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Initial Reaction Positive to New Indonesian Cabinet - 2001-08-09

Indonesia's President Megawati Sukarnoputri has named her new cabinet, after a nearly three week delay. She says her government will focus on unifying the sprawling archipelago and rescue the economy. The markets are reacting well.

Indonesian President Megawati Sukarnoputri says the new cabinet's priority will be to maintain both territorial and social unity across the whole of Indonesia. The stability will then hopefully attract foreign investors and international creditors to help the country's ailing economy. President Megawati unveiled the 30 member cabinet Thursday steering away from controversy by choosing a lineup of technocrats. Amongst the familiar faces is Susilo Bambang Yudhoyono, who returns to the position of Indonesia's chief security minister.

New to the cabinet is economist Dorodjatun Kuntjoro-Jakti who takes up the post of Senior Economics Minister. He is the outgoing ambassador to the United States. Despite concerns about Ms. Megawati's close links to the Indonesian military she chose a civilian to be the country's defense minister -- Matori Abdul Djalil. He used to head of the political party of President Wahid. The cabinet was unveiled Thursday more than two weeks after Ms. Megawati was elected president by Indonesia's People's Consultative Assembly and her predecessor removed for alleged incompetence.

The delay fueled speculation that the cabinet lineup would be divided among Indonesia's at times fractious political parties leading to stalemates within the cabinet and stalled efforts at reform.

Those concerns sent jitters through financial markets. But Indonesia's national currency, the rupiah soared to a nine month high on Thursday in anticipation of a cabinet filled with professional economists and experienced leaders.

But not all the posts have been filled. President Megawati said she will announce her choice for the key position of Attorney General in the coming days.