Can Indonesia bear the burden of Subianto’s big government?

Indonesia’s new president, Prabowo Subianto, has taken office after being officially sworn in on Sunday. One of his first moves was to officially inaugurate a total of 48 ministers, with 22 new ministries and agencies, to help rule the country over the next 5 years.
Several of them have been created by merging and splitting previous ministries. For example, the Ministry of Research and Technology was reportedly split into three: the Ministry of Culture, the Ministry of Higher Education, and the Ministry of Education, Research, and Technology.
This is a hot topic in Indonesia, where investors have long complained about bureaucracy and inefficiency of government. For comparison, Vietnam has 17 ministries and Indonesia’s neighbor the Philippines has 22.
Indonesia’s parliament recently passed a new law granting Prabowo Subianto more powers to restructure his cabinet. The old law included a legal limit to the number of ministries, allowing up to 34, but the limit has now been removed.
“I want to create a united and strong government,” Subianto told an economic forum last week. He added, “the coalition must be big, and some will say my cabinet is fat.”
Indonesian political analyst Ujang Koomarudin said the change has allowed a “wider distribution of positions for Subianto’s allies” in top positions, opening the way to a bloated cabinet. At the same time, this means Subianto will be able to secure the support of as many political parties as possible for his government.
Subianto is backed by massive coalition which includes seven of eight parliamentary parties, or some 82% of parliamentary seats. If Subianto manages to bring the country’s biggest political faction, Democratic Party of Struggle (PDI-P) into his bloc, there would simply be no opposition left in the assembly.
“Indeed, in a healthy government system, the opposition is necessary, and its existence is essential for overseeing the work and policies implemented by the government. If the opposition is completely absent, it can lead to an unhealthy democratic system,” says Feri Amsari, an Indonesian constitutional law expert.
Countries without strong opposition increase the risk of turning authoritarian, and some in Indonesia are already wary of a repeat of the autocratic Soeharto regime in the late 1990s.
The so-called “fat cabinet” structure will change internal government structure, and the consolidation process is likely to take a longer time. Additionally, a bloated government will strain the state budget by financing routine expenditures, procurement of office buildings, infrastructure, and facilities for ministers and related officials.
Research has also shown that the expansion of ministries and agencies leads to a rise in employee-related costs.
Indonesian economic analyst and director of the Center for Economic Studies (CELIOS), Bhima Yudhistira, is worried about excessive spending.
“With the structure of both ministries and agencies projected to be run by President Prabowo, there will be an additional cost of up to 1.6 trillion rupiah [some $103 million, €95 million] for each ministry per year. If 10 ministries are added, this could total more than 16 trillion rupiah,” he said.
More ministries will also mean longer bureaucratic processes. Bhima is also concerned that this would harm investment climate in Indonesia — and derail Subianto’s ambition to raise Indonesia’s economic growth rate to 8% from the current 5.05%.
With Indonesia still highly dependent on foreign investment, overbloated government may put some foreign companies from investing into the Southeast Asian country. At the same time, a wide power base might help Subianto to preserve stability, which has its own advantages when it comes to drawing in investment and ensuring economic development.
Edited by: Darko Janjevic