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Analysis: Prabowo appoints Luhut as head of revived National Economic Council
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Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan stands in front of a row of national flags. (JP/Seto Wardhana)
L
uhut Pandjaitan, the former coordinating minister for maritime affairs and investment under president Joko “Jokowi” Widodo, was sworn in by President Prabowo Subianto on Oct. 21 alongside over 100 ministers, deputy ministers and minister-level officials in the newly expanded cabinet. A fellow retired general, Luhut has been named head of the National Economic Council (DEN) in Prabowo's administration, as well as presidential adviser on digitalization and governance technology. This appointment reinforces Luhut’s continued influence over Indonesia’s economic development.
The DEN, originally established by president Abdurrahman “Gus Dur” Wahid in 1999 under Presidential Decree (Keppres) No. 144/1999, was created to guide the country’s recovery from the 1997–1998 Asian Financial Crisis. Operating under direct presidential oversight, the council was later dissolved in 2000 after being deemed to have fulfilled its mandate. Luhut now emphasizes that the revived DEN will advise the President on implementing his priority economic programs, serving as a public sector think tank staffed by economic experts.
The Advanced Indonesia National Young Entrepreneurs Volunteers (REPNAS), which supported the Prabowo-Gibran Rakabuming Raka presidential ticket, described the revival of the DEN as a strategic move to address economic challenges such as the global economic slowdown and Indonesia's budget deficit. Prabowo aims to foster sustainable growth through targeted, comprehensive policies, including his campaign promise to raise the country’s annual economic growth rate to 8 percent, lifting Indonesia out of the middle-income trap.
Luhut further outlined the DEN’s role in supporting the digitalization of national economic systems to enhance efficiency, aligning with his advisory position on digitalization and governance technology. Key areas of focus for the DEN will include the government’s procurement e-catalog and critical ministry-level information systems, such as the Mineral and Coal Information System (SIMBARA). Luhut stated that these digitalization efforts are targeted for completion within the next one to two years.
Luhut’s appointment signals the continuity of key economic policies from Jokowi’s administration to Prabowo’s Red and White Cabinet. In addition to Luhut, several ministers from the Jokowi era have retained their positions, including Coordinating Economic Minister Airlangga Hartato, Industry Minister Gumiwang Kartasasmita, Energy and Mineral Minister Bahlil Lahadalia and Finance Minister Sri Mulyani Indrawati.
While the DEN could significantly impact Indonesia’s economic policy by coordinating cabinet efforts and shaping presidential instructions, it faces two key limitations. First, the DEN lacks the authority to issue its own regulations, as it cannot derive such power from legislation. Second, the risk of inefficiencies may arise from overlapping responsibilities with coordinating ministries, which could hinder its effectiveness.
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