President Prabowo Subianto has launched Danantara, Indonesia’s new sovereign wealth fund, with $20 billion in initial capital. Analysts express concerns about the fund’s governance structure potentially hindering investor trust. The fund aims to consolidate state-owned enterprises, with new leadership appointments and significant asset management goals. Legislative changes further define the fund’s operation but raise apprehensions regarding accountability and corruption.
On Monday, President Prabowo Subianto inaugurated Danantara, Indonesia’s latest sovereign wealth fund, launching it with an initial capital of $20 billion. However, analysts foresee significant hurdles in establishing investor trust due to concerns surrounding its governance framework. Danantara is designed to integrate all state-owned enterprises (SOEs) and aims to function similarly to Singapore’s investment firm, Temasek.
Rosan Roeslani, the Investment and Downstream Minister, has been appointed as the CEO of Danantara, marking a shift from a previous decision to name former OJK head Muliaman Hadad for the position last October. Alongside Rosan, Deputy SOEs Minister Doni Oskaria will serve as chief operating officer, while Pandu Sjahrir, an entrepreneur and nephew of former senior minister Luhut Pandjaitan, will take on the role of chief investment officer.
The fund aims to manage assets worth $900 billion and will report directly to the President. It will operate under a supervisory board chaired by SOEs Minister Erick Thohir, with Muliaman now appointed as his deputy. The establishment of Danantara follows the House of Representatives passing an amendment to the existing SOEs Law on February 4, allowing for significant changes in governance that have sparked concerns over potential corruption.
In conclusion, the establishment of Danantara as Indonesia’s sovereign wealth fund has set forth ambitious plans for state-owned enterprise management. However, the challenges regarding governance and the need for building investor trust remain significant concerns. The amendments to the SOEs Law also raise critical issues of accountability and potential risks associated with investment decisions. Moving forward, the effectiveness of Danantara will largely depend on its ability to navigate these challenges successfully while maintaining a transparent governance structure.
Original Source: www.thejakartapost.com
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