ANALYSTS NOTE PRABOWO'S CABINET PROMOTES POLICY CONTINUITY AMID CONCERNS ABOUT ITS SIZE

By Mohd Iswandi Kasan Anuar

JAKARTA, Oct 23 (Bernama) -- President Prabowo Subianto unveiled his ‘Red-White’ cabinet on Sunday, signaling a seamless transition from the previous administration while prioritising new ministries and maintaining policy continuity despite potential increase in costs, according to investment banks.

The cabinet features seven coordinating ministers (up from four), 41 ministers (increased from 30), and 56 deputy ministers, with 24 positions held by independents and the rest from seven different parties – forming the country’s largest cabinet since 1966.

Key changes include the creation of three new coordinating ministries – food, infrastructure, and social empowerment – and dissolving the maritime and investment affairs ministry, while the Public Works and Housing Ministry is divided into two ministries.

In a research note, Maybank Investment Bank Bhd (MaybankIB), however, cautioned that “a larger cabinet could nonetheless increase operational costs”, estimating an annual rise in salary expenses by Rp777 billion (US$49.7 million), citing Jakarta-based research institute, Celios.

CIMB Investment Bank, in separate report, noted that Prabowo’s decision to expand the cabinet for political reasons may lead to increased bureaucratic complexity, even as the restructuring aims to enhance policy efficiency through smaller portfolios.

Prabowo retained some 17 ministers from former President Joko Widodo’s administration, reflecting a commitment to political continuity, such as Bahlil Lahadalia (Energy), Budi Gunadi Sadikin (Health), and Luhut Binsar Pandjaitan who now leads the new National Economic Council.

He also appointed trusted associates – including Sjafrie Sjamsoeddin as Defence Minister, Sugiono as Foreign Minister, and Major Teddy Indra Wijaya as Cabinet Secretary – reflecting a mix of continuity and loyalty in the cabinet.

In a surprising move, human rights activist Natalius Pigai was appointed as the first Human Rights Minister, signaling a commitment to addressing any human rights concerns, MaybankIB added.

Prabowo’s agenda focuses on improving Indonesia's global standing through poverty alleviation, food and energy self-sufficiency, industrialisation, corruption eradication, and a non-aligned foreign policy.

Key initiatives include investing in downstream industries and providing free meals and healthcare for schoolchildren and mothers, as well as building two million homes for low-income families.

MaybankIB noted that Prabowo’s experienced economic team is boosting investor confidence, with members including Airlangga Hartarto (Economic Affairs), Sri Mulyani (Finance), Erick Thohir (State-Owned Enterprises), and Budi Santoso (Trade).

MaybankIB forecasts Indonesia’s GDP growth of 5.1 per cent in 2024 and 5.2 per cent in 2025, and may improve to 5.5 per cent in 2026 – depending on how Prabowo’s initiatives are implemented.

CIMB Investment Bank highlighted that flexible state budgeting will help Indonesia avoid setbacks like those in 2015, when GDP growth slowed to 4.8 per cent in Joko Widodo’s first year due to low state spending.

The bank also projects sustained GDP growth of around 5.0 per cent in 2025.

-- BERNAMA