Indonesia launched an ambitious sovereign wealth fund that aims to oversee more than $900 billion in assets as President Prabowo Subianto seeks to boost the nation’s growth from five to eight percent.
The fund, known as Daya Anagata Nusantara or Danantara, was officially initiated on 24 February when Prabowo signed a document at the presidential palace in Jakarta.
The Indonesian president described it as "not just an investment body, it is an instrument for national development that will optimise the way we manage our wealth."
Birth of a Giant Among Global Wealth Handlers
Danantara will take control of government holdings in state companies with an initial budget of $20 billion. The fund’s structure draws inspiration from Singapore’s investment arm Temasek, but aims to surpass it in scale and scope.
Investment Minister Rosan Roeslani has been appointed as chief executive, while State Enterprise Minister Erick Thohir will serve as chairman of the supervisory board.
"This event marks a new era in the transformation of strategic investment management in the country," presidential secretariat spokesman Yusuf Permana said.
In its first wave of investments, the fund will put $20 billion into more than 20 projects in sectors such as nickel, bauxite, copper processing, food production, renewable energy, artificial intelligence, oil refineries, and petrochemical plants.
From Desert Sands to Island Shores: The SWF Journey
The concept of sovereign wealth funds first took root in Arabia, with Kuwait establishing the world’s first state-level SWF in 1953.
The Kuwait Investment Authority, created from oil revenues before Kuwait gained independence from the United Kingdom, broke new ground in how nations could manage their excess wealth.
Since then, SWFs have grown in number and size worldwide. Many were built on natural resource wealth, such as Norway’s Government Pension Fund, which now holds over $1.4 trillion in assets.
The establishment of Danantara makes Indonesia the latest nation to jump on the bandwagon of creating such funds, joining a global trend that has seen SWF assets grow from approximately $4 trillion in 2008 to more than $10 trillion by 2021.
U.S. Interest Grows as Jakarta Launches Fund
The timing of Indonesia’s move comes as the United States also explores the possibility of creating its own sovereign wealth fund.
On 3 February, President Donald Trump signed an executive order directing Treasury Secretary Scott Bessent and Commerce Secretary-designate Howard Lutnick to develop a plan for a U.S. sovereign wealth fund within 90 days.
However, unlike resource-rich nations, the U.S. lacks traditional funding sources for such a fund. The U.S. proposal diverges from standard models, potentially relying on asset monetization or debt issuance rather than surplus wealth.
Financial experts have questioned the U.S. approach. “The idea of a US SWF financed through borrowing contradicts the essence of sovereign wealth,” writes Udaibir Das, a senior adviser of the International Forum of Sovereign Wealth Funds. “[It’s] making it more akin to a sovereign investment fund with short-term fiscal considerations rather than a long-term wealth-preserving vehicle.”
Management Hopes and Growing Pains
Danantara will be Indonesia’s second sovereign wealth fund, following the Indonesia Investment Authority, or INA, which was established in 2021 and now holds $10.5 billion in assets. Unlike INA, Danantara will have broader powers and direct control over state-owned enterprises.
The fund will cast its net wide, overseeing assets of Indonesia’s seven largest state-owned enterprises with a combined portfolio exceeding $900 billion.
These include energy company Pertamina, utility Perusahaan Listrik Negara, telecommunications firm Telkom Indonesia, mining holding company Mind ID, and three major banks—Bank Rakyat Indonesia, Bank Mandiri, and Bank Negara Indonesia.
Governance Concerns and Public Response
Some analysts expressed worry about the fund’s transparency and governance.
Yassar Aulia, a researcher with non-governmental organisation Indonesia Corruption Watch, raised concerns about the audit process, noting that Indonesia’s audit board could only examine the fund “through examinations with a specific purpose to detect whether or not there is state loss.”
However, Rosan dismissed such concerns, stressing that "there is no immunity from the law in this country" and confirming that the Corruption Eradication Commission could audit Danantara "anytime."
The launch has also stirred controversy among citizens. Prabowo’s cuts to fund Danantara and an ambitious multi-billion-dollar free lunch programme have triggered student-led protests across Indonesia’s cities, with some demonstrators in the eastern city of Makassar facing tear gas.
Despite the hurdles ahead, Indonesia seems bent on making its mark in global investment management through Danantara, which Prabowo believes will rank among the world’s largest sovereign wealth funds.
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