Daya Anagata Nusantara (Danantara) was established to optimize the management of state owned enterprises (BUMNs). With BUMNs contributing nearly half of Indonesia’s GDP, will BUMN willingly transfer control to Danantara? For BUMN executives in the rst batch to be managed by Danantara, anxiety is rising as their positions become uncertain. A change in leadership often means changes down the line. What are the signi cant risks for Danantara? What will happen to the Ministry of BUMN? And what challenges will Danantara face amid intense political tug-of-war? by Infobank Research Bureau
Erick Thohir, Minister of State-Owned Enterprises, reported that the number of loss-making BUMNs has decreased to seven
ONE by one, the heads of major BUMNs have been summoned to the Danantara o¡ce in the Cikini area of Central Jakarta. Among those called were Sunarso and Catur B. Suharto (BRI), Ririek Adriansyah (Telkom), and Darmawan Prasodjo (PLN), along with leaders from Mandiri, Pertamina, MIND.ID, and BNI. According to Muliaman D. Hadad, the head of the Danantara Investment Management Agency, the meetings were merely introductory.
“There was nothing particularly special about it; it was just an initial communication, and we agreed to follow up on the process as soon as possible. Hopefully, this introduction will make everything more e£ective,” Muliaman D. Hadad told the media recently. “We just had casual talks today with the seven entities that will be handed over to Danantara. It was mostly about getting acquainted,” he added.
President Prabowo Subianto established the Danantara Investment Management Agency, appointing Muliaman D. Hadad as its head, a minister-level position. Muliaman, the former chairman of the Financial Services Authority (OJK), is supported by two deputy heads: Kaharuddin Djenod (President Director of PAL) and Pandu Sjahrir, who will serve as Chief Operating O¡cer (COO). Pandu is a well-known businessman and investor, the son of renowned economist Sjahrir, and a nephew of Luhut B. Pandjaitan, the former Coordinating Minister for Maritime A£airs and Investment.
Danantara will manage seven BUMNs that have long been key contributors to state dividends, along with the Indonesia Investment Authority (INA). These seven BUMNs include: BRI (Rp 1.965 trillion), Mandiri (Rp 2.174 trillion), BNI (Rp 1.087 trillion), MIND ID (Rp 295 trillion), PLN (Rp 1.671 trillion), Pertamina (Rp 1.412 trillion), Telkom Indonesia (Rp 318 trillion). Additionally, the INA contributes Rp 147.6 trillion.
The estimated total assets under management (AUM) will reach US$ 600 billion, equivalent to Rp 9,520 trillion, which amounts to 95.2% of the total BUMN assets of Rp 10,402 trillion, according to data from Infobank Research Bureau. This substantial AUM is expected to make Danantara the eight-largest superholding globally, based on Sovereign Wealth Fund Institute (SWFI), after China Investment Corporation (China) SAFE Investment Company (China), Abu Dhabi Investment Authorithy (Uni Emirat Arab), Kuwait Investment Authorithy (Kuwait), Public Investment Fund (Saudi Arabia), GIC Private Limited (Singapore). “This can be leveraged with clear key performance indicators (KPIs),” Muliaman remarked during a meeting with media editors.
President Prabowo’s vision for Danantara is to transform BUMNs into a superholding akin to Temasek in Singapore. According to Muliaman, during discussions with several senior media editors, the primary task and function of Danantara resemble those of the Indonesia Investment Authority (INA), but with expanded scope and scale.
At the very least, Danantara is expected to secure President Prabowo Subianto’s policies on food and eneršy independence as well as downstreaming industries. Additionally, it aims to optimize returns while implementing robust risk management. Muliaman D. Hadad, head of the Danantara Investment Management Agency, stated, “What INA (Indonesia Investment Authority) is doing now with its risk management and good corporate governance will be continued, but with expanded functions,” he explained.
The establishment of INA was based on Law No. 11 of 2020 on Job Creation and Government Regulation No. 74 of 2020 regarding the Investment Management Agency. According to data from Infobank Research Bureau, INA’s total assets amount to Rp 147.6 trillion. “In the future, everything will be consolidated into Danantara, along with strategic BUMNs,” Muliaman added.
Muliaman emphasized that a key responsibility of Danantara is to integrate and consolidate separated state assets. This approach is expected to optimize the mobilization of funds. “Of course, this will be done with proper governance, transparency, and risk management,” he explained.
