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Indonesia reshuffles cabinet, replaces Finance Minister Sri Mulyani
Indonesia’s President Prabowo Subianto appointed new ministers to the Merah Putih Cabinet in a ceremony at the State Palace on September 8.
Five ministers were affected by the reshuffle: Budi Gunawan (Coordinating Minister for Political, Legal, and Security Affairs), Sri Mulyani (Finance Minister), Abdul Karding (Minister for the Protection of Indonesian Migrant Workers), Budi Arie (Cooperatives Minister), and Dito Ariotedjo (Minister of Youth and Sports).
Prasetyo Hadi, Minister of State Secretariat, said a new ministerial position for Hajj affairs will also be filled, with the inauguration scheduled for the same day.
Purbaya Yudhi Sadewa, who has served as chairman of the Deposit Insurance Corporation, has become the new finance minister.
This marks the first cabinet reshuffle under Prabowo’s administration, which began in October 2024.
The initial cabinet was appointed on October 21, 2024, under Presidential Decree Number 133/P 2024.
The reshuffle comes at a time when Indonesia is actively pushing its digital economy agenda, with a focus on AI adoption and digital infrastructure.
🔗 Source: Bloomberg Technoz
🧠 Food for thought
Implications, context, and why it matters.
Large cabinet structures create governance challenges requiring frequent adjustments
- Prabowo’s cabinet represents the largest since the 1960s, with 111 members including 48 ministers and 58 deputy ministers, raising concerns about bureaucratic efficiency1.
- Critics warned that such bloated structures could create bureaucratic inefficiencies and complicate decision-making processes, with potential for overlapping responsibilities among ministries2.
- Indonesian academics recently called for comprehensive cabinet reshuffles, specifically urging President Prabowo to replace ineffective ministers and those implicated in corruption, particularly in key economic and security sectors3.
Economic pressures intensify the need for ministerial changes
- Indonesia faces mounting fiscal challenges with tax revenue declining 30.19% year-over-year to IDR 187.8 trillion in January-February 2025, while national debt reached IDR 8,909.13 trillion (39.6% of GDP)4.
- The timing of Sri Mulyani’s replacement as Finance Minister coincides with these revenue collection issues and rising debt concerns, suggesting performance-based reshuffling rather than purely political motivations4.
- Public dissatisfaction with economic conditions has manifested in widespread student demonstrations against rising living costs and austerity measures affecting public services and education5.
- The reshuffle represents Prabowo’s first major cabinet adjustment since taking office, occurring amid criticism about slow program execution and the need for effective governance to address financial challenges45.
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