Danantara Indonesia Unveils "Dream Team" to Chart its Strategy
New Sovereign Fund Aims to Achieve 8% Economic Growth Target by 2029
JAKARTA: Danantara Indonesia, a new sovereign fund, has unveiled its "dream team" to chart its strategy, including ex-presidents and advisory roles for hedge fund manager Ray Dalio, economist Jeffrey Sachs, and former Thai premier Thaksin Shinawatra.
Dream Team to Chart Strategy
Danantara, launched last month, is Indonesian President Prabowo Subianto’s main vehicle to achieve his 8% economic growth target by 2029 by managing all shares of state-owned enterprises and reinvesting the dividends in commercial projects. The fund is slated to eventually manage more than $900 billion worth of assets and has been described by officials as Indonesia’s version of Singapore’s Temasek.
Steering Committee and Advisory Roles
Former Indonesian Presidents Joko Widodo and Susilo Bambang Yudhoyono were named members of the fund’s steering committee, while Dalio, founder of the world’s largest hedge fund Bridgewater, will assume the advisory role alongside Thaksin, a billionaire who spent 15 years in self-exile avoiding jail for abuse of power and is the father of Thailand’s current premier Paetongtarn Shinawatra. Media reports suggested that former British Prime Minister Tony Blair may also join the fund as an advisor, but Danantara CEO Rosan Roeslani only confirmed that more names would be announced later.
Advisory Roles
Sachs, in an email, confirmed that he had been appointed Prabowo’s special adviser, stating that his work would be entirely voluntary and without compensation. He will serve on the advisory board of Danantara and support Indonesia’s sustainable development.
Impact on Market Confidence
The appointments of these global names could potentially secure market trust, according to Oktavianus Audi, an equity analyst at Kiwoom Sekuritas. However, economist Wijayanto Samirin at Paramadina University emphasized the need for the fund’s management to ensure that it is not subject to political interference in the future.
Initial Investment Wave
Danantara will target projects in natural resources processing, artificial intelligence development, and energy and food security in its first wave of investment worth $20 billion. The fund’s Chief Investment Officer Pandu Sjahrir believes that the appointments will offer guidance on managing the impact of global risks from intensified financial volatility and geopolitical factors.
Market Reaction
The establishment of Danantara and concerns about the state’s substantive role in the economy were among the causes of a market selloff last week in Southeast Asia’s biggest economy, according to some analysts, when the main stock index fell as much as 7%, triggering a trading halt. Indonesian stocks tumbled on Monday to their lowest since August 2021, while the rupiah currency hit a three-week low as concerns over the country’s fiscal health and growth prospects linger.
Conclusion
The appointment of a "dream team" to chart Danantara’s strategy is a significant step towards achieving its goal of 8% economic growth by 2029. The fund’s management must ensure that it is transparent and free from political interference to maintain market confidence and trust. The success of Danantara will be crucial in driving Indonesia’s economic growth and development.
Frequently Asked Questions
Q: Who are the members of Danantara’s steering committee?
A: Former Indonesian Presidents Joko Widodo and Susilo Bambang Yudhoyono, as well as former Thai premier Thaksin Shinawatra.
Q: Who are the advisory roles?
A: Ray Dalio, founder of Bridgewater, and Jeffrey Sachs, an economist, will serve on the advisory board of Danantara.
Q: What is the focus of Danantara’s initial investment wave?
A: The fund will target projects in natural resources processing, artificial intelligence development, and energy and food security.