Economists Urge Focus on Jobs and Poverty After Cabinet Shake-Up
Jakarta. The Indonesian Economists Alliance urged the government to sharpen its focus on poverty reduction and job creation to ensure growth translates into real benefits for the people.
The call followed President Prabowo Subianto’s recent cabinet reshuffle, which saw Finance Minister Sri Mulyani Indrawati replaced by economist Purbaya Yudhi Sadewa.
International Economic Association (IEA) Secretary-General, Lili Yan Ing, underscored that Indonesia’s economic expansion must be meaningful. “Growth should not just be about numbers, but also reducing poverty, enhancing human capital, and creating jobs,” she said in Jakarta.
Data from Statistics Indonesia (BPS) showed that the economy grew 5.12 percent in the second quarter. The open unemployment rate stood at 4.76 percent, while the national poverty rate was 8.47 percent, down slightly from 8.57 percent in September 2024.
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Lili highlighted three pressing concerns: slowing and less inclusive growth, rising inequality across regions and income groups, and shrinking opportunities for quality employment, particularly for the younger generation.
The alliance also called for stronger independence and transparency of key state institutions, including Bank Indonesia, Central Bureau of Statistics, the House of Representatives, the Supreme Court, the Constitutional Court, the Corruption Eradication Commission, the Audit Board, and the Attorney General’s Office.
“Bank Indonesia must remain true to its mandate as an independent central bank, not a financier of political projects,” Lili said.
She pointed out that the ongoing burden-sharing scheme, which channels central bank resources to fund populist programs, amounts to debt monetization and fiscal dominance. Such policies, she cautioned, could erode investor trust, spur inflation, and weaken Bank Indonesia’s role in protecting monetary stability. “We demand independence for these institutions,” she concluded.
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