Indonesia Launches Danantara to Drive 8% GDP Growth With $900 Billion Sovereign Fund

Indonesia’s newly established sovereign wealth fund, Danantara, has become a central pillar of President Prabowo Subianto’s economic vision, aimed at driving 8% annual GDP growth by 2029. Launched in late February 2025, Danantara is tasked with overseeing and consolidating the operations of Indonesia’s state-owned enterprises (SOEs), including major firms like Pertamina and Perusahaan Listrik Negara. The fund is also responsible for managing the billions in annual dividends from these SOEs and using surplus capital for strategic investments in key sectors such as renewable energy, artificial intelligence, healthcare, and food security [1].

The fund’s launch, however, was met with initial skepticism in the market, as Indonesia’s stock index dipped shortly after its introduction, before recovering by mid-April. Concerns were raised about governance, particularly due to a revised law granting the president increased control over SOEs, raising questions about transparency and the risk of political interference [1]. Rosan Roeslani, Danantara’s CEO, emphasized the fund’s dual mission: optimizing state assets while fostering sustainable economic growth and job creation. “The priority is sustainable economic growth,” he stated, noting that returns are important but not the sole focus [1].

Danantara’s strategy includes streamlining SOEs to enhance competitiveness and reduce bureaucracy, a process initiated under the previous administration. The fund has already signed memorandums of understanding with international partners such as ACWA Power, QIA, and CIC, signaling a commitment to attracting foreign investment. Domestically, it has provided a $405 million loan to Garuda Indonesia and invested in Chandra Asri, a petrochemical firm [1].

Experts like Hilman Palaon from the Lowy Institute see Danantara as a transformative force, capable of reshaping Indonesia’s SOE landscape and improving governance. “It’s expected to play a key role in managing state investments and restructuring efforts,” he said [1]. Meanwhile, Maxwell Abbott from Nardello & Co. acknowledges the progress made in SOE performance, including anti-bribery reforms and consolidation efforts [1].

Rosan’s background in the private sector and banking gives him a unique perspective, allowing Danantara to adopt a more market-oriented approach. The fund has also enlisted global advisors such as Ray Dalio and Jeffrey Sachs, along with former Thai Prime Minister Thaksin Shinawatra, to provide insights and guidance [1].

With over $900 billion in assets and $8 billion in annual dividends, Danantara is positioned to play a pivotal role in Indonesia’s economic future. Its success could determine whether the country escapes the middle-income trap and moves toward becoming a developed economy. While the expectations are high, Rosan remains confident, stating that “in five years, we’ll see a lot of difference” [1].

Source: [1] Indonesia bets a new sovereign wealth fund will finally unlock its potential https://fortune.com/asia/2025/07/31/indonesia-danantara-sovereign-wealth-fund-southeast-asia/