Commentary

Danantara: a new hope or a phantom menace?

The establishment of Danantara, Indonesia’s new sovereign wealth fund (SWF), has sparked both optimism and scepticism. Modelled after successful SWFs like Singapore’s Temasek and Malaysia’s Khazanah, Danantara is expected to optimise the management of state-owned assets, drive economic growth, and enhance national welfare.

This past week has seen what some have argued are the first big mobilisations of the new Prabowo government, with coordinated student protests across 12 cities under the banner of “Indonesia Gelap”, or “Dark Indonesia”.

The students list a number of demands, from human rights to environmental issues, but the trigger for these protests lie in deep budgetary cuts initiated across the public service, to the tune of US$44 billion. The worst ministries and agencies — including the Ministry for Manpower and the Ministry for Public Works — have proposed cuts of up to 55%. The National Consumer Protection Agency is being cut a whopping 73%. Meanwhile, the National Police, the Ministry of Defence and the Supreme Court are seeing cuts of around 15-16%.

men standing in parliament

Special commentary: Governance reform in Indonesia in 2025

The AIC’s Indonesia director Kevin Evans examines the pros and cons of presidential and parliamentary systems. This follows comments last year by President Prabowo Subianto that governance of the country should return to some form of parliamentary system.
In this 5000-word analysis, Evans answers how best to structure the roles of head of state and head of government, and whether there should be separate positions of president and prime minister.

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