Indonesian President Joko Widodo will announce a much-awaited Cabinet reshuffle today (Aug 12), as he aims to boost investor confidence and fix his economy, which has seen the slowest growth since 2009.
Former central bank chief Darmin Nasution, who during his tenure managed to keep the rupiah exchange rate against the United States dollar stable, will replace Coordinating Minister for Economic Affairs Sofyan Djalil, who will then fill in as the head of the national development planning agency, a source who spoke on condition of anonymity told The Straits Times.
Trade Minister Rachmat Gobel is among the several ministers that will go. Some ministers who will be affected by the reshuffle will be appointed as ambassadors.
When asked by Kompas.com late on Tuesday, Vice-President Jusuf Kalla said the reshuffle would affect a coordinating minister, a minister and a head of a government agency.
A coordinating minister is a senior minister position who helps oversee ministers under his portfolio.
The four coordinating ministers in charge of: political, legal and security affairs; economy; maritime affairs; and human development and culture.
The announcement of the reshuffle is slated for early Wednesday afternoon.
Indonesia recorded a quarterly economic growth lower than 5 per cent twice this year, a level not seen since 2009, on the back of lower government spending, a weakening rupiah and a lack of coordination among ministers, which in turn affected investor confidence.
A slowing economy in China has also affected Indonesia's exports, while the impending increase in the US interest rate puts only greater pressure on the rupiah, which is now among Asia's worst performing currencies.
This came as the Joko administration was perceived by investors and analysts to have continued to battle political intervention from the elites of his ruling Indonesian Democratic Party - Struggle (PDI-P), as was reflected in some of his decisions - including most recently the appointment of a politician close to the PDI-P elites as head of Indonesia's intelligence unit (BIN).
The declining investor confidence is reflected in the Indonesia's stock market index, which has fallen more than 7 per cent this year.
Hopes for reforms, however, are still alive as Mr Joko still has the strong political capital to bring them forward. The government has also recently started on infrastructure projects that will create jobs and boost the economy.
And Mr Joko generally has maintained good relations with the elites in Parliament, including those from the opposition, which gives the President a good balance against the elites of his own political party, who have at times unexpectedly undermined his government.