Indonesia is betting that the new sovereign wealth fund will finally open its potential

One of his ideas to get there is the latest sovereign wealth box in the country, Danantara, an abbreviation for Daya Anagata Nusantara, which means “the strength of the future for Indonesia”. It is charged with increasing the economy, especially through local investments.

The Fund also takes on dozens of state -owned institutions in Indonesia (SOES), unifying its operations and simplifying them to make it more competitive. The idea is that integrated management can lead to more effective and improved national resources, which leads to better economic growth and better jobs.

However, critics have concerns about governance due to a revised law that gives the president greater control over entities and billions of dollars in annual profits. These concerns contributed to the decrease in the stock market index in Indonesia when the fund was launched in late February. Danantara, which provides reports to the president, will eventually be honored to all state -owned companies (including Global 500 Pertamina, The Oil and Gas Giant and Perushaan Listrik Negara).

The idea of sovereign wealth funds – the investment funds managed by state representatives in the hope of benefiting from its financial surplus – since Kuwait in 1953 was placed to manage oil revenues. This surplus can come from natural resource sales in oil -rich countries such as Saudi Arabia or Norway, foreign currencies as in China, or even abundant tax revenues in the Ireland case. Sometimes, money plays an active role, support emerging startups, play a role for strategic sectors, or invest in companies stationed in their country.

But Danantara varies to some extent that it tries to manage and invest its governmental institutions while investing the surplus of funds derived from Soes’s profits. This will eventually help the largest economy in Southeast Asia to develop its capabilities, “says Roussan Rozlani, CEO of Young Entity.

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“We have this double role: How can we improve the assets of state -owned institutions to create more value, and at the same time creating high -quality jobs?” Rosan tells Fortune. As a sovereign box, there must be returns, as it is noted, but the priority is “sustainable economic growth”.

The largest economy in Southeast Asia

Indonesia represents approximately 40 % of the population of the region and the land mass. About 280 million people scattered more than 17,000 islands, and the country was the total domestic product of $ 1.4 trillion in 2024, according to the data of the World Bank. This puts Indonesia in the 20 best economies in the world.

While Indonesia was upset during the Asian financial crisis in the period 1997-1998, it was one of the most powerful performance artists in the region during the 2008-2009 global financial crisis, which grows by 4.6 % in 2009. From 2010 to 2024, its economy grew by 4.74 % on average annually.

But the country tracks some of its neighbors GNI per person, which amounted to $ 4,910 in 2024. This is sufficient to classify it as a significantly significant country, according to the World Bank definition. However, GNI per capita in Singapore, Malaysia and Thailand reached $ 74,750, $ 11670 and $ 7,120, respectively.

This does not mean that all the people of Indonesia win their regional peers – though
To enjoy abundant natural resources, such as oil, gas and critical minerals.

But Rosan believes that Danitara can successfully help Indonesia benefit from its resources. “We want to develop a value -added industry, doing this will improve human capital, create more quality jobs, and it is clear that it creates a better economic return,” he says.

Indonesia has already attracted investments to the nickel industry as part of its late strategy after the export of raw nickel raw crude in January 2020 – before Danantara.

New stage

Danantara must also simplify dozens of state -owned companies in the country (an effort that started during the era of former President Joko Widodo) and made it more competitive. “In the past, sometimes I think (SOES) is likely to be monopolized. When you don’t have a competition, sometimes you become more relaxed,” Rosan says.

Hilman Palaon, a research fellow at the Indian Development Center and the Pacific of the Institute of Louis, believes that Danantara represents a new stage. “He is expected to play a major role in reshaping the state -owned scene: the management of state investments, unification of assets, and the leadership of restructuring efforts,” he says.

This includes reducing unnecessary red and bureaucratic tape, as well as repairing the reputation of Indonesia due to cheating, and sometimes corruption.

“Perhaps in the past, Soe has always had a special treatment,” explains Rosan. “Usually if there is a government project, there is always a priority that it should be granted in favor of another Soe. This type of priority we will review.”

Maxwell Abbott, the Assistant Manager and Head of Political Risk and Strategic Intelligence of APAC in Nardello & Co.

