Indonesia Enacts Regulation to Launch Danantara and Boost Economy
JAKARTA, investortrust.id - Indonesia unveils a transformative legal framework and a new investment body to manage state wealth and fuel economic progress. Signed into law by President Prabowo Subianto in Jakarta on Monday, Feb. 24, 2025, these measures establish a powerful entity to oversee dividends from state-owned enterprises and channel funds into high-impact national projects, signaling a bold step toward industrialization and sustainable growth.
President Prabowo Subianto enacted sweeping changes to Indonesia’s economic landscape on Monday, Feb. 24, 2025, by signing Law Number 1 of 2025 on State-Owned Enterprises, commonly referred to as the BUMN Law, at the Presidential Palace in Jakarta.
Alongside this, he issued Government Regulation Number 10 of 2025, which outlined the structure and governance of the newly formed Badan Pengelola Investasi Daya Anagata Nusantara, or BPI Danantara. In a separate decree, Presidential Decision Number 30 of 2025, Prabowo appointed the supervisory board and executive body of BPI Danantara, marking its official launch.
“Today, on Monday, Feb. 24, 2025, I, as President of the Republic of Indonesia, signed Law Number 1 of 2025, amending Law Number 19 of 2003 on State-Owned Enterprises, and Government Regulation Number 10 of 2025 on the organization and governance of BPI Danantara,” Prabowo declared during the signing ceremony at Merdeka Palace.
The BUMN Law, passed by Indonesia’s parliament on Tuesday, Feb. 4, 2025, defines BPI Danantara as a government entity tasked with managing dividends from state-owned enterprises, a role aimed at optimizing national wealth.
Prabowo touted the initiative as a cornerstone of his administration’s first 100 days, claiming it secured over Rp 300 trillion, equivalent to $20 billion, in state savings. “Funds previously stalled by inefficiency, corruption, and misdirected spending are now redirected to be managed by BPI Danantara,” he said.
The president outlined plans to invest these resources into 20 strategic national projects focused on industrialization and downstream processing, or hilirisasi, a policy prioritizing value-added production over raw material exports.
The investment strategy targets sectors like renewable energy, advanced manufacturing, and downstream industries, with Prabowo emphasizing tangible benefits. “These high-impact projects will create significant value, quality jobs, and long-term prosperity for Indonesians,” he said.
He underscored a shift in economic philosophy, stating, “We will no longer sell our natural resources cheaply. Indonesia is not just a source of raw materials for other nations.”
BPI Danantara, envisioned as more than a conventional investment manager, aims to rank among the world’s top sovereign wealth funds—already placing sixth globally, according to government estimates.
“We have proven our commitment to managing Indonesia’s wealth with strict financial discipline and responsible governance,” Prabowo said, blending English and Indonesian to address both domestic and international audiences. The body’s launch reflects his ambition to achieve an 8% economic growth rate, a target he described as requiring “bold and strategic decisions.”
The initiative builds on existing frameworks like the Ministry of State-Owned Enterprises’ oversight of firms such as PT Pertamina and PT PLN, which generate substantial dividends. By channeling these funds through BPI Danantara, the government seeks to enhance efficiency and transparency.
Analysts view the move as a signal to global investors of Indonesia’s intent to modernize its financial governance, potentially boosting foreign direct investment in Southeast Asia’s largest economy.
For Prabowo, BPI Danantara represents a national development instrument, not just a financial entity. “It must optimize Indonesia’s wealth for the welfare of all its people,” he said. The signing ceremony, attended by cabinet members and business leaders, underscored the administration’s focus on sustainable, high-impact investments to transform Indonesia into an advanced economy.