Indonesia Economic News

[weijian]

Everyone does hope that it is business as usual.

Third time’s the charm: Prabowo claims victory in Indonesia presidential election

This followed the results of an unofficial “quick count” by several independent pollsters, which put him firmly ahead of his two rivals in the race, former Jakarta governor Anies Baswedan and former Central Java governor Ganjar Pranowo.

“Prabowo’s apparent one-round victory should remove uncertainty over who will lead the next administration. He, of course, appears to be Widodo’s choice of successor and has promised policy continuity, which should provide some reassurance to investors,” said Barclays economist Brian Tan.

“That said, we sense that investors are also cautiously watching what a President Prabowo would mean for fiscal policy, and whether the prudence under Finance Minister Sri Mulyani Indrawati will be maintained into the next term of government.”

“We may see business as usual, so economic growth may stay at around 5 per cent. The hope is that the president and vice-president will pick an economic team from technocrats to ensure economic policies are evidence-based and use accurate data, not because of economic nationalism or the interest of certain groups,” he said.

https://www.businesstimes.com.sg/interna...l-election

[weijian]

Our environment mounds us. And when we find ourselves in a new environment, we change. Many years ago, Jokowi was celebrated for squeezing with the masses in a flight economic cabin to attend his younger son's graduation ceremony in Spore. Now, he has been heavily criticized by many outsiders for doing what it took to install his elder son as Prabowo's deputy.

The late Suharto came into power via military unrest. Now, his son-in-law Prabowo comes into power via political unity. Is Prabowo going to be more Jokowi-like than Suharto-like? I guess we can only wait to see the sort of legacy Prabowo wants to leave behind...

Indonesia launches Danantara investment fund, channels US$20 billion into 20 strategic projects

The funds will be allocated to key sectors such as downstream nickel, bauxite, copper, artificial intelligence, oil refineries, petrochemical plants, food production, aquaculture and renewable energy – programmes central to President Prabowo Subianto’s ambitious goal of achieving 8 per cent economic growth.

With an estimated US$900 billion in assets under management, Danantara is poised to become one of the world’s largest sovereign wealth funds, propelling it to fourth place globally, ahead of its counterpart funds in Saudi Arabia and Singapore.

Prabowo emphasised that its role not just as a financial powerhouse, but also as a powerful development tool that will reshape how the nation manages its wealth, ultimately driving greater prosperity for its people.

Danantara was founded by redirecting the dividends from seven major SOEs – Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia, PLN, Pertamina, Telkom and Mining Industry Indonesia. These dividends, amounting to 1,000 trillion rupiah (S$82 billion), were drawn from the 2023 financial year.

With the appointment of figures with strong political and business backgrounds, concerns have emerged that the fund may end up serving the interests of certain elites rather than fulfilling its mandate as a transparent and accountable national investment manager.

Achmad Nur Hidayat, a public policy analyst from UPN Veteran Jakarta, cited Malaysia’s 1MDB scandal as an example of how political dominance over an institution undermined the rule of law. “The same concerns apply to Danantara. If this institution is more influenced by political interests than by strict regulations, similar scandals could occur,” he pointed out.

https://www.businesstimes.com.sg/interna...c-projects