The country has already taken a step in the right direction, says: “In recent years, Indonesia has made great progress in improving the performance and efficiency of state -owned companies by uniting the number of state -owned companies and improving the anti -bribery protocols.”

Rosan argues that not all state -owned companies are burdened with this issue, but the state -owned companies in general must be more efficient, transparent and digital.

Artificial intelligence and digitization are one of the eight sectors targeted by Danantara Investment, to develop the Indonesian economy while raising the standard of living. Other sectors include renewable energy, food security and health care.

“We are still behind us in terms of health care industry. We are still importing 90 % of our raw materials for medicines,” says Rosan. “We are late in terms of doctors … only to meet the emerging market standard, not the Organization for Economic Cooperation and Development, we are short of about 100,000 doctors.”

Danantara has already signed many memorandum of understanding or granting loans to Indonesian companies in the strategic sectors. It has a memorandum of understanding with ACWA Power, a Saudi company that specializes in water desalination and green hydrogen technology, to explore renewable energy investments. Total financing is estimated at $ 10 billion.

It also has partnerships with QIA, the sovereign wealth fund in Qatar, CIC, and the sovereign wealth fund in China, aimed at facilitating investments to Indonesia. At the local level, Danantara in Chandra ASRI, a petrochemical and energy company, has invested a loan of $ 405 million to the National Airlines Garuda Indonesia.

“Danitara’s decisions are early in investment, that Prabu wants to ensure the local production of decisive industrial inputs and the provision of a lifeblood for the troubled academic cobal that plays a prominent role in the national economy,” Abbot notes.

The old play

With more than 900 billion dollars of assets and annual profit distributions of about $ 8 billion that can be used for investment, through Rosan’s estimate, Danantara is not just a new force in global financing; It is an indication that Indonesia will fully control its wealth, manage its resources with a strategic insight, and invest in its future.

“Danantara holds great ambitions,” says Balayon, Institute’s research colleague, Louis. “It reflects the bold vision of Indonesia for liberation from the intermediate income trap and becomes an advanced nation, but the real challenge lies in converting these aspirations into work.”

While Rosan was the main pillar of Indonesian policy with various ministerial tasks, an ambassador to the United States, and the role of the Brabu campaign director and the strategists, he is also a financial man. Before politics, he was working in banking services and his happiest investment company, Recapital Group.

“I came from the private sector and I was already on the investment side. So this (similar) to my previous work, and investing in Indonesia or outside Indonesia,” he says.

Under his leadership, many of their prominent peers who also descend from the financing or private sector, including Pando Sijilir, chief investment official in Danitara and an early supporter of the Southeast Asian Sea Technology.

Danantara has also drafted a non -Indonesian to sit in the House of Advisors, where he served on a voluntary and non -binding basis: the director of the famous hedge fund Ray Dalio, prominent American economist Jeffrey Sax, and former Thai Prime Minister Thaxin Shinwatra.

The Americans are not strangers in the country: Dalio Oceanx works with Indonesian officials to draw the map of the sea floor, and SACHS previously advised the Indonesian government.

Although the role of Thaxin may raise some eyebrows due to the allegations of corruption, Rosan says that Thaksin is respected in Southeast Asia and that his input will be useful.

If Danetara succeeds in transforming the Indonesian economy and raising living standards, this will strengthen the legacy of Prabu, who is still blowing somewhat in his time as the army commander during the dictatorship during the Soharto era from the mid -1960s to the 1990s.

While more investments in the country along with more state -owned companies will create more jobs, Rosan is aware of doubts and expectations for the performance fund.

“It is clear that when a new entity receives more than 900 billion dollars of total assets, the expectation is very high,” adding that the box will not “perform” only in terms of returns but will raise the criteria for governance and compliance. “We are now building confidence by getting the best talent, as well as obtaining good judgment and transparency.”

It is a strong claim. But when asked if he was confident that the conversation about Danantara would be positive if he spoke to Fortune again in five years, Rosan responds to yes. As he put it, we will see a “big difference”.

This article appears in the August issue of luck With the title, “DANANTARA CEO believes that the new sovereign wealth fund can finally help Indonesia open its potential”