Speaking at the fund’s launch on Monday, Prabowo said Danantara would manage more than US$900 billion worth of assets drawn from state-owned enterprises (SOEs). Touting its impact, he added that the fund would help lift annual economic growth from 5 per cent to 8 per cent within his five-year term.
With its huge asset base, Danantara would rank as the world’s fourth-largest sovereign wealth fund, surpassing those of Saudi Arabia and Singapore.
Unlike Saudi Arabia and Singapore, however, Indonesia has consistently recorded a budget deficit, according to analysts. While Prabowo called the proposed funding of Danantara through a transfer of SOE assets an “efficient solution”, analysts have warned about potential transparency issues and mismanagement.
Last month, student-led protests erupted across Indonesia after Prabowo announced sweeping austerity measures, redirecting billions from the state budget to Danantara and his other flagship programmes, including a free-meal scheme for schoolchildren and expecting mothers projected to cost US$28 billion annually.
