The head of Indonesia’s new sovereign wealth fund, Danantara, has struck an optimistic tone about its prospects, brushing aside concerns over transparency and political interference – and the market turbulence that followed its launch.
Unveiled in February by Prabowo Subianto, Danantara boasts an initial commitment of US$20 billion and is central to the Indonesian president’s ambitious target of 8 per cent economic growth.
But the fund’s debut coincided with a sharp decline in the benchmark Jakarta Composite Index, which plunged as much as 7 per cent. The rupiah also sank to its lowest level since the 1998 Asian financial crisis, as investors grappled with unease over Prabowo’s economic agenda and the country’s recent political unrest.
Pandu Sjahrir, Danantara’s chief investment officer, played down the turmoil, describing it as a short-term reaction to rapid policy changes.
“I’m actually quite optimistic. The economic fundamentals of the country remain [strong],” Pandu told This Week in Asia during an interview in Hong Kong.
“Our president is moving fast in addressing new policies,” he added. “Because things are moving so fast, the market also needs time to absorb it.”
