Indonesia Launches $20 Billion Sovereign Wealth Fund Amid Budget Cuts
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Indonesia’s President Prabowo Subianto has signed a regulation to officially establish the country’s new sovereign wealth fund, with an initial value of $20 billion. This move is a key part of the president’s economic strategy, designed to stimulate long-term growth and attract global investments to the country.
The newly created Investment Management Agency will oversee the fund, which is expected to eventually manage assets worth more than US$900 billion. Modeled on Singapore’s highly successful Temasek, the fund aims to strengthen Indonesia’s financial stability, manage the country’s natural resources, and support infrastructure development.
The establishment of the sovereign wealth fund has already received approval from Indonesia’s parliament, which is controlled by Subianto’s ruling coalition. This approval marks a significant milestone in the president’s efforts to restructure Indonesia’s economy.
President Subianto has set ambitious goals for the country’s future, aiming to increase Indonesia’s annual economic growth from 5% to 8%. As part of his economic reform package, he has also ordered billions of dollars in government budget cuts to streamline spending and boost efficiency. However, these austerity measures have sparked protests, marking the first wave of public discontent since Subianto took office.
Despite the opposition, the launch of the sovereign wealth fund represents a bold step toward strengthening Indonesia’s economic position and promoting sustainable development. By following the example of successful funds like Temasek, the new initiative is expected to play a pivotal role in enhancing the country’s competitiveness and long-term economic growth.