Widodo ministers vault over fences in drive for change

Bloomberg

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Indonesia President Joko Widodo. Indonesia President Joko Widodo.

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A 1.8 meter (6 foot) barrier stood in the way of Hanif Dhakiri, Indonesia’s new manpower minister, as he checked on practices at a recruitment business in Jakarta. When the door wasn’t opened, Dhakiri vaulted the building’s fence.
Dhakiri found an “inhuman” shelter crammed with workers, and promptly shut the company down for breaking regulations, he said in an interview with Bloomberg TV Indonesia last week. Such are the lengths President Joko Widodo has his cabinet going to to overcome corruption, bureaucracy and wasteful spending that weigh on Southeast Asia’s largest economy.
Since starting work on Oct. 27, his ministers have promised to do his bidding, cut fuel subsidies and overhaul permits for investors. Widodo, known as Jokowi, has told leaders of Indonesia’s regions to start financing development or face penalties, as he seeks to revitalize an economy that slowed to its weakest in five years last quarter.
“Jokowi has targeted small changes that add up to a pretty interesting change in approach and that shows momentum,” said Paul Rowland, an independent political analyst in Jakarta. “They’re all practical things. That does augur well. And they’re happening quickly.”
The moves show Jokowi, a former furniture businessman, is starting to gain traction on his election promises, even as challenges remain from the opposition gaining control of parliament to a lack of power within his own political party.
Foreign fund investors have sold almost $1 billion of Indonesian stocks in the past three months as they scale back expectations that the former Jakarta governor will be able to deliver reforms.
Budget drag
Among Jokowi’s next steps are to dismantle fuel subsidies that consume a 10th of the national budget, a change that has eluded his predecessors.
Coordinating Minister for Economic Affairs Sofyan Djalil has said a fuel price move will come this month, yet the magnitude and timing is yet to be decided. Jokowi has said the savings will be used to help farmers and fisherman, while also building infrastructure such as irrigation, dams and ports.
On Nov. 3, the government started distributing cards that will eventually give more than 15 million low-income families access to free health care, as well as education for 160,000 children of school age and cash to soften the effect of higher fuel costs. Success with the card program and significantly reduced subsidies would be a “reasonably good” start, said Marcus Mietzner, an associate professor at the Australian National University in Canberra.
Different approach
Jokowi’s approach has been different and more forward-thinking than previous leaders who have given handouts after raising fuel prices in response to a crisis, said Achmad Sukarsono, an associate fellow at The Habibie Center in Jakarta.
“You need to give them benefits before you give them the bitter pill,” Sukarsono said. “It’s a new kind of step, showing sincerity behind the fuel price hike policy.”
Cheap fuel is the only benefit many Indonesians have received from the central government so far, he said.
Widodo’s ministers are also more aligned, unlike during the decade-long administration of former president Susilo Bambang Yudhoyono, when ministries acted more independently, Sukarsono said.
Jokowi, who took office on Oct. 20, still has to contend with an opposition that took all the key positions in parliament, including the speakers of the two houses and heads of the committees that formulate bills. This gives the coalition, led by ex-special forces general Prabowo Subianto, who lost the July presidential election, the ability to set the lawmaking agenda and challenge the government with parliamentary inquiries.
Distracted opposition
Members of Jokowi’s coalition last month tried to propose their own rival speaker, yet this won’t result in a change of power, Sukarsono said. What the parliamentary infighting has done is distract the opposition for a while, he said.
“We can have two governments here,” Sukarsono said, adding that Jokowi needs to strengthen his power base. “The politics is not supporting Jokowi, but it’s not challenging him, so he has the space.”
Djalil, a former state-enterprises chief under Yudhoyono, said in an interview that his new boss was a “hands-on” manager who called in ministers to give briefings like a doctor seeing patients. At his first cabinet meeting, Jokowi stressed priorities including curbing inequality and ministers following his vision, rather than having their own sectoral egos.
‘Work immediately’
The priorities for Djalil include cutting red tape by moving ministry permits into a one-stop service under the investment board to speed development.
For Dhakiri, the labor minister driven by memories of his own mother’s travails as a migrant worker, what’s needed is better management so that government services work.
Signs of a bureaucratic shake-up are emerging. Sudirman Said, the energy and mining chief, replaced his ministry’s director general for oil and gas as he seeks to revitalize an industry that has been in a long-term decline.
As Jakarta governor, Jokowi made spot inspections of government offices to test processes, raised tax revenue by moving collection online, kick started infrastructure projects such as a monorail line and fired underperforming officials.
Jokowi has told his new team not to waste time.
“He said work immediately,” Andrinof Chaniago, the minister for planning, said in an interview last week.

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