Megawati set to name new Cabinet

The army says it is up to Megawati to forge stability in the country

By staff and wires

JAKARTA, Indonesia -- Indonesia hopes to begin an era of recovery from early Thursday when President Megawati Sukarnoputri names her new Cabinet.

She will have on her mind the financial markets, investor confidence, the country's various independence-seeking troublespots and the need to bond a team from many political and cultural backgrounds.

But the names of two predecessors will continue to taunt her: Abdurrahman Wahid, whose democratic rocky rule led to crisis, an impeachment and an ousting, and Suharto, the last dictator, whose outlaw son "Tommy" is now being hunted over a judge's assassination.

After wrangling and delays that critics fear may mark Megawati's rule, several familiar figures and one low-profile bureaucrat have emerged as leading contenders for key posts.

Financial markets have been rattled by Megawati's delay, underscoring the intense political jockeying for seats in a team that will have its work cut out restoring confidence after years of crisis.

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Megawati, who was sworn in on July 23, will announce the cabinet at 11:00 a.m. (0400 GMT) on Thursday, senior aide Bambang Kesowo told a news conference on Wednesday.

According to political sources and local media speculation, the key surprise could be the naming of low-key bureaucrat Boediono as chief economics minister to oversee lagging efforts to revive the battered economy.

Boediono was head of the planning and development ministry under former President B.J. Habibie and until recently had only been considered an outside chance for a top post, Reuters reported.

"Boediono looks safe because he's non-partisan, a middle-way choice. Other candidates did not fit that," said one source from a grouping of Muslim parties vital to Megawati's survival.

Powerful post

The strongest contender for the powerful post of finance minister was Bambang Sudibyo, who Megawati's sacked predecessor, Wahid, dumped from the same position last year.

Many analysts rated Sudibyo's previous performance as lacklustre but his inclusion would reflect Megawati's debts to the diverse and thinly united coalition that thrust her to power.

Sudibyo is also a key figure in the National Mandate Party (PAN) of Amien Rais, Indonesia's political kingmaker who was instrumental in Megawati's rise to replace Wahid.

Sudibyo would control the country's bank restructuring agency and its multi-billion dollar cache of assets, seized from poorly run banks and companies during the Asian financial crisis but which has made it the constant focus of political meddling.

Until recently, many analysts had expected overall running of the economy to go to key Megawati party members and former ministers, Kwik Kian Gie and Laksamana Sukardi. Both men are still expected to be appointed to senior positions.

Ethnic violence

The widely respected former chief security and politics minister Susilo Bambang Yudhoyono is expected to return to his old job, which carries the heavy responsibility of dealing with separatism, ethnic violence and a series of unsolved bombings.

Sources said it was nearly certain the defence minister's job would be given back to a retired general after being in the hands of two civilians, a move that would spark concern among Western governments keen to see civilian control over the military.

Former Jakarta military commander Hendropriyono has been tipped as the most likely candidate.

Megawati on Wednesday ordered police to catch Hutomo Mandala Putra, or "Tommy" Suharto, who has been on the run since his sentence last November to 18 months in jail for graft.

Two suspects in last month's assassination of the judge, who had sentenced Tommy, were quoted by police as saying he had masterminded the killing. Police this week found a stash of weapons in two homes of friends of Tommy.