Who is he?
Hatta Rajasa has served as Indonesia’s economic coordinating minister since 2009 and as state secretary since 2007. Rajasa previously served as transportation minister from 2004 to 2009, and research and technology minister from 2001 to 2004. He is a contender in the upcoming 2014 presidential elections and chairman of the National Mandate Party, which is part of President Susilo Bambang Yudhoyono’s ruling coalition.
Why is he in the news?
President Yudhoyono appointed Rajasa as acting finance minister on April 19, replacing reformist technocrat and soon-to-be central bank governor Agus Martowardojo. Rajasa’s appointment, which will end before Yudhoyono completes his five year term in 2014, surprised investors expecting the outgoing finance minister’s successor to be a seasoned technocrat. Rajasa is Indonesia’s third finance minister in three years, and it is unclear if he will hold the post for the remainder of Yudhoyono’s term.
Analysts have long warned that a change in the finance portfolio from a technocrat to someone more willing to enable special interests could be a major misstep for Indonesia’s economy. Rajasa is the alleged architect of Indonesia’s recent bout of economic protectionist policies and his appointment adds uncertainty to fiscal and monetary policy at a time when the rupiah and state budget face increasing pressure.
What can we expect from him?
Rajasa, in an effort to deflect fears of a spending spree before the 2014 elections, pledged on April 22 to support government efforts to curb politically sensitive fuel subsidies and follow his predecessor’s conservative fiscal policy. Rajasa’s history of promoting protectionist policies, however, suggests that he may avoid significant reforms. Moreover, his concurrent presidential bid and limited background in financial policy raise questions about his ability to keep Indonesia’s fiscal discipline in check.