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View all search resultsPresident Prabowo Subianto is once again reshaping Indonesia's economic institutions. This time, he has instructed the Financial System Stability Committee (KSSK) to involve the Danantara sovereign wealth fund in its deliberations, creating what Danantara CEO Rosan Roeslani calls "KSSK Plus." But when a state investor joins discussions where its own risks may be assessed, the question is whether the arrangement strengthens policy coordination or weakens institutional independence.
The state asset fund will simply join next Monday's KSSK meeting as an "invitee" without voting rights, the finance minister has explained, citing the P2SK Law as permitting its participation, but at least two top economists are skeptical that its very presence and inputs might color the committee's decisions.
The new regulation allows foreign investors to purchase a more than 80 percent stake in local insurers if they wish to add paid-up capital, but only through initial public offerings via the Indonesia Stock Exchange (IDX) and only if no domestic investors are interested.
The leading representatives of the Financial System Stability Committee (KSSK) said that while its latest assessment indicated financial stability, it would keep an eye on the US-China trade tensions and its potential impacts on the Indonesian economy.
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