JAKARTA: A new investment body established by Indonesia’s freshly inaugurated president will rival those of developed nations and help attract foreign investment, according to newly-appointed officials.
Mr Prabowo Subainto is set to launch the Daya Anagata Nusantara Investment Management Body (Danantara) on Nov 8. It is said to be akin to notable investment bodies such as Singapore-based Temasek Holdings.
“At the end of it, it will be something similar (to Temasek Holdings),” the newly appointed head of the investment body, Mr Muliaman Darmansyah Hadad said to reporters on Monday (Oct 28), as quoted by local media platform Detik.
In preparation for the launch, Mr Prabowo invited Mr Muliaman, who is also the former head of Indonesia’s financial services authority (OJK), to a meeting at the presidential palace in Jakarta on Monday.
“I have been tasked to ensure that all preparations are well underway for the official launch by the president himself on Nov 8,” Mr Muliaman said after the meeting, confirming that Mr Prabowo will be directly leading the inauguration ceremony of the investment management body.
“All government assets that have been separated will be managed by the agency but it will be done gradually, with the investment body to be established first, followed by the creation of the law,” Mr Muliaman said.
He mentioned that the creation of the agency would require changes to the Law on State-Owned Enterprises (BUMN), according to the Jakarta Globe.
The investment body, which operates and functions differently from the Ministry of State-Owned Enterprises will focus solely on investment management and is said to reflect Mr Prabowo’s commitment to creating a more integrated and directed management of national investments, said Mr Muliaman, as quoted in local media.
Meanwhile, the Ministry of State-Owned Enterprises is tasked with developing government policies and overseeing profit-driven commercial entities.
As reported in The Jakarta Post, Danantara will be more similar to the Indonesia Investment Authority (INA) but with a larger fund.
INA is Indonesia’s existing sovereign wealth fund, established in 2020.
“Danantara is tasked to manage investments outside APBN (the state budget), so all the government’s assets that are separated will be managed by the investment body, but it will be done in stages,” Mr Muliaman said.
He added that Danantara could potentially merge with INA in the long run.
“Ideally, a merger between Danantara and INA should happen,” he said, as quoted in the Jakarta Globe.
“Initially we will consolidate assets and draft the relevant legislation. Then, we will work with other ministries to shape the agency’s structure and the goal is to streamline and enhance the management of dispersed government investments,” Mr Muliaman explained, as quoted by local media platform Tempo.
Separately, at an event at Gadjah Mada University in Yogyakarta on Monday, Indonesia’s Deputy Finance Minister Anggito Abimanyu expressed confidence that the assets under Danantara’s management could potentially rival those of developed nations, as reported by local media.
These include the national investment funds as well as state-owned enterprises (BUMN) funds.
As of 2021, there are over 100 state-owned enterprises overseen by the ministry, holding US$600 billion in assets, according to the Asian Development Bank.