Indonesia launches sovereign wealth fund

Indonesia on Monday launched a new sovereign wealth fund that will aim to manage state assets worth more than $900 billion as President Prabowo Subianto looks to turbo-charge growth in Southeast Asia’s biggest economy.

The recently inaugurated leader has pledged to take the archipelago’s annual growth from five to eight percent, ordering billions of dollars worth of cuts across government that last week sparked the first protests of his rule.

Prabowo signed a document at the presidential palace in Jakarta initiating the new fund known as Daya Anagata Nusantara, or Danantara, which is modelled on Singapore’s investment arm Temasek and received approval this month in a parliament dominated by the president’s ruling coalition.

“I, as the president of the Republic of Indonesia, sign... the government decree... about the organization and governance of the Investment Management Body, Daya Anagata Nusantara,” he said at the palace.

“It is not just an investment body, it is an instrument for national development that will optimize the way we manage our wealth. We are committed to being a developed nation.”

Danantara will take control of government holdings in state companies, with an initial budget of $20 billion, according to state news agency Antara.

Investment Minister Rosan Roeslani has been picked as the chief executive of the fund, Coordinating Minister for Economic Affairs Airlangga Hartarto told reporters after the signing.

The government has not specified which state-owned companies will fall under control of the fund but Prabowo has said he wants it to manage more than $900 billion in assets.