“[The President] has assigned me to keep serving as finance minister and to use all fiscal policy [options] to help the relevant ministers improve economic resilience," Sri Mulyani told reporters after a meeting with Jokowi at the Presidential Palace on Tuesday.

She is expected to bring about a policy breakthrough that creates a positive business environment through fiscal incentives and other tools to avoid a hard landing on Indonesia’s economy against the backdrop of the United States-China trade war and global recession threats.

The former managing director of the World Bank outlined some of Jokowi’s priorities for his second and final term, including the development of small and medium enterprises, the utilization of economic tools that improve the country’s trade balance and current account and the formulation of policies that create jobs.

Sri Mulyani, who was also finance minister from 2005 to 2010 under then-president Susilo Bambang Yudhoyono, is expected to spearhead sweeping tax reforms that lower the corporate income tax and tax digital economy multinationals operating in the country.

“Beyond the near term, bringing tax rates closer in line with the rest of the region would also likely help improve medium-term competitiveness and potential growth as it spurs private sector capex, particularly in the non-commodities sectors,” Morgan Stanley wrote in a recent report.

Economic observers and market and business players contacted by The Jakarta Post said there was a need for reform to address export and investment issues that prevented Indonesia from growing beyond the 5.05 percent recorded in the second quarter, its lowest level in two years.

Without a breakthrough from the policy side, gross domestic product growth would only be at 5 percent and thus fail to achieve the President's goal of becoming one of the world’s five biggest economies by 2045, as annual growth of 7 to 8 percent was required to meet the target, said Center of Reform on Economics Indonesia research director Piter Abdullah.

Indonesian Chamber of Commerce and Industry deputy chairman for monetary, fiscal and public policy Raden Pardede said Sri Mulyani had two issues to address immediately, namely inefficient government spending and tax reform.

"These are difficult and uncertain times globally and we hope Indonesia will stay on the path to reform in ways that will attract investors into the country,” said American Chamber of Commerce Indonesia managing director Lin Neumann.

Sri Mulyani said she was open to adjusting policies at a time of turbulent external conditions affecting the economy.

A plan for an omnibus law to change prevailing laws on value added tax, income tax and general taxation was announced by the government in September as part of broader structural reforms to attract more foreign direct investment to the country, a top priority for Jokowi’s second term.

“As Jokowi strives to improve Indonesia’s economic competitiveness, Sri Mulyani is the best candidate to oversee the government’s plan to cut the corporate tax rate to 20 percent in 2021 from 25 percent currently,” BNI Sekuritas equity research head Kim Kwie Sjamsudin said. 

Kim said the market was still waiting for the appointments of industry minister and law and human rights minister to further assess the government’s effort to revise the negative investment list. “The market is waiting for the industry minister post as Jokowi aims to revise the negative investment list to push for reindustrialization […] to simplify investment-related regulations.”

After a meeting with the President on Tuesday, former coordinating maritime affairs minister Luhut Pandjaitan said that he would be in charge of the coordinating maritime affairs and investment ministers. Jokowi said his second term would introduce a new investment ministry to further accelerate growth.

Aside from Sri Mulyani and Luhut, other familiar faces summoned by Jokowi on Tuesday include former public works and housing minister Basuki Hadimuljono, former transportation minister Budi Karya Sumadi, former national development planning minister Bambang Brodjonegoro and former agrarian and spatial planning minister Sofyan Djalil.

Golkar Party chairman and former industry minister Airlangga Hartato was summoned Monday, touted to be the new coordinating economic minister.

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