JAKARTA: Thomas Lembong (pictured) has mingled for years with bankers and private equity executives, but yesterday swapped that to take up the post of Indonesia’s trade minister, an appointment designed to shore up investor faith in Southeast Asia’s largest economy.
Eloquent, urbane and with a degree from Harvard, Lembong breaks the mould of staid and often feckless politicians that Indonesians have come to expect from their government ministers.
But then he was appointed by Joko Widodo, a former furniture businessman who last October became the country’s first president from outside the political or military establishment.
Widodo plucked Lembong from the executive suite of his Singapore-based private equity company as part of a wider cabinet reshuffle, which followed weeks of criticism that his original economic team had failed to halt a slide in growth to its slowest pace in six years. “We face a heavy economic challenge,” Lembong said in a speech after the new ministers were sworn in. “The president, vice president and ministers strongly believe that Indonesians have the strength to overcome this. It’s a question of utilising the resources.”
Now in his early 40s, Lembong worked at Deutsche Bank and Morgan Stanley before co-founding Quvat Management private equity firm that specialises in growth capital and buyouts, in particular in Indonesia, Malaysia and Singapore. “Tom’s appointment is excellent,” John Riady, a director at Indonesian retail-to-property conglomerate Lippo Group, said. “I believe the market will respond very positively to a trade minister who brings together a deep understanding of how global markets work, how business functions and has a heart for the Indonesian people.”
Lembong becomes trade czar at a time when Indonesian shoe, garment and other businesses have been struggling to compete with Chinese goods, which could become even cheaper after the world’s second-biggest economy devalued its currency this week.
Indonesia’s relations with a key trade partner, Australia, have also been tested after it slashed the number of cattle import permits last month. Australia supplied around 40 percent of the beef consumed in Indonesia last year.
“The introduction of market-friendly Lembong in the trade ministry is positive given the outgoing trade minister adopted nationalist policies that failed to energise the country’s exports,” said Achmad Sukarsono, an analyst at Eurasia Group.
Lembong was the Indonesia representative in a group of global institutional investors overseeing trillions of dollars who visited Jakarta after Widodo took office last year. Lembong said that the new president was “a huge magnet for investors” who “speaks the language of business”.
Reuters
