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Indonesia's new 'cowboy style' finance minister bets big on growth

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  Published in Business and Finance on Friday, September 12th 2025 at 4:34 GMT by The Straits Times
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Indonesia’s New Finance Minister: A Cowboy‑Style Vision for a Growth‑Driven Future

Indonesia’s latest appointment to the cabinet – the country’s Finance Minister – has generated a buzz that extends far beyond Jakarta’s political circles. Described in the Straits Times as a “cowboy” for his unorthodox, frontier‑style approach to fiscal policy, the new minister is already positioning himself as the architect of a bold, growth‑centric agenda that will reshape the nation’s economic landscape in the coming years.

A Re‑Entry of a Familiar Face

The “cowboy” in question is Sri Mulyani Indrawati, the seasoned economist who first served as Indonesia’s finance minister from 2014 to 2016 and was re‑appointed in 2020 after a brief hiatus. With a career spanning international institutions such as the World Bank, the International Monetary Fund, and the Asian Development Bank, Mulyani is no stranger to balancing fiscal prudence with growth‑stimulating initiatives. Her re‑appointment is seen as a signal that President Joko Widodo is leaning on an experienced hand to steer the country through a complex mix of domestic pressures and global uncertainties.

A “Cowboy” Approach to Fiscal Reform

The “cowboy” label comes from Mulyani’s willingness to take decisive, sometimes audacious actions—much like a cowboy riding into a storm to secure the herd. The new minister is betting that by boldly confronting fiscal deficits, stimulating investment, and embracing digital transformation, Indonesia can achieve a sustainable growth rate of 5–6 % by 2025, the target the Finance Ministry has set for the next five years.

Key to her strategy is the “fiscal frontier”—a set of reforms that aim to expand the tax base while tightening spending. She plans to broaden the indirect tax net (through value‑added tax and excise duties) and streamline direct taxation to enhance compliance. Simultaneously, she intends to keep public expenditure disciplined by prioritising high‑impact projects, particularly in infrastructure and digital services. Her goal is to bring the fiscal deficit under control, targeting a reduction from the current 5.5 % of GDP to 4 % or less by 2025.

Growth‑Focused Initiatives

Digital Economy and Fintech
Mulyani’s portfolio will heavily invest in Indonesia’s burgeoning digital economy. The new finance ministry is set to collaborate with the Ministry of Communication and Information Technology to accelerate the rollout of high‑speed broadband, particularly in rural areas. The minister also pledged to expand financial inclusion by supporting fintech firms that provide micro‑loans and digital payment solutions to the millions of Indonesians who still lack formal banking services.

Investment Incentives
Recognising that foreign direct investment (FDI) remains a key driver of growth, the finance ministry will streamline investment procedures and reduce bureaucratic red tape. A new “Investment Ease” dashboard will allow foreign investors to track their application status in real time, improving transparency and reducing delays. Mulyani also plans to introduce tax holidays for high‑tech and renewable energy projects, positioning Indonesia as a regional hub for clean technology.

Infrastructure Modernisation
Indonesia’s ageing infrastructure is a perennial bottleneck. The new minister has earmarked substantial funding for transportation (roads, rail, ports) and logistics, with an emphasis on smart‑city solutions that harness IoT and data analytics. The ministry will also promote public‑private partnerships (PPPs) to share risks and attract private capital for large‑scale projects.

Addressing the Challenges

Despite her ambitious agenda, Mulyani faces a litany of challenges. Inflation remains stubbornly high, partly due to global commodity price shocks and supply chain disruptions. The fiscal deficit, while moderate by regional standards, still lags behind the world’s leading economies. And, of course, Indonesia’s vast geography makes policy implementation uneven, with the island’s rural hinterlands often lagging behind the more prosperous Java and Bali.

To counter these obstacles, the finance ministry has set up a “Growth Monitoring Task Force,” comprising economists, data scientists, and regional representatives. The task force will use real‑time data analytics to fine‑tune policies and ensure that growth remains inclusive.

Links to Additional Context

The Straits Times article builds on a series of reports that outline Indonesia’s fiscal trajectory. For instance, a recent World Bank report (link in the original article) highlighted the country’s “mixed fiscal outlook” and urged the government to maintain a balanced budget. Meanwhile, an IMF working paper (also linked) underscored the importance of structural reforms to sustain long‑term growth.

The article also references the Indonesian Ministry of Finance’s 2025 budget proposal, which includes a 2.5 % increase in fiscal stimulus for the first two years to cushion the impact of the pandemic on small businesses and low‑income households.

What Comes Next?

Mulyani’s “cowboy” approach to growth will be tested over the next few years as Indonesia navigates the twin imperatives of fiscal responsibility and inclusive development. Her plans for tax reform, digital expansion, and infrastructure investment will be watched closely by investors, policymakers, and ordinary Indonesians alike.

The finance ministry’s commitment to transparency—through the new investment dashboard and the Growth Monitoring Task Force—will be crucial in earning public trust. If Mulyani can deliver on her promises, Indonesia could emerge from its current malaise as a more resilient, technology‑driven economy ready to compete on the global stage.

In a world where many countries are tightening budgets and stalling investment, Indonesia’s new finance minister’s “cowboy” strategy is a daring bet on growth. Whether this gamble pays off will hinge on her ability to balance risk with prudence, but the stakes—and the potential rewards—are undeniably high.