Indonesia's Prabowo asks Sri Mulyani to remain as finance minister

By Stefanno Sulaiman and Ananda Teresia

JAKARTA (Reuters) -Indonesia's incoming president, Prabowo Subianto, has asked current finance minister Sri Mulyani Indrawati to remain in her post under his presidency, with a focus on strengthening state finances, the minister said on Monday.

Sri Mulyani met Prabowo on Monday evening at the president-elect's private residence as he finalises his ministerial picks. Prabowo has held a series of meetings as he prepares his cabinet to take office on Oct. 20, including with several ministers of the administration of outgoing President Joko Widodo.

Speculation has been rife about who will be Prabowo's finance minister after the president-elect's comments earlier this year on plans to take on more debt set local bond and currency markets on edge.

"Our discussions have happened several times, not just tonight, and I think what (Prabowo) conveyed has remained consistent: guard state finances, particularly revenues and spending," Sri Mulyani told reporters after the meeting.

She did not respond when asked whether she would accept the job, but after the meetings, Prabowo told reporters that all candidates had agreed to become his ministers.

Three sources with knowledge of the situation had told Reuters earlier about Prabowo's plan to offer Sri Mulyani, a former World Bank managing director, a cabinet seat, with one of them citing her international reputation.

Sri Mulyani, one of Indonesia's longest-serving finance ministers who has worked under two presidents, has won plaudits for reforming the taxation system and for her role in steering Southeast Asia's largest economy through several crises, including the pandemic.

Prabowo's offer to Sri Mulyani was surprising, but a positive step due to her experience and that the financial markets know her well, said Myrdal Gunarto, an economist with Maybank Indonesia.

"She has a strong credibility and is also very disciplined with fiscal and state finance management," he said.

Jahen Rezki, an economist with the University of Indonesia, said: "I hope Sri Mulyani's presence could serve as a brake if the new government comes up with unfeasible or unrealistic policies."

Ratings agencies have previously flagged a potential increase in fiscal risk during Prabowo's presidency due to his costly campaign promises, which include a flagship $28 billion programme to give 83 million children and pregnant women free meals.

Several ministers from the outgoing administration, including interior minister Tito Karnavian, trade minister Zulkifli Hasan and energy minister Bahlil Lahadalia, met with Prabowo earlier on Monday and said they had been asked to join the next government, but did not elaborate on their positions.

Airlangga Hartarto, Widodo's chief economic minister, also held a meeting with Prabowo, during which Airlangga said they discussed geopolitical tensions and their impact on the economy. When asked what role he was offered in Prabowo's cabinet, he told reporters to wait for Prabowo's announcement.

(Reporting by Stefanno Sulaiman and Ananda Teresia; Writing by Gayatri Suroyo; Editing by John Mair, Bernadette Baum and Ros Russell)