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Reshuffle: Bloomberg, Indonesia’s Prabowo Ousts Sri Mulyani, Risks Turmoil

“…a show of continuity…”

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Purbaya Yudhi Sadewa, Indonesia’s new finance minister, previously chairman of the Deposit Insurance Corporation since 2020.

Indonesia President Prabowo Fired Indrawati After She Offered to Resign Twice, from Bloomberg

By Grace Sihombing for Bloomberg, Sept 10, 2025 (excerpts)

“…One figure central to advising Prabowo was former senior minister Luhut Pandjaitan. He suggested an economist who had worked with him for years when he was coordinating minister for maritime and investment. He was no-nonsense, neutral, someone markets could trust. He was known within the finance ministry, but not to most of Prabowo’s inner circle: Purbaya Yudhi Sadewa.

“Luhut couldn’t be reached for comment.

“Purbaya, 61, also got a call from the presidential palace Monday, summoning him for a meeting. He would later say he thought it was a prank, and found himself later alongside four other new ministers at a swearing in ceremony.

“The call to Indrawati from the presidential palace also came Monday, when she was directing a ministerial meeting in the afternoon. She stepped out to speak on the phone. When she returned, she dismissed everyone except her deputies and top officials. She then waited for the news of her replacement to be announced.

“The next day, she and Purbaya attended a handover ceremony, as a show of continuity. Hundreds of finance ministry officials cheered her arrival, and she appeared to be tearing up.

“In her remarks, Indrawati apologized for any missteps, saying “no human is perfect.”

“I entrust you to continue to safeguard state finances,” she told her former colleagues, urging them to “help the new leadership.”

“She then said farewell, and asked her privacy be respected “as an ordinary citizen…” Read the whole piece at https://www.bloomberg.com/news/articles/2025-09-10/prabowo-fired-indrawati-after-she-offered-to-resign-twice.

https://www.bloomberg.com/news/articles/2025-09-08/indonesia-to-reshuffle-finance-officials-cabinet-after-protests

In earlier news…

Indonesia’s Finance Chief Reassures Investors on Fiscal Discipline in Prabowo Era

By Grace Sihombing, Prima Wirayani and Haslinda Amin for Bloomberg, June 25, 2025

Indonesia’s former Finance Minister Sri Mulyani Indrawati
“Central to Cementing Indonesia’s Credibility,” Bloomberg

Indonesia’s finance minister presented a unified front with President Prabowo Subianto, stressing that the government is committed to fiscal discipline while rolling out the new leader’s priority programs. Bonds extended a rally.

“We have a very good relationship. We have a very professional” relationship, Finance Minister Sri Mulyani Indrawati said in an interview with Bloomberg Television on Wednesday, when asked if she will remain in her post for the long term. “President Prabowo is very open, very frank in discussing what he wants. But at the same time, he also values the input coming from us.”

Read the whole piece at https://www.bloomberg.com/news/articles/2025-06-25/indonesia-on-track-to-keep-modest-budget-deficit-indrawati-says.

***

Emerging Markets’ Fragile Five Are Breaking Bad Again, Bloomberg

Bloomberg Opinion By Shuli Ren, Bloomberg Columnist, March 21, 2025

Investors are looking beyond the US. But Indonesia and Turkey are not behaving well. 

It’s not a zero-sum game. Even as global investors spooked by Donald Trump’s unpredictable policies are trimming positions in US stocks, it doesn’t necessarily mean they will plow into emerging markets. Developing nations have to earn foreigners’ trust first.

Unfortunately, some of the biggest are shooting themselves in the foot…

(Excerpts)

Indonesia and Turkey, two members of the Fragile Five …, are back in the limelight…

On Tuesday, the Jakarta Composite Index witnessed its steepest intraday decline in more than a decade over speculation that the nation’s well-respected finance minister had decided to resign…

…Indonesian President Prabowo Subianto’s ambitious plan to create a new sovereign wealth fund, modeled on Singapore’s investment arm Temasek Holdings Pte, has alarmed investors. Jakarta already has a $20 billion wealth fund. But Prabowo wanted more.

The new one, called Danantara Indonesia, is a completely different animal. It will eventually manage $900 billion and house state-owned enterprises, including oil and natural gas producer Pertamina, PT Telkom Indonesia and PT Bank Mandiri. Bank Mandiri lost about one-third of its market value since Danantara was launched on Feb. 24.

Source – https://www.bloomberg.com/opinion/articles/2025-03-20/turkey-indonesia-emerging-markets-fragile-five-are-breaking-bad-again

Investors now fear Indonesia is losing the fiscal discipline established during former President Joko Widodo’s years. The law limits the government’s budget deficit to 3% of gross domestic product, but that was not enough for Prabowo’s big-ticket plans and his ambitious 8% growth target. Danantara could be a backdoor channel to borrow off balance sheet and spend. Analysts worry that Indonesians will be so spooked that they pull their deposits out of the three big SOE banks controlled by Danantara…

…But the Fragile Five’s fundamental weaknesses have not completely given away. Indonesia’s current account flipped back into the red last year, while the true level of the fiscal deficit has become a big mystery. …

…To attract overseas capital, Indonesia and Turkey need to lessen — not to amplify — their fragility.

Baca selengkapnya https://www.bloomberg.com/opinion/articles/2025-03-20/turkey-indonesia-emerging-markets-fragile-five-are-breaking-bad-again.

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