A new sovereign fund has unveiled what it calls a "dream team" to shape its strategy, featuring former presidents and advisory roles for hedge fund manager Ray Dalio, economist Jeffrey Sachs, and a former Thai premier.
Danantara, launched last month, is the main vehicle for Indonesian President Prabowo Subianto's goal of achieving 8% economic growth by 2029. The fund will oversee all shares of state-owned enterprises and reinvest dividends.
It is projected to eventually manage over $900 billion in assets and has been described by officials as a pivotal initiative for Indonesia. Former Presidents Joko Widodo and Susilo Bambang Yudhoyono have been appointed to the fund's steering committee. Dalio, founder of Bridgewater, will provide advisory services alongside a billionaire who spent 15 years in self-imposed exile and is the father of Thailand's current premier, Paetongtarn Shinawatra.
Media reports indicate that former British Prime Minister Tony Blair could also join as an advisor, although Danantara CEO Rosan Roeslani stated more names will be announced later.
In an email, Sachs confirmed his appointment as Prabowo's special adviser, stating his role on the advisory board of Danantara is entirely voluntary and aimed at supporting Indonesia’s sustainable development without compensation.
These advisors will help navigate global risks stemming from financial volatility and geopolitical factors, according to Danantara's Chief Investment Officer Pandu Sjahrir, who spoke at the appointment ceremony.
The fund's first investment wave will be worth $20 billion, focusing on projects in natural resource processing, artificial intelligence development, and enhancing both energy and food security.
The establishment of Danantara and concerns about the state's involvement in the economy contributed to a market selloff last week in Southeast Asia's largest economy, with the main stock index dropping as much as 7% and leading to a trading halt. On Monday, Indonesian stocks fell to their lowest level since August 2021, and the rupiah hit a three-week low amid lingering concerns about fiscal health and growth prospects.
There have been worries about potential political interference in Danantara. However, Prabowo has stated that the fund can be audited at any time by anyone. Rosan expressed confidence that the appointment of professional executives would bolster market trust.
"If these appointments are well-received, it could signal positively for the Indonesian economy and job creation," he remarked, noting that all of Indonesia's state-owned enterprises are now under the new fund's management.
Analysts believe Danantara's team structure might enhance market trust due to its presence of renowned figures in the financial sector. However, economist Wijayanto Samirin emphasized the need for the fund's management to remain free from political influence in the future.
Danantara's directors include former officials from Bank Mandiri and HSBC, a former director at Indonesia's central bank, and the former chief investment officer of Indonesia Investment Authority, the nation’s first sovereign wealth fund.