Indonesia’s President Prabowo Subianto has sacked Finance Minister Sri Mulyani Indrawati in a cabinet reshuffle brought on by deadly protests that have disrupted financial markets and the nation as a whole. The growing outrage from the public over economic inequality and the lavish perks granted to lawmakers, such as a substantial monthly housing allowance of 50 million rupiah (approximately $3,075).
Public outrage over lawmaker perks in Indonesia, protests ensue
This allowance amount is nearly ten times Jakarta’s minimum wage, sparking the protests that started in late August and left at least 10 people dead, according to the National Commission on Human Rights. This resulted in the immediate reshuffling of the cabinet.
A once respected technocrat and the former executive director of the International Monetary Fund, Mulyani Indrawati, served as finance minister for nearly a decade. Her dismissal followed looting at her home by protesters on August 31, 2025. The looting of Indrawati’s home was symbolic. It showed how far public trust in the government has eroded.
Her replacement will be economist Purbaya Yudhi Sadewa, who is currently the chairman of the Deposit Insurance Corporation. Sadewa spoke at a press conference and highlighted his previous experience and pledged to ‘speed economic growth’ by mapping out fiscal measures and ensuring that spending by the government is more efficient. Ordinary Indonesians feel that the housing allowance is a slap in the face, as they are struggling to pay rent while politicians live in luxury.
Deadly clashes and rising tensions
Revelations that all 580 members of the House of Representatives were receiving the housing allowances in addition to their salaries sparked the protests. The news was the final straw for a country dealing with rising unemployment, inflation, and low wages. 21-year-old food delivery driver Affan Kurniawan, who was reportedly run over by an armored police vehicle while working during the protests, died, further escalating the unrest.
President Prabowo, a former general with a controversial past, had initially responded with a firm stance by instructing security forces to crack down on protests. He described these protests as acts of terrorism. However, unrest still spread across Java, Sumatra, Sulawesi, and Kalimantan, prompting him to backtrack and start revoking lawmakers’ perks and suspending overseas trips in a bid to restore peace.
In a bid to calm tensions and build consensus in Jakarta, President Prabowo also met with 16 religious figures and eight other political leaders, including former President Megawati Sukarnoputri.
The market reaction and concerns put forward by investors
Four other ministers were also removed from the cabinet following Indrawati’s firing. This includes Budi Gunawan, the coordinating minister for politics and security, as well as the ministers of cooperatives, youth, and sport. The migrant workers ‘ protection ministers were also replaced following the unrest.
The markets responded nervously, as the Jakarta Composite Index fell 1.28% on Monday, and the rupiah fell to its lowest level since May 2.
Investors feel that Sadewa is capable, but lacks a track record in managing fiscal and state finances, and don’t necessarily think he’s the best choice. Indrawati’s credibility was, however, a key anchor for investor confidence.
Analysts are warning that the underlying issues of economic inequality, lack of transparency, and public distrust are still unresolved, but for now, peace has largely returned to the streets of Jakarta. This reshuffle is a political maneuver, but unless the government addresses the root causes of discontent, the unrest could resurface.
As Indonesia steps into a new era of governance, it will be interesting to see what will come from the new government officials and whether or not they will bring about meaningful change that was promised to citizens before but never delivered, or continue to enrich the lives of a few while the majority of citizens suffer economic hardships.