The decision, announced on September 8, 2025, comes after days of unrest triggered by public anger over lawmakers' perks and growing concerns about rising living costs. The demonstrations, which spread across major cities, turned deadly with casualties, including a 21-year-old food delivery driver.
Sri Mulyani, a respected technocrat and former World Bank managing director, was replaced by Purbaya Yudhi Sadewa, who previously led Indonesia's Deposit Insurance Corporation and held senior government positions.
Announcing his appointment, Purbaya sought to calm markets, stating, 'We are not going to overhaul the system. We are going to optimise what's existing.'
Analysts described Sri Mulyani's dismissal as a significant shift, given her reputation as a guardian of fiscal discipline. The reshuffle also removed ministers in charge of cooperatives, youth and sports, and migrant worker protection, alongside security chief Budi Gunawan.
The move rattled investors, with the Jakarta stock index falling by more than 1 percent and the rupiah weakening. Economists fear the changes may pave the way for more expansive government spending.
President Prabowo has pledged ambitious programs, including achieving 8 percent annual economic growth, rolling out a national school lunch scheme costing about 1.5 percent of GDP, and increasing defence expenditure.
The protests that prompted the reshuffle were sparked by lawmakers granting themselves a housing allowance nearly ten times Jakarta's minimum wage.
According to the Associated Press, demonstrators saw the decision as deeply insensitive in the midst of economic hardship. Violence during the protests left between eight and ten people dead, with rights groups warning of excessive use of force by security agencies.
Rania Umutoni
