(Feb 4): Indonesia’s Parliament passed an amendment to the country’s state-owned enterprises law, laying the legal foundation for a new entity to manage billions of dollars in state assets, while seeking investments domestically and potentially overseas.

Lawmakers, mostly from President Prabowo Subianto’s ruling coalition, approved the revision in a plenary session on Tuesday. The new framework paves the way for Daya Anagata Nusantara, or Danantara, which will consolidate Indonesia’s state firms, as well as supervise their operations, investments and dividends, State-Owned Enterprises Minister Erick Thohir said in Parliament.

The agency, which will be overseen by ministers and report directly to the president, will help the administration achieve its goal of boosting economic growth to 8% within Prabowo’s term, Thohir said.

Bloomberg News reported on Monday that Danantara will be established with a capital of about 1,000 trillion rupiah (US$61 billion or RM272.47 billion) through cash, state-owned assets, or government-owned shares, according to draft legislation it saw.

That amount is based on the consolidated capital of state-owned enterprises in 2023, which was as much as 1,135 trillion rupiah, according to the draft.

Danantara is one of Prabowo’s key initiatives to mobilise more funding for his strategic projects, including his flagship free school lunch programme, the construction of more public housing, and aiming for food and energy self-sufficiency. The president needs to ramp up spending to boost Southeast Asia’s largest economy, without bloating the state budget.

Thohir didn’t say which state-owned enterprises would be transferred to Danantara. Previous local media reports suggested that the agency could eventually manage seven other state assets, including major companies such as PT Bank Mandiri, Mining Industry Indonesia, and state oil and gas giant PT Pertamina.

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