Purbaya aims to spur Indonesia’s growth

When Purbaya Yudhi Sadewa got a call summoning him to Indonesia’s presidential palace, he immediately thought it was a prank. Just a few hours later, he was hurriedly sworn in as finance minister.

- CLAIRE JIAO CHANDRA ASMARA GRACE SIHOMBING

“I thought I was being scammed. I checked whether the number was correct, and turned out it was true,’ Mr Purbaya told reporters on Monday. “It's a shock.”

Suddenly gone was longtime finance minister Sri Mulyani Indrawati, a former World Bank executive who held a firm budgetary line through several administrations and won the respect of international investors. Her fiscal discipline did not gel with President Prabowo Subianto or the protesters who stormed her house in August amid nationwide demonstrations over livelihood issues, and she lasted less than a year in Mr Prabowo's government.

Her successor Mr Purbaya says a better economy will placate the “small part” of the population who have taken to the streets.

“Once I create economic growth of 6%, 7%, that will disappear automatically. They will be busy looking for work and eating well instead of protesting,” Mr Purbaya said in a late Monday briefing following his appointment. “The president’s message is to reverse the economic course, create faster economic growth, as quickly as possible.”

Mr Prabowo wants to bulk up outlays to supercharge Indonesia's growth as Southeast Asia's largest economy loses momentum and discontent mounts, aiming to avoid more protests. At the same time, investors are worried about the ramifications of fiscal largess and the potential for a budget blowout without Ms Indrawati around to check Mr Prabowo’s demands. Indonesian assets slumped on news of her departure.

“His approach remains to be seen but there is inherent pressure building to gear fiscal policies towards becoming more populist,” Oversea-Chinese Banking Corp economist Lavanya Venkateswaran said of Mr Purbaya.

The recent protests erupted after revelations over perks for lawmakers, which have since been wound back. But discontent has been brewing for months over the cost of living in Ms Indrawati’s economy, with buzzwords to explain why people have stopped shopping.