Indonesian authorities formally launched a new sovereign wealth fund on Monday that will aim to manage state assets worth more than $900 billion as President Prabowo Subianto looks further to boost growth in Southeast Asia's biggest economy.
The recently inaugurated leader has pledged to increase the archipelago's annual growth from 5% to 8%. He has also ordered billions of dollars worth of cuts across government, which last week sparked the first protests of his rule.
Prabowo signed a document at the presidential palace in Jakarta initiating the new fund, known as Daya Anagata Nusantara, or Danantara, which is modeled on Singapore's investment arm Temasek and received approval this month in a parliament dominated by the president's ruling coalition.
"I, as the president of the Republic of Indonesia, sign ... the government decree ... about the organization and governance of the Investment Management Body, Daya Anagata Nusantara," he said at the palace.
"It is not just an investment body; it is an instrument for national development that will optimize how we manage our wealth. We are committed to being a developed nation."
Danantara will take control of government holdings in state companies, with an initial budget of $20 billion, according to state news agency Antara.
Investment Minister Rosan Roeslani has been picked as the chief executive of the fund, Coordinating Minister for Economic Affairs Airlangga Hartarto told reporters after the signing.
The government has not specified which state-owned companies will fall under control by the fund, but Prabowo has said he wants it to manage more than $900 billion in assets.
As of 2023, government data showed state-owned enterprise assets were worth $637.5 billion, much lower than Prabowo's target.
He will use the fund as an investment vehicle and said it would "be invested in 20 or more high-impact national projects" this year.
Prabowo said the initial funding would be used for projects in nickel, bauxite, copper, food production, renewable energy and building an AI center, oil refinery and petrochemical factory.
Danantara will be Indonesia's second sovereign wealth fund after the Indonesia Investment Authority (INA), which was launched in 2021 and holds $10.5 billion in assets.
"This event marks a new era in the transformation of strategic investment management in the country," presidential secretariat spokesman Yusuf Permana said in a statement Sunday.
"It is also part of the government's commitment to realizing ... a grand vision aimed at elevating Indonesia's economy to a higher level through sustainable and inclusive investments."
Prabowo's cuts to fund Danantara and a multibillion-dollar free lunch program have stoked student-led protests by thousands across Indonesia's cities, including the eastern city of Makassar, where police fired tear gas.
Austerity measures announced by Prabowo in late January sparked the rallies last week, underpinned by a social media movement known as "Dark Indonesia."
The fund will also report directly to Prabowo and some experts have cautioned that it will need proper monitoring and management, otherwise it could raise governance concerns.
