Indonesia has officially launched its long-awaited sovereign wealth fund, Daya Anagata Nusantara (Danantara), marking a significant step in the country's economic strategy. The establishment of this superholding entity follows the recent approval of amendments to the State-Owned Enterprises (SOEs) Law by the House of Representatives (DPR) on Tuesday. Danantara will manage a substantial portfolio of state assets, estimated at $600 billion, with the aim of optimizing their performance and driving national economic growth.
The move to consolidate state assets under Danantara is a key initiative of President Prabowo Subianto’s administration, reflecting a broader push to streamline and professionalize the management of SOEs. The government aims to leverage these assets to achieve its ambitious economic growth target of 8 percent.
"Danantara has been officially established to consolidate the management of state-owned enterprises, optimize dividends, and drive strategic investments," stated State-Owned Enterprises Minister Erick Thohir during the DPR plenary session. "This is a transformative step in building a strong and sustainable economic foundation for future generations."
Minister Thohir emphasized that Danantara's creation aligns with Indonesia's long-term economic vision, particularly the "Golden Indonesia 2045" aspiration. He stressed the importance of collaboration between the government, SOEs, and stakeholders to create globally competitive and professionally managed state enterprises that contribute significantly to national development. The revised SOE Law provides the legal framework for restructuring, reorganizing, and streamlining state enterprises to enhance efficiency and value creation. Danantara will prioritize innovation, technology adoption, and the development of a skilled workforce to achieve these goals.
The structure and leadership of Danantara are still being finalized. House Deputy Speaker Sufmi Dasco Ahmad confirmed that the organizational structure, including the supervisory board, will be determined by President Prabowo. While no official appointments have been announced, speculation suggests that Minister Thohir himself may be considered for a leadership role within Danantara's supervisory board. It has been confirmed that former Financial Services Authority (OJK) Chairman Muliaman Hadad will lead the agency. Hadad’s experience leading the OJK, a crucial regulatory body in Indonesia’s financial sector, positions him well to navigate the complexities of managing such a large portfolio of assets.
Dasco urged the public and investors to await the formal enactment of the law and the issuance of related government decrees that will detail Danantara's operational framework. He emphasized the importance of clarity and transparency to avoid confusion and build investor confidence. This clarity will be crucial for attracting foreign investment, which will be essential for Danantara to achieve its ambitious goals. The government's commitment to transparency and good governance will be closely watched by international investors.
Danantara's Initial Portfolio and Future Plans
Danantara will initially oversee seven major state-owned enterprises, including PT Bank Mandiri (Persero) Tbk, PT Bank Rakyat Indonesia (Persero) Tbk, PT PLN (Persero), PT Pertamina (Persero), PT Bank Negara Indonesia (Persero) Tbk, PT Telkom Indonesia(Persero) Tbk, and PT Mineral Industri Indonesia (Persero) or MIND ID. These companies represent a combined asset value of nearly Rp9,000 trillion. In addition to these holdings, Danantara will also manage the Indonesia Investment Authority (INA), which has assets of Rp163 trillion. This brings Danantara's initial total assets under management to approximately Rp9,049 trillion, or roughly US$571.6 billion.
Looking ahead, Danantara is projected to manage assets worth US$982 billion, or Rp15,547 trillion, within the next few years. This growth will be achieved by gradually incorporating other state-owned enterprises into its portfolio.
Comparison with Global Sovereign Wealth Funds
Danantara's model is similar to that of Temasek Holdings, Singapore's sovereign wealth fund. Like Temasek, Danantara will operate under commercial principles, managing investments with the goal of generating long-term returns. This approach contrasts with some other sovereign wealth funds that focus primarily on stabilizing government revenues or managing natural resource wealth.
While Danantara's initial asset base is substantial, it is still smaller than some of the world's largest sovereign wealth funds. For example, Norway's Government Pension Fund Global manages over US$1.8 trillion in assets, while China Investment Corporation manages over US$1.33 trillion. However, Danantara's projected growth trajectory suggests that it could become a major player in the global sovereign wealth fund landscape in the coming years.
The establishment of Danantara is a significant development in Indonesia's economic landscape. The success of this initiative will depend on effective implementation, strong leadership, and a commitment to transparency and accountability. The consolidation of state assets under a single entity has the potential to unlock significant value and contribute to Indonesia's economic growth and development. However, the challenges of managing such a vast and diverse portfolio of assets should not be underestimated. Analysts will be closely monitoring Danantara's performance in the coming years to assess its impact on the Indonesian economy.
