Post-Reshuffle, Indonesia Beset By Renewed Government Squabbles

JAKARTA (Reuters) - Less than a week after Joko Widodo called on ministers to set aside their egos, the Indonesian president's new cabinet is beset by renewed squabbles, threatening to undo attempts to revive an economy growing at the slowest pace for six years.

Rizal Ramli, the new coordinating minister for maritime affairs, drew a rare rebuke from Widodo after criticizing Vice President Jusuf Kalla and State-Owned Enterprises Minister Rini Soemarno.

The president told Ramli to voice his concerns privately at cabinet meetings, the president's spokesman, Teten Masduki, said on Wednesday.

"The government is trying hard to attract investment. It must be solid and united," Masduki said.

Widodo has vowed to lift growth to 7 percent, but critics say the economy has actually gone into reverse because of sniping ministers and bureaucrats.

In the second quarter, growth slipped to 4.67 percent, its slowest pace in six years, amid drooping domestic demand and sliding prices for coal and commodities. The rupiah has dropped 10 percent against the dollar this year to 17-year lows and is Southeast Asia's worst performing currency after Malaysia's ringgit.

Ramli, one of six new ministers brought into office in a cabinet reshuffle last week meant to assuage investors' concerns about policy muddles, challenged Kalla to debate the vice president's "unrealistic" plans to build 35,000 megawatts of power plants over five years.

"Actually the majority of this program are JK's projects," Ramli told Metro TV, referring to the vice president by his nickname. "It would be enough if just one-third succeed."

Kalla responded by saying Widodo himself inaugurated the power program, and that it is one of the government's signature policies. "That (comment) is playing down the president's authority," Kalla said.

A two-time minister under former President Abdurrahman Wahid, Ramli, who holds a doctorate from Boston University, is known for his strident and often nationalistic views on the economy.

Seen as close to Megawati Sukarnoputri, the head of Widodo's political party, Ramli oversees several ministries, including energy, transport and tourism.

"Ramli likes making a racket," vice presidential spokesman Husain Abdullah said. "Rather than helping the government, he makes things more complicated."

Ramli has also denounced plans by Indonesia's national airline, PT Garuda Indonesia Tbk, to buy 30 Airbus jets with $44.5 billion in loans. Soemarno, the state-owned enterprises minister, told him to back off.

Analysts predict more ructions ahead.

"The major deficiency of the cabinet reshuffle is the return of Ramli to national office," political consultant Kevin O'Rourke wrote in a note. "Ramli is likely to continue provoking discord between ministers."