Jokowi Picks Main Rival, Startup Founder for Indonesia Cabinet
Indonesia’s president asked the nation’s opposition leader and the founder of its biggest startup to join a revamped cabinet.
(Bloomberg) -- Indonesian President Joko Widodo asked the nation’s opposition leader and the founder of its biggest startup to join a revamped cabinet as he puts the Southeast Asian nation on a path to become a $7 trillion economy.
Prabowo Subianto, the president’s challenger in the 2014 and 2019 elections, told reporters he was offered a ministerial post in the defense sector after meeting with Widodo in Jakarta on Monday. Nadiem Makarim, the 35-year-old co-founder of ride-hailing service Gojek, said he was also offered a cabinet post.
Jokowi, as the 58-year-old president is known, was sworn in for a second and final five-year term on Sunday, pledging to overhaul a host of laws hindering investment and job creation. He wants to boost the size of the $1 trillion economy to $7 trillion by 2045 and lift per-capita income to 320 million rupiah ($22,656) by then.
Prabowo, a former general, said he accepted Jokowi’s offer to join the cabinet and confirmed his Gerindra party would get a second post to be filled by Edhy Prabowo, who is not related to the opposition leader.
“Today we were officially asked, and we have accepted,” Prabowo said, adding he would “work as hard as possible” to achieve the targets and expectations set by the president.
Jokowi met with several high profile figures who may get cabinet posts, including the following:
- Prabowo, chairman of the Gerindra party
- Makarim, co-founder of Indonesia’s first startup unicorn Gojek
- Airlangga Hartarto, chairman of Golkar party and currently industry minister
- Mohammad Mahfud Mahmodin, a former Constitutional Court judge
- Erick Thohir, a successful businessman who spearheaded the president’s election campaign team
Jokowi said he’s looking for fresh energy in his new team, which is expected to be announced and sworn in Wednesday.
“I want elected ministers to be innovative, productive, hardworking and fast,” he said on Twitter. “A figure who is not stuck in a monotonous routine. Our task is not only to make and implement policies, but to ensure that people enjoy services and development outcomes.”
The U.S.-traded Indonesian ETF, known as iShares MSCI Indonesian ETF, rose 0.9% Monday, outpacing a 0.1% rise in the Jakarta Composite Index.
Facing a public backlash over some planned reforms and controversial laws, Jokowi is reaching out to former political foes and the nation’s political elite to help strengthen his ruling coalition. A plan to amend the criminal code, which would infringe on free speech and human rights, and the passing of a law that weakened the nation’s anti-graft agency have already prompted waves of street protests, on top of deadly violence in the restive Papua region.
The president will be counting on new allies in parliament to also counter a push by the dynastic families, including some who backed his rise, to amend the constitution and gain greater influence over the government.
“It is consistent with Jokowi’s strategy of seeking to co-opt or coerce his opponents into his coalition where he can,” said Aaron Connelly, a research fellow on Southeast Asian politics at the International Institute for Strategic Studies in Singapore.
“He has calculated that this approach leads to greater political stability, at least in the short term and protects him against attempts to remove him from office, which he has worried about from day one,” Connelly said.
Jokowi has vowed sweeping reforms in his second term, pledging to overhaul the nation’s labor law by the end of the year and opening up more industries in the economy to foreign investors. He’s also promised to gradually lower the corporate tax rate from 25% to 20% by 2023 to make Indonesia more competitive.
Economic growth has hovered around 5% for most of Jokowi’s first term, with the International Monetary Fund recently revising down its forecast for this year to 5% from 5.2% in July.
While Jokowi’s first tenure was dominated by an infrastructure drive, the second term must see a boost in “soft infrastructure” including legal reform, anti-corruption measures and education, Satria Sambijantoro, an economist at PT Bahana Sekuritas in Jakarta. Reform of the labor law is probably “low-hanging fruit,” he said.
--With assistance from Rieka Rahadiana and Harry Suhartono.
To contact the reporters on this story: Karlis Salna in Jakarta at ksalna@bloomberg.net;Viriya Singgih in Jakarta at vsinggih@bloomberg.net;Arys Aditya in Jakarta at aaditya5@bloomberg.net
To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net;Thomas Kutty Abraham at tabraham4@bloomberg.net;Nasreen Seria at nseria@bloomberg.net
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