Measuring Danantara’s Potential and Challenges for the Indonesian Economy, Here’s an Explanation from IPB University Expert

The Indonesian government will inaugurate the Daya Anagata Nusantara Investment Management Agency (Danantara) on February 24, 2025 as an effort to manage the country’s strategic assets to boost economic growth.

Danantara has become a hot topic of discussion in various circles, raising great expectations as well as concerns about its transparency and effectiveness in managing state investment funds.

Professor of the Faculty of Economics and Management at IPB University, Prof Bambang Juanda, said that Danantara is designed as an investment management agency that aims to optimize the country’s strategic assets and attract investment, both domestic and foreign.

“With funds that are said to be very large, this agency is expected to accelerate the development of infrastructure, energy, and other strategic sectors,” he said.

However, Prof Bambang continued, there are a number of concerns that have arisen, especially regarding the supervisory structure and transparency. 

Some have questioned the government’s decision that Danantara will not be directly supervised by the Corruption Eradication Commission (KPK) and the Supreme Audit Agency (BPK). 

“This raises the suspicion that the management of this large fund could be vulnerable to abuse of authority and corruption,” he said.

In addition, Prof Bambang added, the decision to involve all former presidents as Danantara supervisors has also drawn mixed responses. 

“Some see it as a step to ensure the credibility of this institution. But others are concerned about potential conflicts of interest and political interference in investment policy,” he said.

Despite the controversy, Prof Bambang said that Danantara has the potential to bring strategic benefits to the national economy. 

With a good investment management system, the agency can reduce dependence on foreign debt, thereby strengthening economic stability.

“In addition, Danantara can accelerate the development of strategic infrastructure (toll roads, ports, and renewable energy), attract foreign investment, increase Indonesia’s competitiveness in the global market, and create more jobs in productive sectors,” he said.

However, Prof Bambang continued, if not managed with high transparency and accountability, Danantara could pose a threat to economic stability. 

“The biggest risks include potential misuse of funds, too much political influence in investment decision-making, and social impacts such as land evictions without careful planning,” he said.

As an IPB University Economics Expert, Prof Bambang emphasized that the establishment of Danantara must prioritize the principles of accountability, transparency, and public involvement in its management. 

With strict supervision and good governance, this agency can become an important pillar for national economic growth. 

“However, without clear regulations and supervision, the existence of Danantara can backfire and potentially harm the people and the Indonesian economy,” he said.

Prof Bambang said that IPB University will continue to conduct scientific studies related to the impact of Danantara on the economy and community welfare. 

“We also encourage the government to ensure professional management and free from political interests, so that the ideals of building an independent and competitive economy can be truly realized,” he said. (dr) (IAAS/RUM)