Bad day for markets, SBY mulls Cabinet shakeup
The Jakarta Post, Jakarta
President Susilo Bambang Yudhoyono said on Monday he would evaluate his ministers in October, responding to rising calls for an immediate reshuffle of the economic team amid a rapid deterioration in the country's key economic indicators.
Susilo, who became president last October, had promised to evaluate his Cabinet team after one year in office and to replace ministers who did not perform.
"I will keep my promise on that," Susilo announced during a gathering of editors here Monday, "I will evaluate the performance of all my ministers."
More than 40 editors from leading Asian and European newspapers are meeting in Jakarta for two days beginning Monday. The event is organized by the Konrad Adenaur Foundation in cooperation with The Jakarta Post.
Calls for the replacement of some ministers, especially economic ministers, have increased of late, especially so now that the rupiah has plunged to its weakest level since November 2001;the state budget deficit is under serious threat due to soaring oil prices; and fuel shortages have plagued a number of cities throughout the country in recent weeks. Some analysts have suggested that the rupiah's decline was being exacerbated by the lack of action from the government.
Susilo said he was responsible for the government's performance and he would ask the ministers about what problems they faced and what was needed to solve them.
"I will ask those who seem to have lost their initiative to improve their performance," he told the Asian and European editors at The Dharmawangsa.
Susilo's remarks, however, failed to lift sentiment in the financial markets.
Jakarta shares on Monday tumbled to their lowest level since late December 2004 as investors dumped stocks in panic selling on the rupiah's continued losses. The Jakarta Stock Composite Index plunged by 5.2 percent to close at 994.77. The rupiah closed at Rp 10,840 per U.S. dollar, its weakest level since November 2001.
The government has been under pressure to cut its fuel subsidy expenditures as soon as possible because rising global oil prices were threatening the state budget. As global oil prices increase, (nearly US$70 on Monday) the state oil company needs more dollars to pay for its oil imports. These two factors are the main pressure points on the local unit, which is worsened by the slow response of the government, particularly with regard to the politically sensitive fuel subsidy issue.
"The Cabinet team must be immediately changed because they have not responded properly to the situation," said lawmaker Effendi Choirie of the National Awakening Party (PKB).
A handful of legislators from the Golkar Party, normally staunch supporters of this administration, are also making the same call.
"To prevent the economic conditions from worsening further, Susilo must not hesitate in replacing the economic team," said Yudhi Krisnandi.
Meanwhile, Speaker of the People's Consultative Assembly (MPR) Hidayat Nur Wahid said that evaluation of the Cabinet was necessary to detect where things had gone wrong in managing the economy.
But he added that any shakeup in the Cabinet was up to the President to decide.