Ultimately, there are two important aspects. The ¨rst aspect is the state assets which are separated. These are state assets in the form of investments, where the government manages wealth through both short- and long-term investments. The second aspect is the state assets which cannot be separated. These are categorized as state owned assets, such as goods acquired through the state budget (APBN).
The establishment of Danantara has attracted signi¨cant public attention. Adding to the intrigue, Prabowo’s administration still maintains the Ministry of State-Owned Enterprises (BUMN), now with three Deputy Ministers: Kartika Wirjoatmodjo, responsible for assisting Erick Thohir in overseeing 24 BUMNs. Dony Oskaria, overseeing 23 BUMNs, including those in banking. Aminuddin Ma’ruf, who, although not directly tasked with overseeing BUMNs, focuses on supporting ESG (Environmental, Social, and Governance) aspects.
According to documents from the Ministry of BUMN obtained by Infobank, six key programs have been outlined to support the 2024©2029 government: Food security, Public housing, Strengthening MSMEs, Mineral downstreaming, Eneršy security and transition, and Defense. To achieve these goals, clusters or sub-holdings have been established. For example, to realize inclusive and equitable public housing, Himbara banks, Pembangunan Perumahan, and Perumnas have been tasked with implementation.
Meanwhile, the draft State-Owned Enterprises Law (RUU BUMN) outlines a superholding scheme under Chapter IC concerning investment superholdings. Essentially, the investment holding will act as a legal entity tasked with managing operational holdings. In short, Danantara is envisioned to resemble Temasek in Singapore or Khazanah in Malaysia. However, the shareholding authority will remain under the Ministry of BUMN.
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Muliaman D. Hadad, the head of the Danantara Investment Management Agency emphasized that a key responsibility of Danantara is to integrate and consolidate separated state assets. This approach is expected to optimize the mobilization of funds. “Of course, this will be done with proper governance, transparency, and risk management,” he explained.
Over the past ¨ve years, the performance of BUMNs, according to data from Infobank Institute, shows that BUMNs have contributed more than 50% to Indonesia’s Gross Domestic Product (GDP). In 2023, their contribution to GDP was 49.78%, indicating the crucial role BUMNs play in driving the economy during crises. However, it is also acknowledged that BUMN projects often overshadow private-sector initiatives.
Erick Thohir, Minister of State Owned Enterprises, reported that the number of loss-making BUMNs has decreased to seven, down from 49 in 2020. Aggregate losses, which amounted to Rp 67.16 trillion in 2020, had been signi¨cantly reduced to Rp 17.44 trillion in 2023. Additionally, several previously loss-making BUMNs have shown positive results in 2023, including Garuda Indonesia, Asabri, Hutama Karya, Kereta Api Indonesia, Bulog, Perkebunan Nusantara, and AirNav Indonesia.
From the net pro¨t performance’s point of view, the average growth rate (2019©2023) was 27.2%. After 2021, the net pro¨t of state-owned enterprises (BUMNs) soared to almost 1.5 times the previous year’s pro¨t. In 2021, the total net pro¨t of all BUMNs reached Rp 125 trillion, while in 2022 it climbed to Rp 309 trillion, and this year’s pro¨t reached Rp 327 trillion. The year 2023 marked the peak of pro¨ts in BUMN history.
Now, according to the same data, the total assets of BUMN portfolios have surpassed Rp 10,402 trillion. Back in late 2019, their total assets were only Rp 7,773 trillion. Even during the COVID«19 crisis, while revenues dipped slightly, assets continued to grow from Rp 7,773 trillion to Rp 8,312 trillion. On average, the total portfolio assets grew by 7.6%.
In short, BUMN performance and preparation for a superholding structure have been underway, but why was Danantara still established? Clearly, as stated by Sufmi Dasco Achmad, Deputy Speaker of the House of Representatives (DPR), “There is no tug-of-war. From what I understand, the focus is on crafting a scheme to ensure the successful implementation of this investment body,” Dasco told the media recently in Jakarta.
Many were surprised by the formation of Danantara, even though Burhanuddin Abdullah, Chairman of Prabowo Subianto’s Expert Council, ®oated this idea at a seminar in Jakarta in October 2024. According to him, the agency would start operating by the latest. In fact, discussions about forming an agency to manage BUMN assets had already begun before Prabowo was inaugurated as the 8th President of Indonesia. One source mentioned that these discussions became more intensive starting in September 2024.
Now, with the Ministry of BUMN having three Deputy Ministers and Danantara with two deputies, many questions arise. What is the future of the Ministry of BUMN under Prabowo’s administration?
