Prabowo picks all-star advisory board for controversial wealth fund

From a US billionaire investor and star economist to Ivy League bankers and ex-presidents, Indonesia’s Prabowo Subianto is hoping a ‘dream team’ advisory board will ease sovereign wealth fund jitters.

(L-R) Indonesia's former president Susilo Bambang Yudhoyono, President Prabowo Subianto and former president Joko Widodo attend the launch of a sovereign wealth fund known as Daya Anagata Nusantara, or Danantara, in Jakarta on February 24, 2025. (Photo by BAY ISMOYO / AFP)

Indonesian President Prabowo Subianto has sought to ease widespread concern over his new Danantara sovereign wealth fund by appointing a “dream team” of advisers and counsellors that includes US hedge fund billionaire Ray Dalio, economist Jeffrey Sachs and former billionaire Thai Prime Minister Thaksin Shinawatra.

Ex-Indonesia Presidents Joko Widodo and Susilo Bambang Yudhoyono were also named members of a separate steering committee while more than a dozen corporate executives from the Asian business world have been recruited in managing director positions.

Former British Prime Minister Tony Blair is also reportedly considering an advisory role.

The move appears to borrow from Mr Widodo’s appointment of Blair and Japan’s Soft bank Masayoshi Son to an earlier steering committee for his legacy new capital city project Nusantara which, for all the fanfare, appears to have stalled under his chosen successor.

The latest appointments came as Indonesian stocks took a fresh hammering from markets jittery over the fund’s vulnerability to political influence and the country’s overall fiscal position as Prabowo slashes core spending to fund flagship programs.

Indonesian President Prabowo Subianto (centre) with former presidents Susilo Bambang Yudhoyono (left) and Joko Widodo at the launch of a sovereign wealth fund, known as Danantara, in Jakarta on February 24. Picture: AFP

The value of Indonesian stocks tumbled to their lowest point since August 2021 on Monday, after falling as much as seven per cent in the wake of the Danantara fund’s launch earlier this month, while the rupiah hit a three-week low.

Danantara is expected to eventually manage more than $US900bn ($1.4trn) worth of assets, largely in the form of state-owned enterprises (SOEs) formerly under the umbrella of Indonesia’s finance ministry.

President Prabowo has said he aims to use the fund, including reinvested dividends from the SOEs, to help finance strategic projects — such as natural resource processing, artificial intelligence development and energy and food security — that can drive up economic growth to his promised eight per cent annual target.

But its initial management structure, including a board answerable only to the president and a lack of clarity on auditing, has raised fears over its vulnerability to large-scale corruption and cronyism, such as that which occurred in Malaysia with the 1MDB development fund.

Danantara’s Chief Investment Officer Pandu Sjahrir said the new advisory board would offer guidance on managing the impact of global risks from intensified financial volatility and geopolitical factors, and would have a direct line of communication to Prabowo.

“When these names are received well, it could be a positive signal for the Indonesian economy, job creation,” he said.

Columbia University-based Jeffrey Sachs confirmed to Reuters he had accepted a role as special adviser to the president “and in this capacity (I) will serve on the advisory board of Danantara”. “My work is entirely voluntary, to support Indonesia’s sustainable development, and is without any compensation,” he added.

Mr Dalio, founder of Bridgewater Associates, will also act in an honorary capacity. The 75-year-old talked up the Danantara fund at a recent presidential roundtable with some of Indonesia’s wealthiest magnates, insisting the Southeast Asian nation was at a “takeoff point”.

Bridgewater Associates Ray Dalio at the SOHN Hearts and Minds Conference at the Opera House in Sydney on Friday 22nd November 2019. Picture: Nikki Short

Josua Pardede, chief economist at Indonesia’s Permata bank, told The Australian the new advisers and managing directors — all well-known figures in the global investment world — sent a strong signal about the company’s potential for strong governance that could help turn around negative market perceptions.

While the appointments could not guarantee good management, “the presence of prominent figures in the organisation acts as a deterrent” given any resignations would send a “strong signal to investors that cronyism may be taking place”, he added.

Not all the appointments have sparked confidence, however, with Bhima Yudhistira Adhinegara from Indonesia’s Institute for Development of Economics and Finance describing Thaksin Shinawatra’s inclusion as “problematic” because of previous allegations of corruption and tax evasion against him.