by Mathias Hariyadi

Indonesian President Prabowo Subianto today inaugurated a new sovereign wealth fund, which is expected to manage US$ 900 billion in assets to finance projects and stimulate economic growth. This has elicited strong criticism because of the risk of corruption and slashed welfare programmes, which could deprive victims of terrorism of medical care.

Jakarta (AsiaNews) – Indonesian President Prabowo Subianto has officially launched the Danantara sovereign wealth fund to manage US$ 900 billion in assets from the country's main state-owned enterprises.

The goal of the new entity, formally known as Daya Anagata Nusantara Agency for Investment Management, is to centralise investment and foster Indonesia's economic growth, with a target of 8 per cent. Yet, the decision has sparked criticism and raised concerns about possible corruption and its impact on existing social welfare programmes.

The fund was inaugurated this morning at a ceremony attended by former presidents Susilo Bambang Yudhoyono and Joko Widodo, three former vice presidents, 65 foreign ambassadors and representatives of religious and business groups.

“We must change the way we manage this country’s resources to benefit our society and achieve national prosperity,” said President Prabowo Subianto in his address.

Danantara is Indonesia's second-largest sovereign wealth fund, after the Indonesia Investment Authority (Lembaga Pengelola Investasi, LPI), which was launched in 2021 with .5 billion in assets.

The new fund starts with an allocation of billion, to undertake strategic investments and reduce waste and corruption, according to the President Prabowo, who would like to fund a dozen projects this year, mostly related to mining.

Indonesia, said the former general, will stop exporting mineral raw materials, favouring their domestic processing to increase their added value.

However, the government’s own data indicate that the value of state-owned enterprises' assets stood at US$ 637.5 billion in 2023, much lower than Prabowo's target, so it is not yet clear how the figure of US$ 900 billion can be reached.

Several civil society groups fear that managing such a large sum could pave the way for mismanagement and corruption, like the 1Malaysia Development Berhad (1MDB) fund scandal.

In response to the criticism, Prabowo said that Danantara would be closely monitored, suggesting that religious institutions could take part in scrutinising its operations.

Royani, an anti-corruption activist and trainer at Indonesia’s Corruption Eradication Commission (Komisi Pemberantasan Korupsi, KPK), spoke to AsiaNews about the matter, expressing doubts vis-à-vis the effectiveness of this solution.

“How can religious institutions effectively monitor operations when clear procedures have yet to be established and publicly disclosed?” she asked.

The choices of the Prabowo administration also risk increasing inequalities. To finance the sovereign wealth fund and other pledges made during the election campaign, like the free school meals programme, the government slashed the budget by US$ 19 billion, affecting several sectors, including education. This sparked large-scale protests by university students.

One of the services at risk is healthcare for victims of crimes and terrorism. Chusnul Chotimah, a survivor of the 2002 Bali bombing – in which more than 200 people were killed – fears losing life-saving treatment due to the cuts imposed by the Prabowo administration.

Chusnul, 55, runs a snack stall in Sidoarjo, East Java, earning about US$ 4 a day. For medical treatment (including 37 surgeries), medication and psychiatric care, she relies on funding from the Witness and Victim Protection Agency (Lembaga Perlindungan Saksi dan Korban, LPSK).

This year, the agency saw its budget reduced by more than half to US$ 6.6 million.

Chusnul, who has a son with a rare blood clotting disorder, fears she will no longer be able to afford healthcare.

“"I can try to look for work to make money, I will fight for food and school for my kids, but to go without LPSK's aid for my treatment is impossible,” she explained. “I will no longer lead a normal life.”

LPSK officials recently confirmed to Chusnul that aid to victims of terrorism may not be guaranteed. Nevertheless, LPSK chief Achmadi told Reuters that while the agency supports Prabowo's budget cuts, it will continue to respect the rights of witnesses and victims.

• indonesia
• danantara sovereign fund
• subianto prabowo
• criticism
• welfare programmes
• victims
• terrorism
• bali 2002