Indonesia found itself at a crossroads this week as President Prabowo Subianto conducted a sweeping Cabinet reshuffle in the wake of deadly protests that rocked the archipelago nation. The shakeup, which took place on Monday, September 8, 2025, removed five key ministers—including the highly respected Finance Minister Sri Mulyani Indrawati and Coordinating Minister for Politics and Security Budi Gunawan—after public outrage boiled over regarding lawmakers' perks and the spiraling cost of living.
The unrest, which left the world’s fourth-most-populous country reeling, was sparked by revelations that all 580 members of Indonesia’s House of Representatives had been receiving a monthly housing allowance of 50 million rupiah (about $3,075). This sum, introduced last year, is nearly 10 times the minimum wage in Jakarta—a staggering disparity that ignited fury among ordinary Indonesians grappling with economic hardship.
According to the Associated Press, the protests quickly escalated, gripping a nation of more than 280 million people. Demonstrators took to the streets in cities across the country, venting their frustration at what they saw as government indifference to their struggles. The independent National Commission on Human Rights reported that 10 people died during the five days of unrest, citing an inhumane approach by security forces in dealing with demonstrators. Police, meanwhile, put the death toll at seven. The violence intensified following the tragic death of 21-year-old ride-hailing driver Affan Kurniawan, who was reportedly completing a food delivery order when an armored police car sped through a crowd and caused him to fall.
The protests were not just about numbers on a paycheck. For many, they represented the culmination of years of simmering discontent over economic problems that the government had failed to address seriously. Widespread layoffs and declining purchasing power had left many Indonesians feeling left behind, and the sense of injustice was only heightened by the news of lavish perks for lawmakers. As BBC reported, the anger was palpable and, at times, explosive.
Finance Minister Indrawati, a technocrat with an impressive global pedigree—she previously served as executive director of the International Monetary Fund and managing director of the World Bank—became a lightning rod for the protests. On August 31, her house was looted, along with the homes of several lawmakers, as demonstrators vented their rage not only at the political class but also at those seen as complicit in their economic pain.
Facing mounting pressure and a country on edge, President Subianto acted decisively. Last week, before the Cabinet reshuffle, he revoked lawmakers’ perks and privileges, including the contentious housing allowance, and suspended overseas trips for parliamentarians. These measures helped restore a degree of calm, but it was clear that deeper changes were needed to address the underlying causes of public dissatisfaction.
In addition to Indrawati and Gunawan, Subianto removed the ministers of cooperatives, youth and sport, and migrant workers protection. The shakeup was intended not only to signal a break from the status quo but also to reassure a jittery public and international investors that the government was serious about reform.
The financial markets, however, responded nervously. On the day of the reshuffle, the Jakarta stock index fell 1.28% to close at 7,766.85, shedding 100.5 points. The rupiah also slid to 16,583 per dollar, its weakest level since May, as reported by the Associated Press. The market reaction reflected concerns about the future direction of Indonesia’s economic policy, particularly in the absence of Indrawati, whose strong credibility had long been recognized both at home and abroad.
“Indonesia remains attractive to investment, partly because Indrawati’s strong credibility has been recognized both domestically and internationally for successfully maintaining a stable, prudent and sustainable fiscal policy,” said Fadhil Hasan, a senior economist at the Institute for Development of Economics and Finance. Yet, as Hasan pointed out, Indrawati had in recent years acquiesced to several presidents’ ambitious spending programs, which increased government debt and, in his view, diminished the credibility of her own fiscal policy. “So, I don’t think [Sadewa] is the best choice,” Hasan remarked, casting a skeptical eye on Indrawati’s successor.
That successor is Purbaya Yudhi Sadewa, 61, formerly the chairman of the Deposit Insurance Corporation. While Sadewa is an accomplished economist who has provided fiscal expertise to the last two administrations and held senior government roles—including deputy for maritime sovereignty coordination at the Coordinating Minister for Maritime Affairs and Investment—he lacks a proven track record in managing fiscal and state finances at the highest level.
At a press conference late Monday, Sadewa sought to reassure both markets and the public. “I am a market person,” he said, emphasizing his intention to keep Indonesia fiscally healthy. He also pledged to consult with Indrawati to provide fiscal advice to the government, signaling continuity amid change. Sadewa was candid about the challenges ahead, stating, “If I said the economy can grow 8%, I’d be lying. But we are moving in that direction as fast as possible.” His focus, he explained, will be on mapping out fiscal measures to speed economic growth and ensuring that government spending is efficient—without overhauling existing systems.
The stakes are high. During his campaign, President Subianto promised to take economic growth to 8% within five years—a bold target, given official data showing Indonesia’s economy expanded by 4.87% in the first quarter of 2025 and 5.12% in the second quarter. Achieving such rapid growth would require not only deft fiscal management but also a restoration of public trust in government institutions.
For now, the Cabinet shakeup appears to have calmed the immediate crisis. Yet the underlying issues that fueled the protests—economic inequality, political privilege, and a sense of disconnect between leaders and the people—remain unresolved. Indonesians will be watching closely to see whether the new team assembled by President Subianto can deliver on promises of reform and steer the country toward a more equitable and prosperous future.
In the aftermath of a turbulent week, Indonesia stands at a pivotal moment, balancing the demands of its people, the expectations of the global marketplace, and the aspirations of a new generation. Whether the changes at the top will translate into meaningful progress on the ground is a question that only time—and the actions of the new Cabinet—will answer.