Structuring Danantara and INA in One Roof: The Missing Blueprint of Indonesia SWF

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Indonesia is entering a new era of sovereign capital power. With two sovereign wealth entities now established — the Indonesia Investment Authority (INA) under President Joko Widodo, and Danantara Indonesia recently launched by President Prabowo Subianto — the nation has the institutional machinery to redefine its long-term economic trajectory. But here lies the strategic gap: there is still no public blueprint that clearly delineates the mandates of these two capital vehicles.

Both INA and Danantara are positioned as wealth managers for the republic. Both are tasked with mobilizing capital. Both claim to be vehicles of growth. Yet this overlap in narrative has become problematic. In a high-stakes economy, clarity of mandate is everything.

The Red Flag: When Danantara & INA Clashes

This ambiguity came to light during the recent reported bidding for Chandra Asri. According to multiple sources, both INA and Danantara showed interest in participating in the same deal. While competition in markets is healthy, competition within the same state ecosystem is not. When two sovereign funds — both funded by the same republic — chase the same opportunity without coordination, it raises critical questions:

• Why do we need two sovereign funds if they end up doing the same thing?
• Are we duplicating mandates and wasting public resources?
• What happens when both entities present conflicting valuations, terms, or post-deal governance strategies?
• And most importantly: Who is accountable?

This is not just a bureaucratic concern — it’s a capital strategy problem. In the absence of clear separation and alignment, we risk turning Indonesia’s sovereign capital into a fragmented, inefficient, and politically vulnerable system.

The Wrong Response: Merger or Dissolution

Some critics have floated the idea of merging both funds or dissolving one altogether to reduce overlap. But this is the wrong response to a design flaw. The solution is not to retreat, but to restructure.

Our answer is: Do not merge. Do not dissolve. Design smarter.
Indonesia does not suffer from too many funds. It suffers from too little clarity. And the antidote is a structured mandate — one that draws lessons from the most sophisticated sovereign capital ecosystem in the world: Abu Dhabi.

Learning from the Capital of Capital: Abu Dhabi’s Dual-SWF Architecture

Abu Dhabi, the “Capital of Capital,” operates multiple sovereign vehicles with surgical precision. Most notably:

• ADIA (Abu Dhabi Investment Authority) acts as the long-term wealth compounding engine. It invests globally across asset classes with a focus on financial returns. Think of it as the national balance sheet.
• Mubadala is the national builder — deploying capital to create strategic industries, secure critical infrastructure, and lead economic transformation.
• ADQ focuses on managing government-linked commercial entities (GLCs and SOEs), improving operational efficiency and monetizing public assets.

Each of these institutions is distinct, but coordinated. There is no confusion in mandates, no turf wars — because the design is intentional.

Indonesia must take notes.

The Proposed Design: One Nation, Two Engines

Here’s how we can reframe Indonesia’s dual SWF model with strategic precision:

1. INA: The National Balance Sheet

INA should serve as Indonesia’s portfolio investor. Its mandate must be return-first — allocating capital globally and domestically with an institutional-grade investment framework. It should:

• Co-invest with global partners.
• Prioritize long-term wealth creation.
• Compound capital through diversified, risk-adjusted strategies.
• Maintain financial independence and credibility with international markets.

INA is our version of ADIA. A guardian of intergenerational wealth. It should not be dragged into industrial policy or SOE rescue missions. Its job is not to build, but to invest.

2. Danantara: The Nation Builder

Danantara, by contrast, should operate as Indonesia’s strategic capital engine — focused on creating economic resilience and transformation at home. But to be effective, it must split into two distinct operating arms:

Danantara A – The Industrial Builder (Like Mubadala)

• Focus: Build downstream industries, energy transition, digital infrastructure, and strategic sectors.
• Goal: GDP multipliers, job creation, supply chain sovereignty.
• Capital Style: Development-led, not market-led.
• Mandate: Deploy patient capital to incubate future economic pillars.

Danantara B – The Commercial Asset Manager (Like ADQ)

• Focus: Oversee and improve SOE performance.
• Goal: Reduce fiscal burden, increase returns, drive operational excellence.
• Capital Style: Active ownership with commercial KPIs.
• Mandate: Monetize state assets while protecting national interest.

This is not about creating two institutions. It’s about creating two arms under one umbrella, led by a single Group CEO, with specialized teams for each mandate.

This structure ensures:

• Clear strategy per division.
• Distinct investment theses.
• Transparent KPIs.
• One voice for national coordination and reporting.

The Command Center: A Supreme Capital Council

Even the best structure can fall apart without alignment at the top. To prevent mandate creep, capital clashes, and political interference, we propose the creation of a Supreme Capital Council.

Composition:

• The President (Chair)
• CEO of INA
• CEO of Danantara
• Coordinating Minister for Economic Affairs
• Minister of Finance
• Head of BAPPENAS

This council would act as the Capital Command Center of the republic — not ceremonial, but strategic. Its role:

• Define long-term capital strategy.
• Approve major cross-institutional deals.
• Ensure national alignment in sovereign capital deployment.
• Manage risk, reputation, and policy impact.

This is the sovereign equivalent of a board of directors overseeing a trillion-rupiah family office.

Why This Matters: Capital Is the New Policy

We often think of policy as the engine of growth. But in today’s world, capital is policy. The way a nation allocates its money defines its future.

When capital is misaligned, even the best policy fails.
When capital is coherent, growth becomes inevitable.

If Indonesia wants to rise from middle-income trap, reduce reliance on debt, and build real economic power — then our sovereign funds must not operate in silos or confusion. They must be the twin engines of a single, national capital doctrine.

Every rupiah in sovereign hands must be weaponized for value creation. This requires more than capital — it requires architecture.

We envision an Indonesia where:

• INA becomes the magnet of global capital inflow.
• Danantara becomes the architect of industrial and institutional renewal.
• The Supreme Capital Council orchestrates the whole system like a sovereign orchestra.

No duplication. No confusion. Just precision.

Closing Thought: Structure is Strategy

It’s not about how much capital we have — it’s about how we deploy it.
Structure creates clarity. Clarity creates efficiency. Efficiency creates power.

This is not just a technical proposal. It is a call to elevate the game.
A blueprint to turn sovereign capital into sovereign strength.

Let’s stop asking why do we have two funds?
And start asking: How do we make them win together?