There has not been much to be revealed. When asked about the fate of the Ministry, a BUMN Ministry o¡cial simply answered, “I don’t know, and it’s very sensitive to comment on,” they told Infobank. They did not elaborate further or provide clear information about the future of the Ministry of BUMN.
Moreover, Danantara’s establishment has also raised eyebrows in the House of Representatives (Senayan). According to Darmadi Durianto, a member of the DPR’s Commission VI from the Indonesian Democratic Party of Struggle (PDI«P), during a public hearing with the Ministry of BUMN on November 4, 2024, he stated, “The pro¨table assets are being taken away, leaving the Ministry of BUMN to manage the struggling ones.”
Darmadi also argued that transferring the management of assets from the Ministry of BUMN to Danantara could potentially undermine the social functions historically carried out by state-owned enterprises through various government-assigned tasks. It’s no surprise, given that superholdings are generally focused solely on optimizing managed funds for maximum returns.
On the other hand, some opinions suggest that granting Danantara the authority to manage the assets and investments of state-owned enterprises could help the government avoid con®icts of interest. This is due to the separation of regulatory and operational functions within BUMNs. In short, asset management, which has traditionally been under the Ministry of BUMN, could become more business-oriented and free from political interference.
Since Danantara is a new institution, it naturally requires a legal framework. Not only that, but its structure and human resources also need to be prepared, which will likely require revisions to the existing State-Owned Enterprises (BUMN) Law. This is because its duties and functions di£er, as Danantara reports directly to the President.
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Erick Thohir, Minister of State-Owned Enterprises, reported that the number of loss-making BUMNs has decreased to seven, down from 49 in 2020. Aggregate losses, which amounted to Rp 67.16 trillion in 2020, had been signiŒcantly reduced to Rp 17.44 trillion in 2023. Additionally, several previously loss-making BUMNs have shown positive results in 2023, including Garuda Indonesia, Asabri, Hutama Karya, Kereta Api Indonesia, Bulog, Perkebunan Nusantara, and AirNav Indonesia.
Moreover, Danantara aims to create added value from the assets it manages by improving management e¡ciency. It also seeks to support strategic development projects and attract foreign direct investment (FDI). Additionally, this agency is expected to sustainably monetize its portfolio while adhering to existing regulations, including risk management, as emphasized by Muliaman.
BUMNs have currently operated under multiple laws, such as the BUMN Law, the State Finance Law, the State Treasury Law, the Supreme Audit Agency (BPK) Law and/or the Financial and Development Supervisory Agency (BPKP) Law, the Corruption Eradication Law, and, for the banking sector, the Financial Sector Development and Strengthening Law (P2SK), which includes the Banking Law, the Indonesia Deposit Insurance Corporation (LPS) Law, the Financial Services Authority (OJK) Law, and the Capital Market Law—for publicly listed entities.
The point is that Danantara is the President’s initiative and will oversee all BUMNs currently under the Ministry of BUMN. However, as observers have noted, BUMNs must be cleansed of political interests and no longer serve as “cash cows.” Their mandate is to maximize the assets they manage responsibly, avoiding recklessness that could lead to new challenges.
One of the most pressing tasks ahead is establishing Danantara’s legal framework. According to an insider at Danantara, the President is pushing for swift legal breakthroughs to ensure the agency’s operations commence soon. “It won’t take long; legally, this will be expedited because it’s the President’s directive,” said a Danantara source who declined to be named.
Furthermore, Danantara must be free from political in®uence. At the very least, its current leadership, comprising one head and two deputy heads, must share a uni¨ed vision. There should be no room for “freeloaders” in¨ltrating Danantara—people with unclear backgrounds entering through dubious means. Consideration must also be given to the fate of current employees and o¡cials within the Ministry of BUMN.
What is most apparent now is the unease among directors and commissioners from the Ministry of BUMN, many of whom are anxiously waiting to see if they will be replaced. Some appear to be hedging their bets, remaining loyal to the Ministry of BUMN while simultaneously currying favor with Danantara as their new overseer. This tug-of-war exists, even though Sufmi Dasco Achmad denies it
“There was nothing particularly special about it; it was just an initial communication, and we agreed to follow up on the process as soon as possible. Hopefully, this introduction will make everything more e£ective,” Muliaman D. Hadad told the media recently. “We just had casual talks today with the seven entities that will be handed over to Danantara. It was mostly about getting acquainted,” he added.
