(Bloomberg) -- Indonesia’s President-elect Prabowo Subianto said that his cabinet may consist of “many ministers” serving under incumbent leader Joko Widodo, a move that could ensure policy continuity in Southeast Asia’s largest economy.
“Just like Jokowi, I’m also looking for the best, the people who will be able to deliver. If those people are still good, we will definitely ask them to join us again,” Prabowo said in a speech at the BNI Investor Daily Summit on Wednesday.
Prabowo, who currently serves as Jokowi’s defense minister, is set to be sworn in as president on Oct. 20. He is expected to announce his cabinet shortly after, with reports that he could form a much bigger government to help him achieve his policy priorities. The incoming president has also secured the backing of a sizable majority in parliament.
A big coalition government is justifiable given Indonesia is an expansive and diverse country, Prabowo said. He also emphasized the importance of harmonious and collaborative leadership to the business climate. “No one goes to the market if there is a riot, right?”
The latest pronouncements should ease any concerns of abrupt policy changes after Jokowi ends his decade-long presidency, especially with those ministers who have proven to be credible and capable in their track record, said David Sumual, chief economist at PT Bank Central Asia.
“This gives investors some reassurance that the cabinet lineup may be on balance, more technocratic,” said Euben Paracuelles, a Nomura Holdings Inc. economist in Singapore.
Self-Sufficiency
In a sweeping speech delivered to an audience of bankers and investors, Prabowo pledged to continue much of his predecessor’s programs, which includes refining more of Indonesia’s minerals onshore, and ensuring food and energy security.
“Our survival as a nation depends on the basics, the first of which is food self-sufficiency,” Prabowo said, adding that Indonesia should be able to attain that in four years. “A nation must be able to produce and feed its people.”
He also wants to improve the distribution of subsidies to ensure that they benefit low-income households. This includes cleaning up the government’s data on target beneficiaries then tapping the networks of Indonesia’s postal service and various banks to deliver subsidies directly to poor families.
Prabowo is inheriting an economy that has grown at a steady pace of 5% over the last decade. He aims to accelerate that further to 8% during his term — a level last hit in 1995.
Slowing manufacturing activity and consumer confidence will pose headwinds to that goal. Stubborn unemployment has also cut down Indonesia’s middle-class by over 9 million people in the last five years. The incoming president also said he is watching the “huge risks” posed by worsening geopolitical conflicts and global volatility.
Prabowo said he’s often ridiculed for targeting 8% annual growth, but he has “learned that we must aim for the highest” and set the tone for his team to keep working hard on the goal, even though it may be difficult to achieve.
“I’m aiming for 8%. If that doesn’t happen, then 7.5%, or 7%,” Prabowo said. “But what if we can actually reach 9%?”
--With assistance from Eddie Spence.
(Updated with analyst comments.)
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