Scarcely a year after being sworn in for his second, five-year term as president, President Joko (Jokowi) Widodo has undertaken a significant reshuffling of his cabinet, appointing six new ministers and five new vice-ministers on 23 December. On balance, the new members of the cabinet bring substantial and credible experience in both business and public governance, raising expectations that the Jokowi administration will act more expeditiously to deploy Covid-19 relief and vaccines and to move more decisively and effectively in tackling obstacles to new investment.

The timing of the reshuffle was driven in part by Jokowi’s need to replace two ministers – Fisheries Minister Edhy Prabowo and Social Affairs Minister Juliari Batubara – after they were recently charged with corruption and forced to resign. But Jokowi has used the necessity of filling those two empty ministerial slots in his cabinet to make a more substantial change to the character of the cabinet. The addition of a handful of up-and-coming professionals with positive public images and proven managerial track records is intended to bring some much-needed professionalism and energy into key portfolios of the Jokowi administration.

Ministerial appointments, 23 December

Business-focused, experienced new ministers

Jokowi’s prioritization of technocratic competence over industry or political affiliation is well-exemplified by the choice of a non-medical doctor as his new Minister of Health. Budi Sadikin is a career banker who rose to become CEO of the country’s largest bank, Bank Mandiri, before taking on the CEO role of a newly created holding company for state-owned businesses in the mining sector and, more recently, the Deputy Minister role at the Ministry of State-Owned Enterprises. Sadikin concurrently serves as Head of the National Economic Recovery Task Force and has been involved in Indonesia’s efforts to procure Covid-19 vaccines. Sadikin is expected to bring a strong familiarity with supply-chain management to the colossal task of distributing Covid- 19 vaccines across the Indonesian archipelago and a faster disbursement of healthcare budgets and resources. He replaces an army doctor, Lt. Gen. (Ret.) Terawan Agus Putranto, who has come under sharp criticism for his lackluster response to the pandemic and slow disbursement of Covid-19 healthcare stimulus funds.

Muhammad Lutfi’s appointment as Trade Minister, a role he held briefly in 2014, portends a shift to a greater focus on international trade and regional economic integration, and a departure from the nationalist policymaking and domestic trade focus of the previous Minister, Agus Suparmanto. Lutfi, who was Indonesia’s youngest ever Ambassador to Japan in 2010-2013, is being recalled from Washington, DC, where he served only three months as Indonesia’s ambassador to the US.

The businessman-politician Sandiaga Uno will take over the Ministry of Tourism and Creative Economy, and will be expected to add more business savvy to Indonesia’s goal of developing “Ten New Bali’s” across Indonesia, which has long lagged many of its regional peers in attracting international tourists. The charismatic Uno was one of Indonesia’s first successful private-equity investors, and has an extensive social-media following. Uno made a start on improving Jakarta’s tourism potential when he served as the capital city’s Deputy Governor in 2017-2018 before leaving that role to become Prabowo Subianto’s vice-presidential candidate in the run up to Indonesia’s presidential elections in mid-2019. Both members of the opposing presidential ticket in the 2019 elections, Prabowo and Uno, are now prominent members of Jokowi’s cabinet, highlighting the breadth of Jokowi’s governing coalition.

Tri Rismaharini, the highly regarded former mayor of Surabaya, Indonesia’s second largest city, will take over as Social Affairs Minister. Normally not a high-profile ministerial post, Social Affairs has taken on vastly increased importance in 2020 with its mandate to channel Covid-19 relief funding to businesses and individuals badly affected by the pandemic. The former minister, Juliari Batubara, was arrested in December 2020 for allegedly accepting kickbacks from distributors of Covid-19 food packages to the poor.

Jokowi has retained his key economic ministers, including Sri Mulyani Indrawati as Finance Minister and Airlangga Hartarto as Coordinating Minister for Economic Affairs, despite earlier rumours that the two would also be moved into new roles. Other key ministerial positions, such as Luhut Panjaitan as Coordinating Minister of Maritime and Investment Affairs, Siti Nurbaya as Environment and Forestry Minister, Agus Gumiwang Kartasasmita as Industry Minister, and Johnny Plate as ICT Minister, also remain unchanged.

