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Too soon to move economic ministers, warn analysts
As discussions on the reorganization of the governmentâs economic team intensify, economists have warned President Joko âJokowiâ Widodo that hasty decisions could promote uncertainty among investors and local business stakeholders
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s discussions on the reorganization of the government's economic team intensify, economists have warned President Joko 'Jokowi' Widodo that hasty decisions could promote uncertainty among investors and local business stakeholders.
The President has expressed concern about the recent poor performance of the economy, with names such as Coordinating Economic Minister Sofyan Djalil, Finance Minister Bambang Brodjonegoro, National Development Planning Minister Andrinof Chaniago and State-Owned Enterprises (SOE) Minister Rini Soemarno reportedly being included in the President's blacklist.
However, some economists fear that reshuffling the economic team after only eight months in office might promote instability and erode investor confidence, particularly given the challenging outlook in the global economy.
'Recent talks about reshuffling the government's economic team might be way too early,' said Latif Adam, an economist from the Indonesian Institute of Sciences (LIPI).
'We haven't given enough time for the ministers to deliver, while some of the current economic problems, in my view, are actually beyond the ministers' control,' he said on Tuesday.
This year, investors have shied away from Indonesia over concerns about the sluggish realization of Jokowi's economic promises.
Government spending and tax revenue collection remain low, with growth at the lowest level since 2009 and inflation accelerating to the highest level this year.
As a result, investors have rushed to dump Indonesian stocks, bonds and currency, all of which have been among the region's worst performers this year.
Jokowi is of the opinion that the economic ministers must have better communication skills so that the public and investors can better understand the government's efforts and reforms to fix the economy, according to Teten Masduki, a member of the President's communications team.
However, Latif said he felt Jokowi's reshuffle plan might be driven by political, not economic, interests, with the incumbent economic team ending up as scapegoats.
'The government needs to be more assertive amid the political distortion and focus more on the economic policies,' commented Dian Ayu Yustina, an economist with Bank Danamon.
'The President has the mood to immediately replace those who do not perform. But, we do not think this [Cabinet reshuffle] is a good idea since it could delay spending further,' she argued.
Meanwhile, economic ministers have responded coolly to the suggestions that they could be kicked out from their respective posts.
'It's all up to the President. If I'm included as one of ministers to be replaced, I will have more time to play with my granddaughter,' SOE Minister Rini Soemarno said Tuesday. The first female state-owned enterprises minister frequently flies to Tokyo to visit her granddaughter.
Coordinating Economic Minister Sofyan Djalil also said recently that he would not mind if the President decided to oust him from the Cabinet, arguing that it was a 'normal thing' for economic policymakers to be unpopular with the public.
