Indonesia is a US$1.4 trillion economy but to me, that’s still too small compared to the true wealth we possess. In my previous article about the capital bunker crisis, we estimated roughly US$3–4 trillion in dormant assets, most of which generate zero returns. And let’s not forget, we have vast land and sea, yet we still haven’t figured out how to extract real wealth from them. This is where Danantara emerges, a brilliant institutional innovation by President Prabowo. He understands we have tremendous resources, but they are still mismanaged. Danantara is not “another” government created institutions. This one is different, it is not just to manage tremendous wealth, but to do so differently than conventional public bodies.
We need an agile institution; fast, decisive, and bold. That doesn’t mean compromising governance. Danantara reports directly to the President, which proves this isn’t just another agency. It’s part of a national sovereign strategy. With this much wealth at stake Anyone looking to interfere with personal interests or possessing “mental tempe” mindset should step aside.
It’s simple: go big or go home.
1. Why Benchmark Abu Dhabi?
I explained this before in my article here But it’s worth repeating:
The title Capital of Capital wasn’t claimed by Abu Dhabi—it was given. Because they did it right.
Abu Dhabi’s success wasn’t accidental—it was built through deliberate institutional design. While most nations choose between preserving wealth or deploying it, Abu Dhabi mastered the balance. It understood early that capital must be structured, not scattered. Mandates matter. Portfolios must serve a purpose.
They didn’t just manage money, they built a sovereign economic engine, where each fund plays a role in preserving wealth, growing GDP, and strengthening national resilience. Abu Dhabi has proven that sovereign wealth is not a vault—it’s a lever. Not just for financial stability, but for engineering a diversified, post-oil future.
That’s why capital flows to Abu Dhabi. And that’s why we benchmark against them.
2. SWF Economics: Wealth ≠ GDP
Sovereign Wealth Funds are not GDP engines by default. A fund earning 6–8% annually from global assets might look great on paper—but it contributes nothing to GDP if that capital never touches the domestic economy. GDP measures value created within national borders: real goods, real services, real jobs.
Many policymakers still get this wrong. They assume as long as a SWF is profitable, the country is progressing. Wrong. A fund can grow financially, while the nation stagnates—if its capital isn’t deployed into real production. GDP is activated only when sovereign capital:
- Builds domestic infrastructure (roads, ports, energy grids)
- Funds national industries (mining, healthcare, tech)
- Pays local wages and stimulates consumption
- Drives innovation ecosystems (R&D, education, advanced sectors)
Capital must collide with real economic activity to count toward GDP.
If it sits in passive portfolios, it might help fiscal buffers but it doesn’t grow the economy.
Preserve wealth, and you protect value.
Deploy capital, and you multiply it.
3. How Abu Dhabi Does It Right
Abu Dhabi operates multiple sovereign vehicles—EAI, ADIC, and more—but for Indonesia’s journey, these three are the most relevant:
Abu Dhabi Investment Authority (ADIA) – The Storehouse
ADIA is the UAE’s global vault—long-term, diversified, risk-managed. Its impact on GDP is indirect, unless returns are redirected to domestic reinvestment. Think of ADIA as the nation’s balance sheet—quiet, liquid, and defensive.
Key takeaway for Danantara: We must place capital in profitable assets, domestically and globally. Strategic global footprints will strengthen Indonesia’s position in geopolitics and future alliances.
Mubadala – The Builder
Mubadala is the industrial architect. It invests in aerospace, semiconductors, clean energy, logistics, and healthcare. This fund doesn’t just chase profit—it builds the future of the UAE through capital strategy.
Key takeaway for Danantara: Downstreaming is the closest strategy we can execute to build the nation. By downstreaming our strategic commodities, we can build up national manufacturing, create millions of jobs, and increase real domestic production.
Abu Dhabi Developmental Holding (ADQ) – The Operator
ADQ is the executor. It commercializes SOEs across utilities, health, logistics, and food. It’s a holding company that turns dormant state assets into productive enterprises.
Key takeaway for Danantara: This is where things get interesting. Earlier, we estimated US$3–4 trillion in dormant assets owned by Indonesia’s SOEs. These must become wealth generators, not budget parasites. SOEs must be judged like real businesses. We must activate these assets via PPP, private-sector exploration, or alternative investment vehicles.
4. Recycling Capital = The Sovereign Flywheel
The most powerful capital model isn’t linear, it’s circular.
When sovereign capital is deployed into real sectors, those sectors generate returns. If returns are reinvested—not absorbed—into new national priorities, it creates a sovereign flywheel of compounding capital.
Invest → Produce → Return → Reinvest → Upgrade
- Invest: Targeted capital allocation into strategic sectors
- Produce: Those sectors create jobs, value, and growth
- Return: Profits flow back to Danantara or the treasury
- Reinvest: Capital is redirected to new national imperatives
- Upgrade: The economy evolves—more scale, more resilience
Key Data Points
- Global SWF Returns: Sovereign wealth funds (SWFs) have delivered average annual returns of 6–8% over the past decade.
- Reinvestment Rate: Development-focused SWFs typically reinvest at least 50% of their returns into domestic priorities, amplifying local impact.
- Economic Impact: This reinvestment strategy is linked to accelerated GDP growth, infrastructure expansion, and the emergence of new strategic sectors.
Why the Flywheel Matters
- Compounding Effect: Each cycle of investment and reinvestment multiplies the fund’s impact, creating a self-reinforcing engine for economic and strategic growth.
- Strategic Agility: Reinvestment allows sovereigns to pivot capital toward emerging national priorities, from green energy to advanced manufacturing.
- Sovereign Resilience: A well-designed flywheel buffers the economy against shocks by continually upgrading national assets and capabilities.
5. The Way Ahead
I would like to close this article with the exact words that i used from my previous article about the same topic.
I don’t want to sound overly optimistic about it. I’m just offering the blueprint I believe Danantara should follow. We must do the real work. Let’s ditch outdated economic frameworks that have led us nowhere. Let’s move past personal interests, and prioritize the nation’s interest. As a good friend of mine once said: Indonesia never runs out of resources—it runs out of people driven by honesty and integrity. That truth hits hard. I will continue delivering what I know to be true, and I hope someday Indonesia will truly taste what it means to become a developed nation.