Thursday, October 22, 2009

THE ECONOMIST: Indonesia's new cabinet: Like the last lot

Source: (click to view full assessment): The Economist

Optimism abounded when Susilo Bambang Yudhoyono (pictured) was re-elected Indonesian president in July in a landslide. Analysts at home and abroad hoped he would use his strong mandate to appoint a more reform-minded cabinet for his second five-year term. No longer would the former general be beholden to venal political parties. Competent technocrats would take over to drive the nation on, lifting its annual growth rates from an average of 5-6% in his first term to his target of 7%. Boosting optimism, his Democratic Party had soared on his coat-tails to become the biggest party in parliament.

Mr Yudhoyono, however, has been reading a different script. Twenty out of the 37 cabinet-level appointments the president announced on October 21st are from parties that have promised support in parliament. Hardly any of these are seen as experienced managers, let alone competent ones. A conspicuous number have no background relevant to their portfolios.

As in his first five years, the president looks as if he will rely on sound, strong, technocrat-led monetary and fiscal policy and hope it will translate into higher rates of growth. But that did not really happen in the more benign global environment of his first term, so it is hard to see why it should now. Simply muddling along in areas such as infrastructure, education, health, agriculture and mines and energy might keep Indonesia’s economic growth at present, respectable levels. But it is unlikely to help South-East Asia’s largest economy catch up with faster-growing China and India. With luck, the legacy of the Yudhoyono decade may be a strengthened democracy; it seems unlikely to be a transformed economy…