Analysis: Megawati's juggling act

The money markets reacted well to the new cabinet

By regional analyst Nick Nugent

The delay in naming her first cabinet had caused speculation that Indonesia's new President, Megawati Sukarnoputri, was having difficulty balancing competing political interests.

The line-up she has announced shares power between the largest political parties with her own Democratic Party of Struggle or PDI-P, as expected, taking the largest number of cabinet seats.

Some PDI-P appointees had been sacked by the previous president, Abdurrahman Wahid, which was one of the factors that led to his own dismissal from office enabling Megawati, the former vice president, to take over.

Dorodjatun Kuntoro-Jakti: One of Megawati's technocrats

However, it is not only politicians who have been rewarded. A notable feature of what Megawati is calling her "gotong royong" or "mutual co-operation" cabinet is the number of non-party technocrats included.

They are led by the respected economist, Dorodjatun Kuntoro-Jakti, who takes on the role of chief economic and finance minister.

As ambassador to Washington, Dordjatun has been closely involved in Indonesia's dealings with the International Monetary Fund, which has been playing a pivotal role in trying to help the country out of its difficult financial straits.

'Market friendly'

Vice President Hamzah Haz described it as a "market friendly" government, an assessment born out by an immediate rise in the all-important rupiah to dollar exchange rate, which serves as an indicator of both political and economic confidence.

Separatist rebellions and the economy are Megawati's immediate concerns

A close aide of the president, former banker Laksamana Sukardi, has been given responsibility for state enterprises.

The IMF has insisted that the government speed up the process of disposing of  state and bankrupt assets and enterprises before it will release a further tranche of an agreed loan.  

Another noteworthy aspect of the cabinet is the number of former military men who have been included.

Respected cabinet veteran and former general Susilo Bambang Yudhoyono returns to the senior position of chief political and security minister.

Home minister Hari Sabarno is expected to formalise his retirement from the army so that no serving military officers occupy cabinet jobs.

Experience over politics

The president has followed an example set by her predecessor in putting a civilian, Matori Abdul Djalil, in charge of defence.

Matori Abdul Djalil: Civilian in charge of defence

In another indication of preference for experience over political leanings, the post of foreign minister has gone to a professional diplomat, Hassan Wirajuda.

Meanwhile, remarks made by the newly appointed presidential spokesman, Bambang Kesowo, have given further clues as to the priorities of Megawati government, who are conscious that they have only three years before fresh elections.

Mr Kesowo told the Jakarta Post that the new president's first priority was to restore political stability and especially relations between the executive and the legislature, which became badly strained under President Wahid.

She will have been reassured by the strong endorsement of her cabinet from the chairmen of both houses of parliament. Also important, said Mr Kesowo, was to improve the efficiency of government.

He was understood to be referring not only to administrative reform, but also a need to strengthen the machinery of law enforcement and also to tackling Indonesia's ubiquitous corruption, which he said were preoccupations of the new president.

On foreign affairs Mr Kesowo spoke about the need for Indonesia to "regain the trust of the international community", which was taken to be a reference in particular to the damage to Indonesia's reputation over the violent secession of East Timor in 1999.

Corruption

Even before the new government was announced, President Megawati had been reminded of some of the most pressing problems her government faces.

The naming of Tommy Suharto, son of former president Suharto, as key suspect in a spate of bombing in Jakarta and the killing of a judge, is a reminder that despite having been convicted of corruption he has managed to evade capture for several months.

Megawati will also have to decide whether to proceed with corruption charges against Tommy Suharto's father - who has so far evaded prosecution because of his ill health - and other members of the so-called Cendana Group who are alleged to have enriched themselves at the expense of the nation. Cendana is the name of the central Jakarta street where the former president lives.

The kidnapping by separatists of a TV crew in Aceh and the threat to block oil supplies by inhabitants of another Sumatran province, Riau - two of the nation's richest provinces - suggest she has no time to spare in resolving the vital issue of regional political and financial autonomy if she is to prevent further attempts at secession.