Indonesia bets a new sovereign wealth fund will finally unlock its potential
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Rosan Roselani, Danatara CEO and ally of president Prabowo Subianto, needs to streamline Indonesia's lumbering state-owned giants.
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8 min read
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investment
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July 31, 2025
12:00 PM
Fortune
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Magazine·IndonesiaIndonesia bets a new sovereign wealth fund will finally unlock its potentialBy Lionel LimBy Lionel LimAsia ReporterLionel LimAsia ReporterLionel Lim is a Singapore-based reporter covering the Asia-Pacific region.SEE FULL BIO Danantara CEO Rosan Roeslani has his sights set on an economic boost.Muhammad Fadli—Bloomberg/Getty ImagesIndonesian President Prabowo Subianto came to power last year off the back of a campaign with several grand mises
Chief among them: 8% annual economic growth by the end of his term in 2029
His brainchild to get there is the country’s sovereign wealth fund, Danantara, short for Daya Anagata Nusantara, which means “the power of the future for Indonesia.” It’s tasked with boosting the economy, especially through domestic investments
The fund is also taking over Indonesia’s dozens of state-owned enterprises (SOEs), consolidating and lining their operations to make them more competitive
The idea is that integrated management can lead to more effective and optimized national resources, resulting in higher economic growth and better jobs
Yet critics have governance concerns because of a revised law that gives the president greater control of the entities and their billions of dollars in annual dividends
These concerns contributed to a dip in Indonesia’s stock market index when the fund was launched in late February
Danantara, which reports to the president, will eventually oversee all SOEs (including Global 500 companies Pertamina, the oil and gas giant, and electricity company Perusahaan Listrik Negara)
The idea of sovereign wealth funds—investment funds managed by state actors hoping to leverage their financial surplus—has existed since Kuwait set one up in 1953 to manage its oil revenues
This surplus can come from sales of natural resources in oil-rich nations Saudi Arabia or Norway, foreign exchange as in China, or even bumper tax revenue in the case of Ireland
Sometimes the funds take an active role, backing up-and-coming startups, making a play for strategic sectors, or in companies based in their own country
But Danantara is somewhat different in that it’s trying to manage and invest in its own state enterprises while surplus funds drawn from its SOEs’ dividends
The young entity’s CEO, Rosan Roeslani, argues this will finally help Southeast Asia’s largest economy develop its potential
Indonesia’s stock market index dipped in late February before climbing back up again in mid-April.Chart by Fortune “We have this dual role: How can we optimize assets from state-owned enterprises to create more value, and at the same time create quality jobs?” Rosan tells Fortune
As a sovereign fund, there need to be returns, he notes, but the priority is “sustainable economic growth.” Southeast Asia’s largest economy Indonesia accounts for roughly 40% of the region’s population and landmass. 280 million people are spread over some 17,000 islands, and the country had a GDP of $1.4 trillion in 2024, according to World Bank data
That puts Indonesia in the top 20 economies globally
While Indonesia was hard-hit during the Asian Financial Crisis of 1997–98, it was one of the region’s strongest performers during the 2008–09 Global Financial Crisis, growing by 4.6% in 2009
From 2010 to 2024 its economy grew by an average 4.74% a year, per the World Bank
But the country trails some of its neighbors in GNI per capita, which reached $4,910 in 2024
That’s enough to categorize it as an upper-middleincome country by the World Bank’s definition
Yet GNI per capita in Singapore, Malaysia, and Thailand reached $74,750, $11,670, and $7,120, respectively
That means not all of Indonesia’s people are earning as much as their regional peers—despitebeing blessed with abundant natural resources, oil, gas, and critical minerals
But Rosan thinks Danantara can help Indonesia successfully leverage its resources. “We want to develop a value-added down industry; doing that will imve our human capital, create more quality jobs, and obviously create a better economic return,” he says
Indonesia has already attracted investments to its nickel industry as part of its downing strategy after banning the export of raw nickel ore in January 2020—well before Danantara
A new phase Danantara must also line the country’s dozens of SOEs (an effort started under previous president Joko Widodo) and make them more competitive. “In the past, sometimes [SOEs] think they’re ly to monopolize
When you don’t have competition, sometimesyou become more relaxed,” Rosan says
Hilman Palaon, a re fellow at the Lowy Institute’s Indo-Pacific Development Centre, thinks Danantara marks a new phase
It’s “expected to play a key role in reshaping the SOE landscape: managing state investments, consolidating assets, and leading restructuring efforts,” he says
