Indonesia's New Investment Arm: Danantara Aims to Boost State-Owned Success

Indonesia has launched Danantara, a state investment agency modeled after Singapore's Temasek, to manage major government holdings. With initial capital of $61 billion, it aims to streamline state companies and enhance returns, amid concerns about potential political influence.

The Indonesian government has unveiled the Daya Anagata Nusantara Investment Management Agency, commonly known as Danantara, after receiving parliamentary approval. This new agency is set to manage substantial government holdings in prominent state-owned enterprises.

Danantara's inception was announced following President Prabowo Subianto's office in October. With a planned initial capital of approximately $61 billion, the agency will consolidate state assets to optimize performance and improve investment returns, mirroring Singapore's successful model, Temasek.

Potential challenges, such as political interference, loom over Danantara's future. However, lawmakers emphasize a robust legal framework as essential to maintain investor confidence in the growing portfolio of state-owned enterprises.

(With inputs from agencies.)