Changing the President's Cashier

September 21, 2026 | 10:20 am

Replacing the Finance Minister does not guarantee more technocratic fiscal management. The root of the problem lies with Prabowo.

THE dismissal of Purbaya Yudhi Sadewa as Finance Minister does not entirely reflect the saying that once something has served its purpose, it is discarded. Receiving a phone call about his replacement while attending a meeting with the Regional Representative Council (DPD), he was indeed being humiliated. But the abrupt replacement also exposed the Finance Minister’s weak bargaining position. Even after accommodating the President’s various demands, including by ignoring a number of monetary principles, he could still be easily kicked out.

Before his dismissal, Purbaya had just carried out a major reshuffle of his subordinates, particularly at the Directorate-General of Taxes and the Directorate-General of Customs, two institutions headed by people close to President Prabowo Subianto. Objecting to the reshuffle, one official went to the Presidential Palace. The reshuffle was put on hold, and Purbaya was instead the one who left Lapangan Banteng—the Finance Ministry’s headquarters.

The intrigue was merely the tip of the iceberg. Purbaya had long been at odds with several subordinates, including his deputy, Suahasil Nazara, who later replaced him. Purbaya’s position had previously been relatively secure because he did not cross people close to Prabowo and always followed the President’s wishes.

Purbaya managed the State Budget to support Prabowo’s favored programs, which consume huge amounts of funds, such as free nutritious meal and the red-and-white cooperatives. To make up for sluggish revenue and heavy spending, Purbaya held back revenue sharing funds for regional governments and tax refunds. He also pressed the Danantara Investment Management Agency to transfer dividends to the state treasury.

Many have complained about the way Purbaya managed the budget. But those complaints should be directed at both Purbaya and Prabowo. Purbaya carried out Prabowo’s ambitions without reserve, even at the expense of fiscal discipline. In other words, whoever becomes Finance Minister will repeat what Purbaya did if he wants to remain in the position.

Therefore, Purbaya’s replacement is not an indication that Prabowo wants to return to more technocratic fiscal policies. The replacement is merely an outcome of a power struggle.

Minister Suahasil will face a similar challenge. His knowledge and experience in monetary affairs will clash with Prabowo’s ambitions, which in many respects run counter to economic principles. He will have to navigate between two reefs: maintaining fiscal policies that serve the public interest while preserving his loyalty to the President.

Suahasil’s statement that the State Budget must support the government’s priority programs may indeed be unsettling. His statement that he will manage the State Budget credibly must be proven not merely by keeping the deficit below 3 percent, but also by spending state money proportionally and rationally.

Confidence in State Budget management can also be restored if the central government stops shifting the fiscal burden to regional governments to finance Prabowo’s projects, causing fiscal crises in the regions and stalling development and public services. So far, state financial management has also lacked credibility because the government has concealed state financial risks through institutions such as Danantara.

Credibility will be difficult to achieve if Prabowo does not change—a hope akin to trying to measure smoke. Suahasil’s room for maneuver will remain constrained by the President and will hit a wall when confronted with the interests of the Palace.

As Finance Minister, Suahasil must have the courage to rein in the President’s unreasonable ambitions. He may experience what Sri Mulyani Indrawati, the Finance Minister before Purbaya, went through. During Sri Mulyani’s tenure, spending cuts at ministries and regional governments were once carried out by people close to Prabowo without involving the Finance Minister.

As long as Prabowo continues to push projects that are not urgent but consume huge amounts of the budget, whoever serves as Finance Minister will face the same problem. The Finance Minister will ultimately become nothing more than a cashier: finding revenue and paying the bills for the President’s unreasonable projects.

Read the Complete Story in Tempo English Magazine

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