Danantara (Indonesia’s sovereign wealth fund) currently oversees 1,044 state-owned enterprises (SOEs), a number the government plans to sharply reduce. President Prabowo said the total would be rationalized to no more than 300 enterprises.

Jakarta (Indonesia Window) – Indonesian President Prabowo Subianto on Thursday (Jan. 22) said his government has allowed the country’s sovereign wealth fund, Danantara Indonesia, to recruit expatriates and foreign nationals to lead state-owned enterprises, a move he described as necessary to meet international standards of governance and accelerate economic growth.

Speaking at the World Economic Forum (WEF) Annual Meeting in Davos, Switzerland, the president stressed that economic growth requires not only peace and stability, but also strong statecraft and efficient capital allocation.

He said the establishment of Danantara Indonesia last February marked a turning point in the country’s development strategy.

“Growth requires statecraft and capital, in particular the efficient allocation and reallocation of capital,” he said, adding, “that’s why we established our sovereign wealth fund, Danantara Indonesia”.

The president said Danantara, which he described as meaning ‘the energy to power the future of Indonesia,’ manages assets worth around 1 trillion U.S. dollars. With the fund in place, he added, Indonesia is now positioned as an equal partner for global investors.

“With Danantara, Indonesia is now able to be your partner. We will co-invest and grow with you,” he said, emphasizing, “Indonesia is no longer just a land of peace and stability. Indonesia is increasingly a land of opportunity.”

Danantara has been mandated to finance and co-finance what the government calls ‘the industries of the future,’ as part of a broader push to industrialize the country in a more significant and strategic way. The president said the fund would actively pursue co-investment opportunities with international partners.

“We will co-invest and grow with you,” he told global business and political leaders attending the forum.

As part of reforms to improve efficiency and governance, Danantara currently oversees 1,044 state-owned enterprises (SOEs), a number the government plans to sharply reduce. The president said the total would be rationalized to no more than 300 enterprises.

“We will rationalize, we will get rid of inefficiency,” he said. “We want the best governance and the best management under international standards,” he added.

To achieve that goal, the president confirmed that he has permitted Danantara to recruit foreign professionals to take on leadership roles within the fund and its portfolio companies.

“I have allowed Danantara to recruit expatriates, foreign citizens, to be able to lead these companies,” he said. “We want the best brains and the best minds in the world”.

The president expressed confidence that these measures would deliver strong results, predicting Indonesia’s economic growth would exceed global expectations.

“I am convinced that the growth of our economy will be significantly surprising to many in the world,” he said.

Reporting by Indonesia Window