Key facts
- President Prabowo Subianto is centralizing Indonesia's strategic commodity exports through the sovereign wealth fund Danantara.
- A new unit, Danantara Sumberdaya Indonesia (DSI), will manage commodity exports starting next year.
- Danantara has also gained a development investment arm focused on nationally strategic projects, potentially including a revived national car project.
- Critics question Danantara's capacity and political independence, citing its broad mandate and lack of financial reporting.
- Danantara recently raised $1.5 billion in a U.S. dollar bond sale, which investors viewed as a yield play rather than a vote of confidence in the fund's operations.
Indonesia's sovereign wealth fund, Danantara, is increasingly central to President Prabowo Subianto's nationalist agenda, particularly with its expanded role in managing strategic commodity exports. Prabowo announced last month that Indonesia would centralize exports of commodities like coal and palm oil, assigning execution to Danantara Sumberdaya Indonesia (DSI), a new unit within the fund that reports directly to the president.
This move, part of Prabowo's narrative of halting decades of resource exploitation, signals a significant shift in state intervention. A presidential decree also established a development investment arm within Danantara, intended to finance nationally strategic projects, even those with low commercial returns, potentially including a revived national car project. Experts like Yose Rizal Damuri from CSIS express concern that Danantara's functions are becoming politically driven, serving Prabowo's promises rather than strengthening existing state institutions.
Launched in early 2025, Danantara was initially pitched as Indonesia's version of Singapore's Temasek, managing state assets with a focus on maximizing investment returns through commercial principles and independence from political considerations. However, its remit has broadened significantly, with economists describing it as a sovereign wealth fund, development bank, and public service provider. The fund has already been involved in government policy priorities, including tariff negotiations and market stabilization.