Potential Collision Of Interest Amid The Presence Of The Danantara

JAKARTA The presence of the Anagata Nusantara Power Investment Management Agency (Danantara) is believed to have a positive impact on the Indonesian economy. However, the government is advised that a professional figure dominates the organizational structure of the Danantara.

The Indonesian government will inaugurate the Danantara Investment Management Agency (BPI) on February 24, 2025. President Prabowo Subianto said Danantara would become a new economic force that supports the national sector in various strategic sectors.

Dantara is the consolidation of all our economic strengths in the management of SOEs. This is Indonesia's energy and future strength," said President Prabowo Subianto.

Luhut Binsar Pandjaitan as Chairman of the National Economic Council (DEN) revealed that Danantara's initial funding reached IDR 25 billion US dollars.

A number of economic observers assessed that Danantara could be a breakthrough in managing state assets. Paramadina University economist Wijayanto Samirin said the formation of Danantara would reduce the dependence of SOEs on State Capital Participation (PMN) and increase flexibility in attracting investment.

However, the concern of a number of observers is the possibility of a conflict of interest in the establishment of this Danantara if it is not filled with professional people, but politicians.

Danantara is an investment management agency or sovereign wealth fund (SWF) that was formed to optimize the management of state assets at a large scale and better coordination.

The formation of the Danantara is based on the third amendment to Law Number 19 of 2003 concerning BUMN. This revision of the law was passed at the DPR Plenary Meeting on February 4, 2025, which regulates Danantara's duties and functions as an investment management agency.

As an investment management agency, Danantara will manage state assets to finance strategic projects. More than 900 billion US dollars or more than Rp. 14,000 trillion is the target of assets that will be managed by the government, while the initial investment prepared reaches 20 billion US dollars (around Rp. 325.8 trillion).

Citing Indonesia.go.id, the Danantara management model refers to the Singapore's Themasek Holdings Limited concept and acts like the Indonesia Investment Authority (INA).

But Danantara has a wider scope because it not only manages certain assets, but also consolidates government assets spread across various ministries to be more integrated and efficient.

Paramadina University economist Wijayanto Samirin said the presence of Danantara could reduce the dependence of SOEs on PMN. This happens because later Danantara is expected to embrace various strategic partners and attract investment into the country.

The Aerospace Settings also make it more agile to attract investment or embrace strategic partners compared to conventional SOE formats. As a result, the dependence of SOEs on PMN will be reduced," said Wijayanto, quoting Antara.

The same thing was said by the Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira. According to him, the existence of the Danantara can bring positive things to the Indonesian economy.

One of them, Danantara can accelerate energy transition financing. According to Bhima, Danantara's assets will be able to finance the early retirement program for coal Steam Power Plants (PLTU) or the development of renewable energy (EBT).

"The most important thing is that these guaranteed assets are assets outside the coal power plant," Bhima told VOI.

He added that the proceeds from Danantara could be a source of financing for government programs, such as three million houses and other food security programs.

But on the other hand, Bhima Yudhistira encourages the importance of placing a professional figure in the organizational structure of the Danantara. For this reason, according to Bhima, the Danantara must still be wary of its governance.

"From the start, we have suggested that the proportion of boards that come from professionals must be dominant. There can be conflict of interest if it is filled by politicians, for example, in the structure of the board director," he said.

Contacted separately, economist Celios Nailul Huda emphasized the clear division of authority of the Ministry of SOEs and Danantara in order to avoid conflicts of interest.

"Don't let there be a collision of interest between the two parties," said Huda.

In addition, according to Huda, it is also necessary to emphasize which powers regulate which SOEs are included in the management of the Danantara and those that are not.

According to him, Danantara should not be burdened by regulating state-owned companies that are sick. That way, this sick company should still be the authority of the Minister of SOEs.

Finally, for those with Public Service Obligations (PSO) it is also hoped that there will still be government interference, so it does not only prioritize profits.

"PSO must have value from the people that must be charged to BUMN and Danantara," he concluded.