A word on politics

The reshuffle largely preserves the share of cabinet representatives from each of the seven political parties within Jokowi’s loosely constructed governing coalition. The number of cabinet posts held by military figures drops from six in the previous cabinet to four in the new cabinet. Jokowi replaced his controversial choice of Religious Affairs Minister Maj. Gen. (Ret.) Fachrul Razi with a figure from the Islamic mass organization Nahdlatul Ulama, Yaqut Cholil Qoumas, a choice that will both bolster Jokowi’s standing with the important Islamic grouping and likely signal a continued hard-line response to fringe radical Muslim groups.

Both Sandiaga Uno, a top official of the Gerinda Party headed by Defense Minister Prabowo Subianto, and Tri Rismaharini, a long-time stalwart of the PDI-P party who is personally close to PDI-P Chairwoman and former President Megawati Sukarnoputri, score well in popularity polls for likely contenders in the 2024 presidential elections. Jokowi’s decision to bring them into his cabinet at this point will likely have advantages for both sides. Cabinet roles for Uno and Rismaharini gives them national visibility and a chance to demonstrate managerial success at the national government level. For Jokowi, bringing two of his aspiring successors into the cabinet will discourage criticism by them of his performance, at least until much closer to the 2024 elections.

What to expect

We expect the cabinet reshuffle to lead to more business and investment-oriented policymaking into 2021 and beyond. Many of the new cabinet entrants are capable next-generation businessmen and politicians who have a solid understanding of what enables business and investment growth, and several can claim extensive experience engaging with international investors. The new cabinet members are expected to be generally supportive of Coordinating Minister Luhut in his efforts to ramp up inbound investment and Finance Minister Sri Mulyani Indrawati in her efforts to maintain sound macro-economic management as Indonesia moves towards an economic recovery in 2021.

Budi Sadikin’s long experience with leading large organizations and his understanding of logistics should improve Indonesia’s handling of the Covid-19 pandemic, with effective vaccine disbursement being key to Indonesia’s ability to move past the pandemic and focus on economic recovery efforts. And Mohammad Lutfi will give the Trade Ministry a more international focus, increasing Indonesia’s involvement in both regional and bilateral trade deals, including the continuation of discussions on a limited trade deal with the US.

Nevertheless, while the initial response from the business community to the cabinet reshuffle has been largely positive, it remains to be seen how quickly the new team can drive bureaucratic change in their respective new posts and how well they will work together as a team. The Trade and Health Ministries, to mention two examples, are both very large bureaucracies, with well-earned reputations for protectionist policies and inefficient administration. Bringing about discernible change will require persistence from the new ministers, and ongoing, visible support from Jokowi, including for the introduction of merit-based performance management in the upper reaches of the civil service.

Finally, cohesion among the new team cannot be assumed. At least a half-dozen members – and very possibly more – of the new cabinet are thought to harbor aspirations to run in the 2024 presidential elections, and those aspirations could well lead to disharmony in the cabinet as the election date approaches. It will require all of Jokowi’s political skills to keep the cabinet working exclusively on his agenda for the remainder of his final term in office.

