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Yanni (left) has been leading the Indonesian economy for 14 years, helping Indonesia overcome severe challenges such as the COVID-19 pandemic and the global financial crisis, and is highly respected in the international financial community. Purbaya (right) takes over as Minister of Finance from Mu Yanni.
Indonesian Finance Minister Mu Yanni, who served in three presidential cabinets for 14 years, was replaced in the latest cabinet reshuffle by President Prabowo and was succeeded by the Chairman of the Indonesian Deposit Insurance Agency, Purbaya.
Analysis suggests that Prabowo intends to increase his control over the economic agenda through this round of restructuring, and also respond to the public's demand for reform.
The ministers of five departments were replaced in this round of restructuring. Apart from Mu Yanni, the other four were the Minister of Political and Security Coordination, Minister of Migrant Workers' Protection, Minister of Cooperatives, and Minister of Youth Affairs and Sports. The authorities have also established a pilgrimage department.
The newly appointed minister was sworn in at the National Palace on Monday afternoon (September 8th).
Mu Yanni resigned or was related to the demonstration, but the situation is neither resignation nor dismissal
Among the numerous personnel transfers, the candidate for finance minister has attracted much attention. Mu Yanni served in the cabinets of three presidents, Yudhoyono, Joko Widodo, and Prabowo, from 2005 to 2010 and from 2016 to present. She was a helmsman in stabilizing the Indonesian economy, helping the country overcome severe challenges such as the COVID-19 pandemic and the global financial crisis, and is also respected in the international financial community.
However, large-scale protests erupted in Indonesia at the end of last month, and dissatisfied citizens with the government's financial allocation and tax system turned their anger towards Mu Yanni. Her private residence was also looted by rioters. Afterwards, rumors began to circulate that Mu Yanni might leave the cabinet.
Secretary of State Prasetti said that Prabowo's decision to adjust the cabinet list was based on various developments, opinions, and ongoing evaluations. Regarding Mu Yanni's resignation, Prasetti did not provide a reason, only stating that she "neither resigned nor was removed".
New Finance Minister Purbaya: President sets 8% growth target 'not impossible'
Purbaya Yudhi Sadewa, the 61 year old new finance minister, was previously the chairman of Indonesia's deposit insurance institution and also served in the Maritime and Investment Affairs Coordination Department.
Purbaya said in a media interview that the 8% economic growth target set by Prabowo is "not impossible" to achieve. He promised to find ways to quickly boost the economy and promote the joint participation of the public sector and private enterprises in economic construction. He also emphasized that there is no need to impose new taxes.
He also seems to be intentionally downplaying the impact of the protests on economic activities. I will create 6% to 7% economic growth, and protesters will disappear automatically. They will have three meals to eat and be busy looking for jobs instead of demonstrating
Mu Yanni's resignation impacts Jakarta stock market decline
After the news of Mu Yanni's resignation spread, the Jakarta stock market fell in response, with a drop of 1.28% at the close of trading.
Wijayanto Samirin, a senior economist of Panamadila University in Jakarta, said in an interview with the Lianhe Zaobao that Mu Yanni is a rare member of Prabovo's cabinet who has both experience and ability, and her words have strong credibility in the market. Mu Yanni's resignation is a "huge loss" for Prabowo.
Siwage Dharma Negara, a senior researcher at the Southeast Asian Research Institute of Singapore's Yusof Ishak Institute and concurrent director of the Indonesian research project, pointed out that the departure of Mu Yanni can be interpreted as Prabowo's intention to increase control over the economic agenda and the need for a finance minister who can better support multiple flagship projects during his tenure.
Mu Yanni has fundamental differences of opinion with the government. For her, leaving may be the best decision
Sivag said that Purbaya has achieved certain success in the financial industry, but in terms of international reputation and market performance, it is not as good as Mu Yanni. Whether he can inject confidence into the market depends on his policy direction, adherence to fiscal discipline, transparency in the budget formulation process, and engagement with multilateral partners.
If he signals the continuation of policies, he is expected to restore market confidence. But if he signals rapid fiscal expansion, market sentiment will become tense
Vijayanto said that Purbaya must ensure that the fiscal budget for the next two years can stimulate economic growth, promote fairness, and improve the government's fiscal discipline.
The first two weeks after he takes office are very important. He must come up with specific and practical plans, clearly and confidently explaining his plans to the market. This is a crucial starting point, and it is crucial for what path he will choose as the finance minister next |
