Various International Media Highlight Concerns for Indonesia's Danantara

2 hours ago 7

February 25, 2025 | 07:26 pm

TEMPO.CO, Jakarta - President Prabowo Subianto officially inaugurated Daya Anagata Nusantara Investment Management Agency (BPI Danantara) at the Presidential Palace in Central Jakarta today, Tuesday, 25 February 2025.

The event was attended by the 6th President Susilo Bambang Yudhoyono (SBY) and the 7th President Joko Widodo (Jokowi).

Danantara functions as a capital management institution for various state-owned enterprises (SOEs), including banks that are part of the Association of State-Owned Banks (Himbara).

The launch of Danantara has drawn attention from various international media. In a report by Reuters quoted on Tuesday, February 25, 2025, it was stated that Danantara will manage funds of more than US$900 billion.

The funds will be invested in sustainable projects that have significant impacts in various sectors, including renewable energy, advanced manufacturing, downstream industries, and food production.

All of these projects will contribute to help drive development in Southeast Asia's largest economy and fulfill his promise of boosting growth to 8%, from about 5% now, as quoted by Reuters.

The establishment of Danantara is said to adopt the Singapore sovereign wealth fund (SWF) model, Temasek. Danantara Indonesia will take over all of the government's ownership in state-owned enterprises, including government-owned banks such as Bank Mandiri, Bank Rakyat Indonesia (BRI), and Bank Negara Indonesia (BNI).

Channel News Asia (CNA) revealed in its report that prior to the official launch of Danantara, several experts had expressed concerns about transparency, particularly because it was not clear how the state's wealth funds would be audited.

Analysts interviewed by CNA explained that the Supreme Audit Agency (BPK) and the Financial and Development Supervisory Agency (BPKP) can only audit Danantara with the approval of the House of Representatives (DPR), which is currently dominated by Koalisi Indonesia Maju, who backed Prabowo during the 2024 general elections.

This situation occurred after the DPR ratified amendments to laws related to state-owned enterprises on February 4.

"Previously, the BPK could audit financial reports of the state-owned enterprises through various methods, but now it can only be audited through examinations with a specific purpose to detect whether or not there is state loss,” said Yassar Aulia, a researcher from the Indonesian Corruption Watch (ICW) civil society organization, as quoted by CNA.

He also added that audits of Danantara can only be carried out with approval or at the request of the DPR.

Asia News Network (ANN) also expressed similar concerns. In its report, it was mentioned that several analysts warned that Danantara could potentially face challenges in building investor trust, especially regarding its governance structure.

As the parent of SOEs, Danantara is designed to resemble Temasek in Singapore. Investment Minister Rosan Roeslani has been appointed as the CEO and is accompanied by Doni Oskaria and Pandu Sjahrir.

With assets under management reaching $900 billion, Danantara will report directly to the president, while its supervisory board is chaired by SOE Minister Erick Thohir. The new law transferring almost all SOE shares to Danantara also provides legal protection for its executives from lawsuits if they act in good faith, sparking concerns about potential corruption.

Several experts have compared the risks associated with Danantara to the 1MDB scandal in Malaysia. Nevertheless, Rosan emphasized that oversight mechanisms still operate through the KPK and BPK.

Meanwhile, China Daily reported that analysts emphasized the importance of strict supervision in Danantara's operations.

Josua Pardede, chief economist of Jakarta-based Permata Bank, assessed that Danantara has great potential as a catalyst for Indonesia's economic growth.

By optimizing SOE assets and implementing more targeted investment strategies, this entity can make a significant contribution to the economy.

"By focusing on transparency and multi-layer supervision, Danantara has an opportunity of becoming a world-class investment company that is credible and has integrity. This is why strict transparency, effective communication and independent supervision must become first priority for minimizing the risks of moral hazards and for strengthening accountability," said Pardede, as quoted by China Daily.

Editor's Choice: Prabowo Claims Danantara's Rp3tn Capital from Budget Savings; Advisor Responds

Click here to get the latest news updates from Tempo on Google News

Danantara Opens Opportunities for Private Sector in Infrastructure Development, Says Public Works Minister

1 menit lalu

Danantara Opens Opportunities for Private Sector in Infrastructure Development, Says Public Works Minister

Minister of Public Works Dody Hanggodo hopes Danantara will support the acceleration of strategic infrastructure development.

Today's Top 3 News: Former British PM Tony Blair Tapped as Member of Danantara Supervisory Board

23 menit lalu

Today's Top 3 News: Former British PM Tony Blair Tapped as Member of Danantara Supervisory Board

Here is the list of the top 3 news on Tempo English today.

Prabowo Claims Danantara's Rp3tn Capital from Budget Savings; Advisor Responds

2 jam lalu

Prabowo Claims Danantara's Rp3tn Capital from Budget Savings; Advisor Responds

Prabowo claims that he has secured more than Rp300 trillion from inefficiency, corruption, and improper spending, to be invested in Danantara.

Presidential Advisory Council Responds to IHSG Slipping After Danantara Launch

3 jam lalu

Presidential Advisory Council Responds to IHSG Slipping After Danantara Launch

Presidential Advisory Council Bambang Brodjonegoro said that the market is still trying to understand how Danantara will affect the SOEs' performance.

Dark Clouds Over Prabowo's Presidency

3 jam lalu