The Indonesian government is planning to float a $5 billion sovereign wealth fund to bolster investments in the country, media reports said. It is reported that the sovereign wealth funds expect to attract $ 15 billion.
The move comes at a time when the country’s president Joko Widodo has passed out a job creation law. The law expects to bring changes to the county’s labour system and natural resources management.
Sri Mulyani Indrawati, minister of finance, told the media, “The government would inject up to 30 trillion rupiah ($2.04 billion) in cash for its equity and add other assets, including stakes in state companies that would in total reach 75 trillion rupiah or $5 billion. The government would leverage that to attract funds for investment totalling $15 billion. The model of this sovereign wealth fund is a combination of development fund and stabilisation fund and we would use international sovereign wealth fund models as the standards for best practice.”
It is reported that the sovereign wealth fund will be called Investment Authority Indonesia. The government expects to roll out supporting regulations for the development within a week. Furthermore, the funds will be managed by top level executives present in the executive and advisory board.
The government is seeking reliable strategic partners for asset development in order to attract better investments. Indonesia’s economy slumped 5.32 percent in the second quarter, marking the worst financial contraction since the 1998 economic downturn.