Indonesia Sets Up Danantara: A New Era in State Investment Management

Indonesia's parliament is set to approve a bill establishing the Daya Anagata Nusantara Investment Management Agency, or Danantara. The agency aims to boost performance and returns from state investments, similar to Singapore's Temasek, with initial capital of 1,000 trillion rupiah. Concerns about political influence remain.

Indonesia is poised to establish a new investment agency, known as the Daya Anagata Nusantara Investment Management Agency, or Danantara, as parliament prepares to vote on the relevant bill. The initiative aims to emulate Singapore's successful state investment strategy by managing stakes in major state-owned companies to enhance investment returns.

Endorsed by the parliamentary commission overseeing state enterprises, the bill is likely to pass. With an initial capital funding of 1,000 trillion rupiah, the agency will take charge of stakes in key sectors, including banking, energy, and telecommunications. These assets reportedly amount to $600 billion in value.

Concerns have been raised about potential political interference, which could affect investor confidence. However, the initiative is seen as a potential game-changer for Indonesia's state investment landscape, promising improved funding access and operational efficiencies.

(With inputs from agencies.)