Suahasil Nazara's Impossible Mission

TEMPO.CO, Jakarta - Financial markets briefly turned more upbeat when Suahasil Nazara was promoted to Finance Minister. His reputation as a diligent technocrat, removed from the clamor of politics, raised hopes that the fiscal adventurism of his predecessor, Purbaya Yudhi Sadewa, was coming to an end.

That optimism began to fade as the circumstances surrounding the reshuffle emerged. As Tempo reports in this edition, President Prabowo Subianto dismissed Purbaya primarily because of an internal dispute at the Finance Ministry over the rotation of hundreds of officials, not because the president had decided to change fiscal direction.

Purbaya’s removal represents yet another assertion of Prabowo’s authority over policy. Even a Finance Minister can be dispensed with when he steps out of line. Suahasil may be less impulsive and more reassuring to investors, but his room for maneuver will remain limited.

Within days of his appointment, Suahasil received a blunt warning against pursuing fiscal conservatism that conflicts with the President’s wishes. Several politicians from Prabowo’s governing coalition have challenged the statutory budget deficit ceiling, set at 3 percent of gross domestic product under Article 12 of the State Finance Law. Their intervention dovetails with Prabowo’s longstanding desire to allow the government to borrow more, unburdened by deficit limits.