That involves reducing red tape and unnecessary bureaucracy, as well as fixing Indonesia’s reputation for opaqueness and, sometimes, corruption. “Maybe in the past, an SOE always had special treatment,” Rosan explains. “Usually if there’s a government ject, there’s always priority that it should be awarded to another SOE
That kind of priority we are going to revise.” Continued SOE reform is needed as these companies become increasingly important to the economy, notes Maxwell Abbott, an associate managing director and head of political risk and strategic intelligence for APAC at consultancy Nardello & Co
The country has already taken a step in the right direction, he says: “In recent years, Indonesia has made significant gress in imving SOE performance and efficiency by consolidating the number of SOEs and imving anti-bribery tocols.” Rosan argues that not all SOEs are saddled with this issue, but that SOEs in general should be more efficient, transparent, and digitized
Artificial intelligence and digitization constitute one of eight sectors Danantara has targeted for investment, to grow Indonesia’s economy while raising the standard of living
Other sectors include renewable energy, food security, and health care. “We are still way behind in terms of the health care industry
We still import 90% of our raw materials for pharmaceuticals,” Rosan says. “We are behind in terms of doctors…Just to meet the emerging-market standard, not OECD standard, we are short 100,000 doctors.” Danantara has already signed several memorandums of understanding or given loans to Indonesian companies in strategic sectors
It has an MOU with ACWA Power, a Saudi Arabian company specializing in desalination and green hydrogen , to explore renewable energy investments
Total funding is estimated to be as much as $10 billion
It also has partnerships with QIA, Qatar’s sovereign wealth fund, and CIC, China’s sovereign wealth fund, aimed at facilitating investments to Indonesia
Domestically, Danantara has invested in Chandra Asri, a petrochemical and energy firm, and vided a $405 million loan to national airline Garuda Indonesia. “Danantara’s early investment decisions show Prabowo wants to ensure domestic duction of crucial industrial inputs and vide lifelines to struggling SOEs that play a minent role in the national economy,” Abbott notes
The legacy play With more than $900 billion in assets and annual dividends of $8 billion that can be used for , by Rosan’s estimation, Danantara isn’t just a new force in global finance; it’s a signal that Indonesia will now fully control its wealth responsibly, manage its resources with strategic foresight, and invest in its future. “Danantara carries big ambitions,” says Palaon, the Lowy Institute re fellow. “It reflects Indonesia’s bold vision to break free from the middle-income trap and become a developed nation, but the real challenge lies in turning those ambitions into action.” While Rosan has been a mainstay in Indonesian with different ministerial assignments, an ambassadorship to the U.S., and a role as Prabowo’s campaign manager and strategist, he’s also a finance guy
Before , he worked in banking and cofounded his own investment firm, Recapital Group. “I came from the private sector and have actually been on the investment side
So this is [similar] to my previous job, in Indonesia or out of Indonesia,” he says
Under him are several notable peers who also hail from the finance industry or the private sector, including Pandu Sjahrir, Danantara’s chief investment officer and an early backer of Southeast Asia giant Sea
Danantara has also drafted non-Indonesians to sit on the board of advisors, serving on a voluntary and nonbinding basis: famed hedge fund manager Ray Dalio, minent American economist Jeffrey Sachs, and former Thai prime minister Thaksin Shinawatra
The two Americans are no strangers to the country: Dalio’s OceanX has been working with Indonesian officials to map its seabed, and Sachs previously advised the Indonesian government
And while Thaksin’s role may raise some eyebrows because of corruption allegations, Rosan says Thaksin is respected in Southeast Asia and that his input would be useful
If Danantara succeeds in transforming Indonesia’s economy and lifting living standards, then it will arguably bolster Prabowo’s legacy, which is still somewhat blotted by his time as an army commander during the Suharto-era dictatorship from the mid-1960s to the 1990s
While more investments in the country coupled with more competitive SOEs would in theory create more jobs, Rosan is aware of the skepticism and expectation for the fund to perform. “Obviously when a new entity receives more than $900 billion in total assets, the expectation is very high,” he says, adding that the fund will not only “perform” in terms of returns but will raise governance and compliance standards. “We are building trust right now by having the best talent, and also having good governance and transparency.” It’s a strong claim
But when asked if he’s confident that the conversation around Danantara will be positive if he speaks to Fortune again in five years, Rosan responds with a firm yes
As he puts it, we’ll see “a lot of difference.” This article appears in the August/September issue of Fortune with the headline “Danantara’s CEO thinks the new sovereign wealth fund can help Indonesia finally unlock its potential”
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