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The United Indonesia Cabinet II (2009-2014)
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Strong Leadership, Strong Government
resident Susilo Bambang Yudhoyono’s methodical mind and keen thought process went to work as he prepared to form his new cabinet. As a first step he urged political parties to sign a coalition agreement to support him during his second term, after which he began choosing cabinet members by way of a tight selection process. The SBY fit and proper test, as the system has since become known as, paid off well—he now has some of the country’s best and brightest people occupying in the cabinet. No sooner had he announced the lineup than critics, as a routine rite of passage, began to comment on his choices. SBY’s leadership prevailed, however, and by all measures he now has a credible cabinet at his disposal to finish off what he had started to do five years ago: improving the people’s prosperity and upholding justice. Early this month, SBY announced the lineup of the United Indonesia Cabinet II, consisting of 34 ministers and three minister-level officials. The new cabinet is one with the largest number of political party members in recent presidencies. With such a cabinet lineup, SBY is set to lead in a stable and secure political setting. As SBY won over 60 percent of the popular vote in the presidential election, and the coalition agreement signed, sealed and delivered, he can expect few problems from the House of Representatives (DPR). As SBY’s main focus is the economy, it may be constructive to have an overview of some key members of his new cabinet. Observers gave a measured response to Hatta Rajasa’s appointment as coordinating minister for the economy, with many doubt-
ing how effectively he, with little background in economics, could deal with complex development issues. Hatta presides over a powerful ministry, as it was set up to coordinate planning, policy formulation and coordination among economics ministries. It coordinates 14 ministries and agencies involved. Hatta, a Bandung Institute of Technology (ITB) graduate with a degree in petroleum engineering, was first appointed to ministerial office by SBY as transportation minister in the 2004-2007 cabinet. His cabinet experience and his close relationship with the president, however, would help him perform well. The appointment of MS Hidayat as industry minister was hailed by the Indonesian Businessmen Association (Apindo), which is confident that his antifree trade stances would sit well with the Trade Ministry. Hidayat has been outspoken in airing his concerns about the threat free-trade poses to domestic industry, but Apindo expects him to foster close ties with Trade Minister Mari Elka Pangestu, who has been reappointed to a second term. Business people sees Mari as eager to help reduce costs caused by so many overlapping trade regulatory bodies responsible for labeling and supervising product quality, according to analysts. As expected, SBY has reappointed Sri Mulyani as finance minister, a move that earned praise from the business world as a whole. The US-trained econo-
mist is expected to continue with reforming the financial sector. To manage the country’s energy and mineral resources, SBY has chosen Darwin Saleh, the 49year-old University of Indonesia economics lecturer, to replace Purnomo Yusgiantoro. Darwin holds a PhD in financial management and an economics degree from the University of Indonesia. He said his focus would be on the development of renewable energy and establish fuel stocks to last for a minimum of 23 days. Analysts however reminded him that the potential threat of rising oil prices and the electricity crisis are more important issues, as well as the need to review regulations in the energy and mineral resources sector to attract investment. To supervise state-owned enterprises (SOEs), SBY has chosen Mustafa Abubakar (60), who has a PhD from the Bogor Agriculture Institute (IPB). While he lacks experience in the corporate world and others fear the restructuring of SOEs would be delayed until he masters the trade, others insist that his tenure at the state logistics body (Bulog) could help him with the challenges he faces in his new post. Agriculture Minister Suswono (50), who has a master’s degree in agricultural management, has set the main goals of increasing the amount of land available to farmers. He is also ready to change the current price-subsidy mechanism for fertilizer and seeds as it is said
to benefit farmers very little due to fraudulent practices. SBY has identified 10 agricultural issues he wants Suswono to concentrate on. They include food security and rice self-sufficiency, boosting farm and plantation productivity, increasing farmers’ buying power by raising their incomes, and lifting cattle production to achieve red meat self-sufficiency by 2014. One of Golkar’s ministers in the cabinet is Maritime Affairs & Fisheries Minister Fadel Muhammad. His main tasks are applying new laws in the fisheries sector, which provide for the zoning of maritime and coastal areas for fishing and aquaculture. He also has the ministry’s fight against illegal fishing by both local and foreign vessels in mind, not to mention illegal and ecologically damaging forms of fishing such as dynamite or blast fishing. A prominent businessman, Fadel won kudos from many quarters for his role as governor in developing Gorontalo’s agriculture sector. Fadel has said that the President has called on him to improve the welfare of fishing and coastal communities, and to explore the full potential of the oceans and the fisheries sector.” One of the key players in the economic realm is Development Planning State Minister for National Development Planning Armida Alisjahbana. Armida will also be the ex officio head of the National Development Planning Board (Bappenas), which conducts research on
VIEWPOINT
THE ECONOMY
MINING
COMMUNICATIONS
The Status of Our Democracy
Economic and Policy Watch Targeting 8% GDP growth would excite investors, uncover impediments to achieving the growth target and unleash political pressure to remove them.
Repositioning the Indonesian Mining Industry
Tifatul Sembiring’s Big Task
The electoral victory of SBY-Boediono was absolute. It is important because it reaffirms the status of our democracy.
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The enactment of Law Number 4 of 2009 on Mineral and Coal Mining (“Mining Law”) has created legal uncertainties to the mining industry.
At the moment, Indonesia is one of the only countries in the world that does not have a sound internet site to introduce business to its potential in trade, investment, and tourism.
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the country’s economic and development potentials and prepares comprehensive national development plans. Many expect Armida (49) to do a better job than her predecessor as she was a researcher, conducting studies and making sure that vital projects receive funds. One of the five women in the new cabinet, Armida holds a PhD in economics from the University of Washington, US, and once served as a consultant at the World Bank and the Australian
development agency, AusAid. “Bappenas will engage in more focused planning for central and local development. This will, in turn, help reduce poverty and unemployment,” she said. By and large, domestic and international business community has reacted positively to the appointment of Gita Wirjawan, the former country chief of USbased JP Morgan Chase, as the new head of the Investment Coordinating Board (BKPM), who they say will breathe new life into
the body. The appointment of the former international banker-turnedinvestor has given the business community reason to hope that impediments to investment will be removed. It is still some time before their performance in the first 100 days can be assessed. For now, it is suffice to say that their professional experiences and credentials reassure us that the cabinet has the right kind of people to be at SBY’s side.