The BGA Indonesia Team, led by Managing Director Douglas Ramage, wrote an update to clients on Indonesia’s recent cabinet reshuffle.

Context

  • Indonesian President Joko “Jokowi” Widodo reshuffled three key ministers August 19 — a mere 62 days before his departure. He also appointed an additional vice minister, along with three agency heads. The list of appointees is as follows:
    • Supratman Andi Agtas as minister of law and human rights.
    • Bahlil Lahadalia as minister of energy and mineral resources.
    • Rosan Roeslani as minister of investment.
    • Angga Raka Prabowo as vice minister of communication and informatics.
    • Taruna Ikrar as head of the Drug and Food Supervisory Agency.
    • Dadan Hindayana as head of the newly established National Nutrition Agency.
    • Hasan Nasbi as head of the newly established Presidential Communications Office.
  • Many analysts view this move as an effort by Jokowi to maintain his influence after the inauguration of President-elect Prabowo Subianto October 20 and in the lead-up to the November 2024 regional elections. Notably, Bahlil’s shift to the Energy and Mineral Resources Ministry is expected to expedite mining permits for politically influential religious organizations; Supratman’s appointment to the Law and Human Rights Ministry is seen as a bid to exert greater control over legislation and political parties. Both appointees replace figures associated with the Indonesian Democratic Party of Struggle, Jokowi’s estranged party and now his strongest opposition.
  • The decision also signals goodwill toward Prabowo, reinforcing his platform and growing clout. Most postings were likely selected in consultation with the president-elect, subtly expanding the ranks of his loyalists within the administration. Nonetheless, Prabowo’s potential gains from their brief tenure are relatively modest, and the permanence of these appointments is not guaranteed.

Significance

  • With just two months until the transition to Indonesia’s next president, the appointees are unlikely to introduce any dramatic new policies. Instead, most are expected to serve as advisers to Prabowo, influencing his decisions on their respective portfolios shortly after the inauguration. Bahlil, being closely tied to Jokowi, may pursue a more distinct and assertive agenda.
  • Although policy shifts are unlikely, the appointees are expected to focus on calculated bureaucratic changes. They may promote trusted officials to support Prabowo’s future agenda and secure their influence in the longer term. These bureaucratic adjustments could have lasting effects, as bureaucrats tend to remain, at least for a longer period, after changes in leadership.

Implications

  • While the appointments may provide avenues to connect with the incoming administration, long-term advocacy or relationship-building initiatives should be postponed after the transition, given the uncertain tenure of the appointees. However, companies whose business could be immediately impacted by their short-term decisions should consider engagement, including with their special or expert staff, who often drive major decisions.
  • As power consolidates within the Jokowi-Prabowo alliance, the regional and local elections in November increasingly favor their side. This trend is evident in Ridwan Kamil’s bid for Jakarta governor, supported by eight of nine parliamentary parties. Companies with regional interests should watch these developments closely because candidates backed by the incoming ruling coalition will likely gain significant advantages.

We will continue to keep you updated on developments in Indonesia as they occur. If you have any questions or comments, please contact BGA Indonesia Managing Director Douglas Ramage at dramage@bowergroupasia.com.

Best regards,

BGA Indonesia Team

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Managing Director

Doug is the founding managing director of BowerGroupAsia Indonesia in Jakarta. He is one of the foremost experts on Indonesia’s political economy, business and regulatory affairs, with over 30 years’ experience living and working in the country. In addition to his role at BGA, Doug serves as chair of the American Chamber of Commerce (AmCham) in Indonesia, the country’s largest international business association.  Doug works closely with multinational companies and the government to find solutions to policies that impact Indonesia’s competitiveness, foreign investment opportunities and market access. He is skilled at leading teams to develop commercially strategic advocacy efforts that ... Read More