Yudhoyono Appoints Rajasa Indonesia’s Acting Finance Minister

Indonesian President Susilo Bambang Yudhoyono appointed Coordinating Minister for the Economy Hatta Rajasa as acting finance minister, replacing Agus Martowardojo who will become central bank governor.

Yudhoyono signed the letter appointing Rajasa today, the state secretariat’s office said on its website. Julian Aldrin Pasha, a presidential spokesman, gave no timeframe for Rajasa’s term, saying that it will end before the president completes his five-year term in 2014. Pasha said he doesn’t know when Yudhoyono will appoint a new finance minister.

Rajasa, who will also retain his current role, is taking over Martowardojo’s duties as a government plan to curb fuel subsidies threatens to boost inflation, which accelerated to a 22-month high in March. Bank Indonesia this month lowered its 2013 economic growth forecast to between 6.2 percent and 6.6 percent from a previous estimate of 6.3 percent to 6.8 percent, citing the slower-than-expected recovery in the global economy.

“The dual position can lead to the perception that the government is not serious about the finance ministry,” said Lana Soelistianingsih, an economist at PT Samuel Sekuritas in Jakarta. The limited term “adds to the uncertainty.”

Rajasa, whose daughter is married to Yudhoyono’s son, has been chief economic minister since October 2009 and was previously State Secretary. Martowardojo will replace Bank Indonesia Governor Darmin Nasution, whose term ends May 23.

The appointment of Rajasa is meant to synchronize fiscal policies with development of infrastructure, industry and investment, Firmanzah, a senior official for economic affairs at the presidential office, said by phone today.

Yudhoyono’s administration has sought to cut fuel subsidies and allocate more funding to infrastructure to spur growth. The government limited the use of partially government-funded diesel in January, after protests derailed plans to raise fuel prices in 2012.

To contact the reporters on this story: Berni Moestafa in Jakarta at bmoestafa@bloomberg.net; Novrida Manurung in Jakarta at nmanurung@bloomberg.net

To contact the editor responsible for this story: Shamim Adam at sadam2@bloomberg.net

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