Indonesia Ousts Finance, Security Chiefs Amid Protests

Indonesia’s President Prabowo Subianto has dismissed key Cabinet ministers, including the finance and security chiefs, following a wave of violent protests that left at least 10 people dead and exposed deep public anger over economic hardship and political privilege.

The reshuffle saw the removal of Finance Minister Sri Mulyani Indrawati, a respected technocrat with an international track record at the IMF and World Bank, alongside Coordinating Minister for Politics and Security Budi Gunawan.

Three other ministers, covering cooperatives, youth and sport, and migrant workers, were also dismissed.

Indrawati will be replaced by economist Purbaya Yudhi Sadewa, head of Indonesia’s Deposit Insurance Corporation. While Sadewa pledged to maintain fiscal stability and accelerate growth, analysts questioned his lack of direct experience in managing state finances.

The protests, which swept across the nation of 280 million, erupted over revelations that all 580 lawmakers were receiving monthly housing allowances worth 50 million rupiah (\$3,075) — nearly ten times Jakarta’s minimum wage. Rising living costs, mass layoffs, and declining purchasing power intensified the unrest.

The National Commission on Human Rights confirmed at least 10 fatalities, blaming excessive force by security services, while police reported seven deaths. Violence escalated after 21-year-old ride-hailing driver Affan Kurniawan was killed when a police armored vehicle drove into a crowd of demonstrators.

Indrawati, once praised for prudent fiscal management, became a lightning rod for anger over rising costs and political perks. Her home, along with those of several lawmakers, was looted on 31 August.

Markets reacted sharply to her dismissal. The Jakarta Composite Index closed 1.28% lower, while the rupiah weakened to its lowest level since May.

Economists warned that removing Indrawati could undermine investor confidence, despite Indonesia’s status as Southeast Asia’s largest economy.

Subianto has attempted to defuse tensions by revoking lawmakers’ allowances and suspending overseas trips. Still, analysts argue the crisis reflects deeper discontent with the government’s handling of economic challenges.

Sadewa, 61, vowed to stabilise the economy, emphasizing efficiency in government spending and pragmatic fiscal measures. He tempered Subianto’s ambitious campaign pledge of 8% growth within five years, calling it unrealistic but achievable in gradual steps.