President Joko Widodo is considering a new regulation which will give more authority to Indonesia’s four coordinating ministers in an effort to improve the implementation of government policies, widely regarded by investors and analysts as one of the biggest impediments to economic growth.
Government sources told Asia Times that the regulation, which is now on the president’s desk, will allow the senior ministers to override decisions by individual ministers under their umbrella. It would also empower them to sign off on any issue that potentially affects another ministry.
The president has said he has already settled on his new Cabinet, dropping hints about who he might retain and who he intends to drop from his first administration. In the end, it will be a fool’s guessing game until he makes the formal announcement, presumably at his inauguration on October 20.
Indonesia is well-known for a surfeit of regulation and good intentions but notorious for falling short on implementation in policy-making, which is often made worse by overlapping regulations and the generally poor work ethic and weak quality of civil servants.
“No-one takes his own way,” Widodo was forced to remind his Cabinet in 2016 in stressing the need for better cross-sectoral cooperation in his administration. “If there’s a presidential decision issued, we should work in one direction and give it full support.”
Two years ago, Widodo issued a presidential instruction requiring ministers, top officials and the heads of non-ministerial institutions to report any planned new regulations to their relevant coordinating ministries. It appears to have had little effect.
As such there are doubts whether the new regulation will succeed in practice when any formal change in the way ministers interact can only come from an amendment to the law on government structure itself. Under that measure, all Cabinet ministers adhere to the same hierarchy and report directly to the president.
Much will depend on whether Widodo is willing to share some of his power, something he hasn’t been inclined to do so far, and how much personal backing he will give senior ministers and whether they have the strength of character to ensure their instructions are carried out.
Forging the 11 economic ministers into a coherent team has always been a problem, with an entrenched nationalist bureaucracy routinely ignoring government dictates and often demonstrating little regard for foreign investors.
Throughout Widodo’s presidency, for example, the Manpower Ministry has made it increasingly difficult for foreigners to secure work permits, despite the growing need for new investment and a ratio of foreign to local workers that is the lowest in the region.
Contradictions exist elsewhere as well. The government recently gave the go-ahead for foreigners to become university lecturers, yet Parliament has just passed legislation which will make it more difficult than ever for foreign researchers to work in Indonesia.
Former ministers and government officials continue to question the value of the coordinating ministers when they can’t issue decrees or regulations and are generally powerless to carry out their implied function to keep their ministries on the same track.
Rizal Ramli, the economic coordinating minister in Abdurrahman Wahid’s government, demonstrated the level of frustration by quitting his job in mid-2001 in favor of the finance portfolio because he felt he didn’t have the authority to get things done.
Offered the choice, current Finance Minister Sri Mulyani Indrawati has said privately that she would prefer to stay where she is, rather than take over the coordinating job of much-criticized Darmin Nasution. But finding a replacement for Nasution with enough seniority has reportedly proved difficult.
Indrawati, 52, a former World Bank managing director who friends say has a vision that goes far beyond her portfolio, might be tempted to change her mind if the coordinating minister is given more authority.
Certainly she has the sort of authority and acumen that is needed for the job. But a former senior economic official says Widodo will have to be prepared to devolve more power down the line in an environment where the political ramifications of a second term may be different and less of an obstacle.
Coordinating ministers first appeared in ex-president Suharto’s so-called “Third Development Cabinet” in 1978, covering politics and security, economics and finance, and people’s welfare. It remained that way until 1998, when then-president B J Habibie added a short-lived senior minister for national development.
In 2014, the newly-elected Widodo created the maritime coordinating ministry, responsible for transportation, maritime affairs and fisheries, tourism and, surprisingly, energy and mineral resources — a move that seemed designed to counter the influence of Vice-President Jusuf Kalla.
There had been talk that Widodo would scrap the coordinating ministries in an effort to trim down the Cabinet from 35 to 27. Instead, politics intervened and he ended up adding maritime affairs, which for a year was bizarrely headed by the biggest critic of the concept, Rizal Ramli.
Significantly, the economic coordinating ministry brings together the portfolios of finance, industry, trade, state-owned enterprises, agriculture, public works, manpower, small and medium industry, land and environment and forestry.
As vice-president in the first term of president Susilo Bambang Yudhoyono, Kalla had in fact demonstrated what can be done when someone with political power and a measure of business sense assumes the role of economic coordinator – even if he did annoy Yudhoyono by stealing the limelight.
While businessman Aburizal Bakrie and later economist Boediono were the actual coordinating ministers during the Yudhoyono presidency, it was Kalla who persuaded a reluctant president to bring down gasoline subsidies – as short-lived as that proved to be in the new populist era.
He also talked Yudhoyono into abandoning the country’s reliance on subsidized kerosene and instead switch to liquid petroleum gas (LPG) for domestic use. “That was huge,” says one official involved in the 2007 conversion program, which reached 50 million households and brought US$6.8 billion in savings.
While enigmatic and prickly, Kalla is said to have made all the difference between the Yudhoyono I and Yudhoyono II governments. When he was dropped from the Cabinet in 2009, the economy drifted as the commodity boom began to run out of steam.
Subservient in many ways to the powerful influence of the military leadership, the political and security portfolio incorporates home and foreign affairs, defense, justice, communications, administrative reform, the attorney-general’s office, armed forces, police and the State Intelligence Agency (BIN).
Incumbent Wiranto, whose party failed to hit the percentage threshold in the 2019 parliamentary elections to take any seats, did appear to play an important coordinating role in the government’s response to the street riots following Widodo’s election victory in April.
Currently headed by Puan Maharani, daughter of ex-president Megawati Sukarnoputri, the newly renamed Coordinating Ministry for Human Development and Culture presides over health, education, social and religious affairs, female empowerment, sports and disadvantaged regions and transmigration.
With Maharani now expected to take over as Parliament speaker, and Widodo switching the focus of his second term from infrastructure to education and health, a newly empowered coordinating minister would be expected to become a central figure in his administration.