coordinating Minister for Maritime Affairs • Budi Karya Sumadi replaces Ignasius Jonan as Transportion Minister • Ignasius Jonan replaces Arcandra Tahar as Energy and Mineral Resources Minister • Airlangga Hartarto replaces Saleh Husin as Industry Minister • Muhajir Effendy replaces Anies Baswedan as Education Minister • Eko Putro Sandjojo replaces Marwan Jafar as Villages, Disadvantaged Regions & Transmigration Minister • Asman Abnur replaces Yuddy Chrisnandi as Administrative and Bureaucratic Reform Minister • Enggartiasto Lukita replaces Thomas Lembong as Trade Minister • Thomas Lembong replaces Franky Sibarani as Head of BKPM • Bambang Brodjonegoro becomes Head of the National Development Planning Agency (Bappenas)

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resident Widodo decided to rigorously change the composition of his cabinet (his first cabinet reshuffle in August 2015 which ‘only’ involved six changes) in a bid to boost effectiveness of his “Working Cabinet” (in Indonesian: Kabinet Kerja) cabinet Two names stand out particularly: Sri Mulyani Indrawati and Wiranto (who like many Indonesians, goes by one name).

Sri Mulyani Indrawati was Indonesia’s Finance Minister

Sri Mulyani Indrawati replaces Bambang Brodjonegoro as Finance Minister 8 / 3rd ISSUE July - September 2016

from 2005 to 2010 under former President Susilo Bambang Yudhoyono. Sri Mulyani is known as a reform-minded technocrat and this is what most likely ended her political career in 2010 when she clashed with political forces that have major business interests (most notably Golkar’s Aburizal Bakrie). Sri Mulyani and former Vice President, Boediono, were criticized for mishandling a bank bailout case in 2008 (the famous Century Bank case). Due to pressures she moved to the World Bank Group in 2010 where she started to work as a managing director.

Markets must be pleased to see Sri Mulyani return to Indonesia as she enjoys popular support due to her reformmindedness. Today President Widodo announced that she has replaced Bambang Brodjonegoro as Finance Minister, possibly related to weak government revenue in the first half of 2016 (primarily due to weak tax collection). Wiranto is a controversial choice that may evoke

HIGHLIGHT international criticism but could enjoy domestic support. This former army general is linked to human rights abuses in East Timor in 1999 when he headed the armed forces. After the people of East Timor decided to break away from Indonesia in a referendum, the Indonesian army went on a killing spree. Although Wiranto has been accused of human rights abuses, he has always denied such claims and has never faced court. Today, President Widodo confirmed that Wiranto replaces Luhut Binsar Pandjaitan as Indonesia’s Chief Security Minister

Wiranto replaces Luhut Binsar Pandjaitan as Chief Security Minister

Luhut Binsar Pandjaitan replaces Rizal Ramli as Coordinating Minister for Maritime Affairs

However, Wiranto may enjoy domestic support as he is regarded a strong (New Order-trained) leader. Given that China is eager to expand its influence in the South China Sea, occasionally breaching the territorial sovereignty of ASEAN member nations (including Indonesia, near the Natuna Islands), Indonesians may be content to see a strong leader as Indonesia’s top Security Minister. This controversial choice of Widodo could in fact be a sign to both the international community and Indonesian people that he seeks a tougher stance in terms of national security. It also shows that the handling of human rights abuses is not the top priority on Widodo’s agenda (conjuncting to how Indonesia is finally executed several convicted foreign drug traffickers).

Budi Karya Sumadi replaces Ignasius Jonan as Transportion Minister

Muhajir Effendy replaces Anies Baswedan as Education Minister

Eko Putro Sandjojo replaces Marwan Jafar as Villages, Disadvantaged Regions & Transmigration Minister

Asman Abnur replaces Yuddy Chrisnandi as Administrative and Bureaucratic Reform Minister

Enggartiasto Lukita replaces Thomas Lembong as Trade Minister

Thomas Lembong replaces Franky Sibarani as Head of BKPM

This article was written by R.M.A van der Schaar, the Managing Director of Indonesia Investments. He obtained his Masters degree in Southeast Asian Studies from Leiden University (the Netherlands) with a major focus on the society, history and linguistics of Indonesia Airlangga Hartarto replaces Saleh Husin as Industry Minister

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