Indonesia Launches Sovereign Wealth Fund to Oversee $900 Billion in National Assets
Indonesia has launched the Danantara, a new sovereign wealth fund with the goal of managing $900 billion in state-owned assets. Formally known as Daya Angata Nusantara, it’s the second sovereign wealth fund in the country after the Indonesian Investment Authority (INA), which was launched in 2021. The initiative aims to grow Indonesia’s economy with investments in sectors like renewable energy, technology, and AI.
How Does it Work?
Unveiled in February, Danantara functions as both an investment platform and a holding company. It has been structured to consolidate ownership of selected state enterprises while also attracting foreign capital.
President Prabowo termed it a strategic mechanism to transform the management of national wealth. The fund draws inspiration from Singapore’s Temasek Holdings, which has a value of more than USD 285 billion, with around 76% of its investment portfolio outside Singapore. In other words, Indonesia has also sought to be a global state-led investment leader with Danantara.
The appointment of Rosan Roeslani as Chief Executive marks the beginning of Danantara’s operational phase. At the time of its launch, the fund was provided with an initial injection of $20 billion, sourced in part from recent government budget cuts.
Projected Economic Impact and Sector Focus
Danantara is central to Prabowo’s vision of raising Indonesia’s annual economic growth rate from five to eight percent. To support this, the current administration has pledged to invest in no fewer than 20 significant projects within the year.
Industries identified for early investment include renewable energy, artificial intelligence, mining (nickel, copper, and bauxite), food security, petrochemicals, and oil refining. The sectors have been chosen based on Indonesia’s need to improve self-sufficiency and the prevention of future global shocks.
State-Owned Enterprises Under Danantara’s Umbrella
Although not all state firms have been confirmed for inclusion, several major enterprises are expected to be absorbed under Danantara. These likely include state banks such as Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia, alongside energy giant Pertamina, telecommunications leader Telkom Indonesia, and electricity provider PLN.
The fund has been seen as a fresh start to how Indonesia manages its public finances. The centralised oversight can improve efficiency and performance while also reducing red tape.
What’s Next: A Second Fund, A Big Chance
The first fund, INA, manages around USD 10.5 billion. On the other hand, Danantara is going to be much bigger, even one of the largest in the world, if everything goes to plan.
The government wants Danantara to both organise what it already owns and grow through smart investments. For it to succeed, though, it will need clear rules, smart planning, and strong leadership to handle the challenges of the global economy.
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