Indonesia's Widodo reshuffles cabinet to boost economy

JAKARTA - Indonesian President Joko Widodo replaced major economic ministers in a cabinet reshuffle Wednesday less than a year into his term, after facing criticism for failing to revive growth which is at a six-year low.

Former central bank governor Darmin Nasution was named to the important post of chief economics minister, while prominent private equity executive Thomas Lembong was appointed the new trade minister.

Four other ministers were replaced in the reshuffle, which followed months of speculation that Widodo planned changes after a poor start to his presidency.

Analysts broadly welcomed the news, particularly the decision to appoint Nasution who is seen as a safe pair of hands and a reformer.

"The cabinet reshuffle is a good move as it shows that Jokowi is bold enough to make changes and replace underperforming ministers," said Salim Said, from the Indonesian Defence University, using Widodo's nickname.

Wellian Wiranto, an economist with Singapore-based OCBC Bank, said there was hope that Nasution will "have a better chance at coordinating economic policies among the myriad of ministries and agencies which have been largely lacking thus far".

Presidential spokesman Teten Masduki said the changes had been made to create a "stronger, consolidated government".

Widodo was inaugurated in October after winning power on a pledge to boost Southeast Asia's biggest economy, which has been slowing in recent years as demand for its key commodities exports decline.

But growth has continued to slide, falling to a six-year low of 4.67 percent in the second quarter, and the government has been criticised for a series of policy flip-flops and a lack of organisation.

Investors disappointed

His administration has notably failed to kickstart a promised flurry of major infrastructure projects, seen as crucial to attracting foreign investment and raising growth. Many ministries face criticism for only spending a fraction of their budgets.

Widodo got off to a promising start by cutting huge fuel subsidies that were seen as a drag on growth but since then his performance has generally disappointed investors.

The former furniture exporter, who is Indonesia's first leader from outside the political and military elites, has failed to live up to high expectations that he could shake up a political scene dominated by figures from the autocratic past and aggressively push reform.

While the focus of his reshuffle was economic, Widodo has also suffered falling popularity as disappointment grows at his failure to tackle vested interests and corruption in one of the world's most graft-ridden countries.

His failure to defend the popular anti-graft agency from attacks by the notoriously corrupt police, during a row over the appointment of a controversial new police chief, severely dented his credentials as a corruption fighter.

Five of the six ministers appointed Wednesday were seen as technocrats as opposed to political appointees, following criticism that Widodo had been pressured into making previous appointments by his party's chief, former president Megawati Sukarnoputri.

Lembong, who studied at Harvard University, replaces Rachmat Gobel, whose ministry's recent decision to cut the cattle import quota from Australia angered the public as it led to soaring beef prices.

Also replaced Wednesday was security minister Tedjo Edhy Purdijatno. Luhut Panjaitan, Widodo's chief of staff and a figure close to the president, was appointed to the post.

Maritime affairs minister Indroyono Soesilo was replaced by Rizal Ramli, while national development planning minister Andrinof Chaniago was replaced by Sofyan Djalil, who moves from the post of chief economics minister.

The only clear political appointee was Pramono Anung, who is from Widodo's party, as cabinet secretary.