By Kanupriya Kapoor and Gayatri Suroyo JAKARTA (Reuters) - Indonesian President Joko Widodo failed to finalize his cabinet on Wednesday after the country's anti-corruption agency rejected eight candidates, underlining the challenge he faces in fulfilling election promises of a government free from graft. The first Indonesian leader from outside the political or military elite has tried to steer clear of the traditional trading of cabinet posts for political support, aiming for a ministerial team dominated by professional technocrats. Sworn in on Monday amid hopes of a new direction in politics, Widodo, commonly known as Jokowi, took the unprecedented step of submitting his list of ministerial candidates to anti-corruption agencies for vetting before announcing the team. The move is likely to prove popular with the public in the world's third-largest democracy, but it also threatens to undermine a political coalition that already looks weak because it does not have a majority in parliament. A news conference at which the former Jakarta governor was expected to unveil his cabinet at the capital city's main port was canceled at the last minute late on Wednesday. Vice President Jusuf Kalla said later that he believed the cabinet would be named this week. "The KPK (Corruption Eradication Commission) notes and recommendations are being taken very seriously," Kalla told MetroTV in an interview. "Since the (election) campaign, Jokowi has promised that this cabinet has to be clean." Earlier in the day, Widodo had declined to identify which candidates the anti-graft agency had flagged as problematic. "Yesterday, we were told by (the anti-graft agency) ... there were eight names that weren't allowed," the 53-year-old told reporters at his first news conference as leader of Southeast Asia's largest economy. "Of course we have to change. If we don't, who will fill the posts?" TECHNOCRATS TO THE FORE Widodo had originally planned to announce his cabinet of 33 ministers on Tuesday. He has said his team would be made up of 18 technocrats and 15 political appointees. "Everyone wants us to work quickly but what happens if we are mistaken? We need to be quick, but also correct," Widodo said. All eyes are on Widodo's choices for the main economic ministries. They will inherit problems ranging from a widening current account deficit and cooling investment to the slowest growth since 2009. "The market hopes that ministries related to capital markets, like the finance ministry and state-owned enterprises ministry, will be run by technocrats," said Harry Su, head of research at Bahana Securities. In an early indication of his determination to make bold reforms, Widodo is expected to hike subsidized fuel prices by about a half by early November, a move that would save the government nearly $13 billion in 2015. That will test his popular support, which has been boosted by campaign promises to clean up politics in a country where people have been jaded by generations of graft. While the government does not need approval from a hostile parliament to raise fuel prices, further reforms will depend partly on how well Widodo handles the opposition led by Prabowo Subianto, whom he narrowly beat in a disputed election. One Widodo adviser, speaking on condition of anonymity, said that the decision to refer ministerial candidates to the KPK was a way of avoiding confrontation. "If it's hard to say no (to political parties), just give it to KPK," the adviser said. Widodo also faces pressure from his own coalition to stick to promises of cabinet jobs, despite the findings of the anti-graft agency. "At this time, officially our position is that we are still in Jokowi's coalition," said a senior official with the National Awakening Party, the second biggest party in his coalition. "We are having an internal discussion about whether or not we will put forward another (party) member for the cabinet in case the chairman of our party (Muhaimin Iskandar) does not get a cabinet seat." It was not clear whether Iskandar was one of the eight candidates rejected by the KPK. (Reporting by Dennys Kapa, Fergus Jensen, Fransiska Nangoy and Nilufar Rizki; Writing by Randy Fabi; Editing by Mike Collett-White and Robert Birsel)
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