JAKARTA (Reuters) - Thomas Lembong has mingled for years with bankers and private equity executives, but on Wednesday 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 utilizing the resources.”
Now in his early 40s, Lembong worked at Deutsche Bank and Morgan Stanley before co-founding Quvat Management private equity firm that specializes 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, told Reuters in an email.
“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 energize 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.
After Widodo pitched opportunities in Indonesia’s infrastructure sector to the group, Lembong told Reuters that the new president was “a huge magnet for investors” who “speaks the language of business”.
Even before his appointment to the cabinet, Lembong advised key government officials on infrastructure financing and accompanied state enterprises minister Rini Soemarno on a trip to Beijing earlier this year, people with knowledge of the matter said.
He also advised Widodo on the need to mobilize the “hundreds of trillions of rupiah in the non-bank sector”, especially pension and insurance funds, to meet his infrastructure ambitions, he told Reuters in an email in March.
Lembong’s experience with government institutions from his time at the Indonesian Bank Restructuring Agency - where he helped revive the banking sector after the 1998 Asian financial collapse - will serve him well in his new role, said Joel Hogarth, partner at law firm Ashurst LLP.
“He is a first-rate communicator and I believe his experience will make him an excellent intermediary between Indonesia and its international trade partners,” Hogarth said.
Reporting by Eveline Danubrata, with additional reporting by Bernadette Christina; Editing by John Chalmers and Ian Geoghegan