Observer Highlights Fantastic Danantara Asset Ownership

Opinion of economic observers about Danantara (Doc. ANTARA)

JAKARTA - BPI Danantara is directly the number eight largest SWF in the world, because it has assets of around US$900 billion, aka around Rp. 14,000 trillion.

However, Indonesian Economic Observer Strategic and Economic Action Institution (ISEAI) Ronny P Sasmita said Danantara still needed an injection of PMN from the government, which is planned to be taken from the dividend part of SOEs to the state and capital from the results of government efficiency policies, with a total amount said to be above Rp100 trillion.

"Because assets of RP. 14 thousand trillion are not in the form of petty cash or fresh funds. This means that the assets of the seven SOEs that are members of the Danantara are not liquid assets that can be directly used to invest by Danantara," he said in his statement, Sunday, March 2.

Ronny explained that such as the assets of three state-owned banks that are members of the aerospace where most banking assets are in the form of credit given to third parties, both for consumption and investment.

"As a result, most of them are from third party funds, namely deposit customers and others, which are collected by banks," he said.

According to him, this is the conventional function of banking, namely as a financial intermediator and collecting funds from the public with a certain amount of interest agreement for a certain period of time, then lending it to parties in need, with much higher interest so that the difference in deposit interest and credit will be bank profits

Ronny conveyed that in addition to credit assets and physical assets in the form of land and buildings, bank assets can also be in the form of financial assets, such as state debt securities, share ownership in certain companies, and other types of securities.

"But again the majority of the origins are from third party funds, namely customers," he explained.

Meanwhile, non-banking BUMN assets are also the same, not in liquid form, only in the form of assets, both physical and financial assets, all of which require a kind of financial engineering to be converted into capital, such as securing the asset into derivatives, for example issuing debt securities and between the underlying assets.

Then, Danantara just received fresh funds, but indirectly owed to the buyer of the financial asset, of course with the yield.

Therefore, Ronny conveyed with the asset of Rp. 14,000 trillion, Danantara could not do anything, because it was not in the form of fresh or liquid funds, so Danantara still needed PMN hundreds of trillions from the government.

"Unfortunately, after the BUMN Law is revised where SOE finance is no longer a separated state finance, automatically after the intermediary receives PMN, the funds suddenly become part of the state's separated finances," he said.

"It is also permissible to say that this process is a kind of subtle takeover of the state budget, which may be controlled by certain parties on behalf of SOEs," he explained.

Therefore, Ronny reminded not to have too much time when he learned that Indonesia suddenly had a state-owned SWF with an asset of Rp. 14,000 trillion, because in the end it would still swallow the state budget via PMN, which then suddenly became no longer part of state finances after becoming PMN in Danantara.

"And this is also what distinguishes SWF from SWF from other countries, whose funds are set aside from the results of the exploitation of the country's natural resources, such as SWF Saudi, UAE, and RDIF Russia, and others," he said.