Indonesia ’s plan to bankroll its new sovereign wealth fund, Danantara, through sweeping austerity measures has sparked a public backlash and concerns about transparency, as critics warn of potential corruption and unchecked political influence in managing the nation’s vast state-owned assets.
President Prabowo Subianto revealed on Saturday that 750 trillion rupiah (US$44 billion) would be raised through public sector budget cuts, a move that will affect spending across ministries and agencies.
These cuts, aimed at streamlining government operations, will limit expenditures on everything from official travel and meetings to disaster prevention equipment and civil servants’ wages. A portion of these savings, 325 trillion rupiah, will be channelled into the new fund’s investment arm.
Daya Anagata Nusantara, or Danantara, is Indonesia’s new sovereign wealth fund that will be launched next Monday with the goal of generating higher dividends from the country’s sprawling state-owned sector and attracting foreign investments.
The new fund would have an initial capital of 1,000 trillion rupiah but would eventually manage more than US$900 billion in assets, Prabowo said on February 13.