Indonesia’s next president, Prabowo Subianto, will reappoint Finance Minister Sri Mulyani Indrawati to his new cabinet, making her the first person to serve as finance minister under three different presidents.
The 62-year-old was one of dozens of ministerial candidates who met with Mr Prabowo at a private residence in South Jakarta yesterday evening to confirm the candidates ahead of the October 20 inauguration ceremony.
After the meeting, Sri Mulyani confirmed the appointment to reporters. “He asked me to serve as finance minister again,” Sri Mulyani said, as reported by The Jakarta Globe.
He said during his “long and extensive discussions” with Prabowo, the president-elect made clear some of his economic priorities, particularly his desire to strengthen the state’s finances with an eye toward ambitious spending plans. Ta.
“As my team prepares the 2025 budget during this transition period, we have had several discussions about the state budget. It was important for me to understand the priorities of the next president and vice president-elect. ” said Sri Mulyani. “We regularly consulted with each other and discussed strategies to strengthen the Treasury and national finances to support his programs.”
The announcement confirmed reports circulating this week that Prabowo was preparing to retain Sri Mulyani, who served as director general of the International Monetary Fund and managing director of the World Bank. She is also one of Indonesia’s longest-serving finance ministers, having held the position for long periods under both President Susilo Bambang Yudhoyono and outgoing President Joko Widodo.
During this time, Sri Mulyani gained considerable respect in the international community, particularly for his role in reforming Indonesia’s chaotic tax system and guiding the country through the global financial crisis and the COVID-19 pandemic.
There has been much speculation over the identity of Prabowo’s cabinet, which is expected to be announced before the oath of office on October 20, including ministers from outgoing President Joko “Jokowi” Widodo’s administration. Reuters reported that among them were several members of Jokowi’s cabinet, including Interior Minister Tito Karnavian, Trade Minister Zulkifli Hassan and Energy Minister Baril Rahdaria.
Prabowo will embark on an ambitious spending program, including increased defense spending, higher civil service salaries, and a $28 billion program to provide free meals to 83 million children and pregnant women. Not to mention the cost of rebuilding Indonesia. New capital Nusantara. The former general also announced an ambitious goal of increasing annual economic growth to 8% by the end of his five-year term.
To achieve this goal, Prabowo announced plans to raise the country’s debt-to-GDP ratio from the current 39% to 50%. Some reports have suggested that he may also be exploring ways to remove caps on fiscal deficits and debt-to-GDP ratios imposed in the wake of the 1997-1998 Asian financial crisis. .
These plans naturally caused fear in financial markets. Major rating agencies such as Fitch Ratings and Moody’s have expressed concern that Mr. Prabowo’s spending plans signal a break with Indonesia’s historically conservative fiscal policy approach, while at the same time reducing national revenue. He noted that his plan to increase the number of people in the United States “could take a significant amount of time.”
In this context, having a trusted figure like Sri Mulyani in the Ministry of Finance would calm external analysts and perhaps warn the government of more risky ambitions, while at the same time stabilizing the country’s finances. It will help improve. Jahen Rezki, an economist at the University of Indonesia, said in comments to Reuters that Mulyani’s presence could act as a brake if the new government comes up with policies that are impossible or unrealistic. expressed.