Brief profiles of newly-appointed ministers

Name and Position	Brief profiles
Muhammad Lutfi Minister of Trade	Strong commitment to US-Indonesia bilateral trade relations. As Ambassador to the US, helped bring the GSP eligibility review to a successful conclusion in November 2020 and commenced negotiations on a separate limited bilateral trade deal with the US Trusted advisor to President Jokowi; part of his campaign team during the 2019 elections Previously Minister of Trade (2014), Indonesian Ambassador to Japan (2010- 2013), and Head of the Indonesian Investment Coordinating Board (2005-2009) President Commissioner of Medco Energi, Indonesia’s second-biggest oil and gas company, since 2015 and President Commissioner at Indonesian coal mining company, Darma Henwa, since 2019 Previously CEO of Mahaka Group, a conglomerate with businesses in media, telecommunications, electronics, F&B, and sports. Co-founded in 1992 with the current Minister of State-owned Enterprises (SOEs), Erick Thohir Bachelor’s degree in Economics from Purdue University, US
Budi Gunadi Sadikin Minister of Health	Most recently served as the Vice Minister of SOEs, alongside Kartiko Wirjoatmodjo. Oversaw SOEs in energy and mining Concurrently Chairman of the National Economic Recovery Task Force and Spokesperson of the Covid-19 Handling Committee, appointed in July 2020 Previously President Director of state-owned mining holding company Inalum (now MIND ID) and Special Staff to former Minister of SOEs, Rini Soemarno, from 2016-2017 Career banker for over 30 years, with most recent position as President Director of Bank Mandiri (2013-2016). Held several top managerial positions at Bank Danamon (2004-2006), ABN Amro Bank Indonesia & Malaysia (1999-2004), and Bank Bali (1994-1999) Bachelor's degree in Nuclear Physics from the Bandung Institute of Technology (ITB). Certified Chartered Financial Consultant (CHFC) and Chartered Life Underwriter (CLU) from the Singapore Insurance Institute
Tri Rismaharini Minister of Social Affairs	PDIP politician and regional government official of Surabaya for over 20 years, with notable expertise and accomplishments in urban planning Most recently served as Mayor of Surabaya for the second consecutive period; re-elected in 2016 after serving from 2010-2015. Prior to cabinet appointment, had been favored by PDIP to run for Governor of Jakarta in 2022 Head of Surabaya City Development Planning Agency (2008-2010) and Head of Surabaya City Sanitation and Landscaping (2005-2008), after serving several supervisory positions at the Surabaya Regional Office Master’s degree in Urban Development Management and Bachelor’s degree in Architecture from the Sepuluh Nopember Institute of Technology (ITS), Surabaya in 2002
Sandiaga Salahuddin Uno Minister of Tourism and Creative Economy	Businessman and Gerindra politician. Former Vice-Presidential candidate for Prabowo Subianto in the 2019 presidential elections Previously Deputy Governor of Jakarta from 2017-2019 under Governor Anies Baswedan. Well known for his OK OCE entrepreneurship program Chairman of the Indonesian Young Entrepreneurs Association (HIPMI) from 2005–2008 Founder of Saratoga Capital and co-founder of PT. Recapital Advisors (with Indonesian Chamber of Commerce and Industry Chairman Rosan Roeslani) Master’s degree in Business Administration from George Washington University, US
Sakti Wahyu Trenggono Minister of Maritime and Fisheries	Although not a party member, closely affiliated with PDIP; longtime member of Jokowi’s campaign teams from his time as Governor of Solo through to the 2019 presidential elections Most recently served as Vice Minister of Defense, appointed in October 2019 Previously member of political party PAN from 2009-2013 Involved in several businesses and associations, including local cloud server company Indonesian Cloud and the Indonesian Telecommunication Tower Providers Association (ASPMITEL) Concurrently Commissioner at PT. Merdeka Copper Gold Tbk Master’s degree in Management and Bachelor’s degree in Industrial Engineering from the Bandung Institute of Technology (ITB)
Yaqut Cholil Qoumas Minister of Religion	Son of KH Muhammad Cholil Bisri, a founding member of the National Awakening Party (PKB) and prominent leader of the Nahdlatul Ulama (NU) Chairman of GP Ansor, an Islamic youth movement affiliated with NU, since 2011 Interim member of Parliament (Commission III) overseeing law and human rights from 2014-2019, re-elected for 2019-24 term, and joined Commission II which oversees regional governments and elections Deputy Regent of Rembang Regency from 2005-2010 Bachelor’s degree in Sociology from University of Indonesia