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View all search resultsSOE dividend grab tests Danantara’s mandate
Despite objections from Danantara, the finance minister insists the dividends be transferred this year in line with President Prabowo’s instruction.
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A woman walks on Aug. 11 past the Wisma Danantara Indonesia building on Jl. Jend. Gatot Subroto in South Jakarta. (JP/Iqro Rinaldi)
F
inance Minister Purbaya Yudhi Sadewa’s push for Danantara to remit Rp 120 trillion (US$6.8 billion) in dividends from state-owned enterprises to the state budget this year signals growing fiscal pressure but could undermine the state asset fund’s original mandate.
“This panic mode from Purbaya could be driven by the government’s tightening fiscal space,” said Herry Gunawan, executive director of think tank NEXT, pointing to the government’s plan to issue Rp 876.3 trillion in new debt next year.
Indonesian government debt has reached Rp 10.3 quadrillion as of June, according to the Finance Ministry’s Financing and Risk Management Directorate General, which is the highest-ever amount in absolute terms.
In relation to the size of the economy, debt stood at 41.26 percent of the country’s gross domestic product, well below historic highs but slightly above the 41.1 percent seen at the end of 2021 during the coronavirus pandemic.
Read also: State budget injection into Danantara could raise fiscal risks
While the government was entitled to a share of Danantara’s profits, it could not “simply determine” the amount based on the state asset fund’s total earnings, Herry told The Jakarta Post on Tuesday, particularly given weak governance and regulatory lapses.
“Danantara must first account for provisions for investment risks and capital accumulation. [You] can’t just suddenly demand exactly Rp 120 trillion, as Purbaya did, and invoking publicly in the president’s name,” Herry opined.
