Indonesia's Jokowi taps election archrival for defense minister

Indonesian President Joko Widodo announced his second-term cabinet on Wednesday, retaining former World Bank executive Sri Mulyani Indrawati as finance minister and tapping the opposition leader as he seeks to push through reforms.

Widodo named his chief rival and former general Prabowo Subianto as defense minister, angering rights activists given accusations that he allowed abuses against civilians while in charge of Indonesia's special forces.

The co-founder of ride-sharing and payments firm Gojek as well as a former chairman of Inter Milan soccer club were also named to the cabinet, confirming earlier reports.

The make-up of the new cabinet was closely watched to see how many technocrats expected to heed Widodo's agenda to boost economic growth and investment were included. In the end, around half of the 34 new ministers are technocrats valued more for expertise in their fields than political loyalties.

"First don't be corrupt, create a clean system. Second, no separate ministerial vision and mission, only the presidential vision and mission," Widodo said while seated on the steps of the palace flanked by his ministers.

Indonesia last month saw the biggest student demonstrations in decades opposing new bills that critics say undermined the powers of the anti-corruption agency, known as KPK, and also threatened basic rights.

An activist group live-streamed a concert supporting anti-corruption efforts on Wednesday, and students have pledged to hold further rallies next week to pressure the government on a range of issues.

WIDODO BRINGS KEY RIVAL ABOARD

By bringing in Prabowo, Widodo's sole challenger in April's bitterly fought election, could make it easier for the government to enact legislation. With Prabowo's Gerindra party aboard the government now commands a 74% majority in parliament.

After his swearing in, a relaxed-looking Prabowo said he would immediately head to his new ministry. "I will learn the latest situation and then we will begin work," he told reporters.

Widodo chose ex-industry minister and ruling Golkar party chairman Airlangga Hartarto to head his economic team, while confirming the reappointment of economist Indrawati as finance minister. Indrawati has served in various administrations.

The administration will aim to revise 74 laws hampering investment by applying "omnibus laws", Widodo said, referring to legislation that encompasses diverse and unrelated issues.

REVIVE INVESTMENT

Luhut Pandjaitan, who was retained as coordinating minister for maritime affairs, also overseeing the natural resources sector and investment, said Widodo had ordered drafts of "omnibus laws" to be completed this year.

The aim was "to provide as much simplification to investment access as possible so foreign direct investment (FDI) can come in," said Pandjaitan.

FDI has been sluggish in recent years, due to factors such as regulatory uncertainty and weak commodity prices, and Widodo has complained Indonesia has not attracted as much manufacturing investment seeking relocation out of China compared to rivals.

Yose Rizal Damuri at Jakarta's Center for Strategic and International Studies said the presence of political party figures in the cabinet remained significant, and could hinder Widodo's reform campaign. "Party representatives may have mandates from their own parties," he said.

Widodo defended his political appointments, saying what was important is that they "are able to divide their time well".

Among the technocrats, Gojek CEO Nadiem Makarim was named education and culture minister. He said he had been given the mandate to "break down" the system to "innovate" and would focus on developing "competency-based and character-based" education.

"With 300,000 schools and 50 million students... the role of technology is going to be very big in impacting everything," Makarim told reporters.

Among other important economic posts, Arifin Tasrif, a former head of the state fertilizer maker, was named minister of energy and mineral resources. Erick Thohir, a billionaire businessman who was chairman of Inter Milan and ran Widodo's re-election campaign, was allotted the portfolio in charge of state-owned enterprises.