(Bloomberg) — President of Indonesia Joko WidodoBehind-the-scenes support for presidential candidates has caused rifts in the government, with several cabinet ministers considering resignation.
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Among them is the Minister of Finance. Shri Mulyani IndrawatiHe is essential to stabilizing Southeast Asia's largest economy, said the people, who asked not to be identified discussing confidential information. Other people considering resignation include Foreign Minister Retno Marsudi and Minister of Public Works and Housing Basuki Hadimuljono.
The situation is very fluid and the cabinet could decide to stay, the people said. He said his resignation may not be announced immediately as he is concerned about a possible backlash against the rupiah and the market.
The Indonesian rupiah widened its decline to 0.5% as of 10:33 a.m. local time, falling to its lowest level against the dollar since early November. The currency fell 2.5% in January, its worst month since October, amid election uncertainty and a rebound in the U.S. dollar. This prompted Bank Indonesia to intervene in foreign exchange spot, futures and bond markets, said director Eddy Sushianto.
The cabinet rift has put the spotlight on Jokowi, who is believed to be plotting to secure a successor in the next presidential election.
His behind-the-scenes support is Prabowo Subianto This is unusual given that the former general is in the opposition party and is campaigning for a coalition government in opposition to Jokowi's own party. Prabowo is currently defense minister and was appointed to the post by Jokowi as part of a reconciliation deal after the two men had a bitter rivalry in the 2019 election.
final semester
Jokowi's support for Prabowo has caused anxiety among ministers in his Indonesian Democratic Party of Struggle (PDI-P). Tensions have been high since the birth of Jokowi's first son. Gibran Rakabumin RakaSources said he was chosen as the vice-presidential candidate for the defense minister following a controversial Constitutional Court ruling.
Approximately 204 million Indonesians are scheduled to choose their next leader on February 14th. It is unusual for a member of Jokowi's cabinet to resign before the current government's term expires in October, when Jokowi ends his second and final term.
At stake for Jokowi is the continuation of policies that include refining raw minerals on land and building a new $34 billion capital, helping Indonesia achieve 7% economic growth by 2045. He argued that this was necessary to achieve the goals of the United States and become a high-income nation. .
In response to questions from Bloomberg News, Presidential Special Staff Coordinator Ali Dwipayana pointed to a previous statement in which he said all Cabinet members remain committed to uniting and supporting the president until the end of his term. A Foreign Ministry spokesperson said Marsudi was focused on ensuring Indonesia's leadership on global issues, but representatives for Hadimuljono and Prabowo did not immediately respond to requests for comment.
Indrawati told reporters she was focused on her job despite rumors of her resignation growing last week. But in her recent meeting with certain senior officials, she is already focused on protecting her department beyond her term. She said Ms. Indrawati is not from the PDI-P party.
“This is not good news for investors, especially at a time when politics can be volatile in the run-up to elections,” said Vishnu Varasan, head of economics and strategy at Mizuho Bank in Singapore. “Sri Mulyani has a lot of appeal to the market. She is a very prominent figure and there is an element of her familiarity and reassurance that she is a steady hand,” he said. Ta.
The finance minister is under pressure from both Jokowi and Prabowo to speed up spending, particularly social assistance funding, which many see as beneficial to the defense minister's campaign, the people said. . When he met with ministry leaders on January 20 in Bogor, about an hour's drive from the capital Jakarta, he emphasized the need for officials to protect the ministry's budget.
This year, Prime Minister Indrawati called for adjustments to spending through a mechanism called “self-adjustment” that would limit additional spending by ministries. This was reported by local news station Tempo earlier this week.
split cabinet
Jokowi's vast network of volunteers began supporting Prabowo as early as October, and he has held multiple meetings with the former general since late 2022, the most recent on January 5. It was a private dinner party. Prabowo is leading in opinion polls by a wide margin. Outperforming the other two candidates.
According to people familiar with the matter, Jokowi's support for Prabowo did not sit well with some ministers in the ruling PDI-P party. The sources said Jokowi and Gibran's support for Prabowo goes against the party's position of supporting former Central Java governor Ganjar Pranowo. Ganjar was once promoted as the president's successor before they fell out.
Officials say the Cabinet is currently divided based on political loyalties. Officials say Prabowo's unsupportive cabinet members are hostile to the president because of his stance, while others are concerned that Jokowi's attempts to expand his influence could threaten democracy.
democratic rights
Jokowi himself asserted his right to support his favored successor. “It's a democratic right, it's a political right for everyone. It's the same for every minister. The president is allowed to campaign, he's allowed to take sides.” he said at the Air Force aircraft handover ceremony on Wednesday. Mr. Prabowo also accompanied him.
“But most importantly, we cannot use state facilities during election campaigns. We are public servants and political bureaucrats. This cannot be tolerated,” he added.
–With assistance from Soraya Permatasari, Claire Jiao, and Ruth Carson.
(Updates with rupiah movement and central bank intervention in 4th paragraph.)
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