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Jakarta Post

[COMMENTARY] Indonesia’s planned $5b sovereign wealth fund raises questions

  • Vincent Lingga

    Jakarta

Jakarta   /   Mon, October 26 2020   /  01:00 am
One hundred dollar notes are seen in this photo illustration. (AFP/Getty Images/Brendan Smialowski)

Indonesia will soon join the prestigious club of the few Asian countries that have established sovereign wealth funds (SWF). The newly passed Job Creation Law stipulates the establishment of an Indonesian SWF to be called the Indonesia Investment Authority (LPI) with an initial capital of Rp 15 trillion (US$1 billion) derived from the state budget. Few technical details are available so far, as presidential and ministerial regulations have yet to be enacted to guide the operation and management of the LPI, but Finance Minister Sri Mulyani Indrawati says the LPI will consist of development and stabilization funds. Sri Mulyani said the government would immediately increase the LPI capital fivefold to $5 billion, of which $2 billion would be in cash (state budget) and the remaining $3 billion in shares of state-owned enterprises (SOEs) and other state assets. As a former managing d...