Former Indonesian Central Bank (BI), Burhanuddin Abdullah, perceives that the Daya Anagata Nusantara (BPI Danantara) is the answer to the problem of low foreign investment in the country.
Danantara is designed to serve as the primary superholding agency for state-owned enterprises (SOEs). It is positioned to manage and leverage state assets for long-term value, redefining SOE management and limiting the role of the SOEs minister in the process.
Burhanuddin cited the low average Foreign Direct Investment (FDI) in Indonesia of only US$100 per capita, much smaller than neighboring countries, such as Vietnam and Singapore.
“Indonesia until today is not a country that is of interest to foreign investors. Since its independence, the average foreign investment in Indonesia has not exceeded US$100 per capita,” Burhanuddin told a discussion themed Danantara’s Role in Accelerating Indonesia’s Development broadcast on Wednesday, February 5, 2025.
Burhanuddin, who chaired the Board of Experts of the Prabowo Subianto-Gibran Rakabuming Raka’s 2024 Election Team, compared Indonesia’s investment conditions with Vietnam, which only started developing in the 1990s, but has attracted foreign investment of US$400 per capita. Meanwhile, Singapore is far superior with almost US$2 million per capita.
“So it is rather difficult for foreign investment to enter Indonesia,” he said.
Investment barriers
Burhanuddin assessed that the low interest of foreign investors was due to regulatory uncertainty in Indonesia. He highlighted that investment regulations often change depending on the leadership in power, making investors hesitant to invest their capital.
“It is perhaps because our house has not been arranged cleanly, neatly and well-planned. We often change the rules or because of many unpleasant things, such as ‘rats’ in the house, so that foreign investment is reluctant to enter,” he said.
Burhanuddin, who was one of the initiators of the superholding agency, said that Danantara would become a superholding for SOEs to attract more investment into the country.
Danantara was officially established after the SOEs bill was passed into Law in the Plenary Session of the House of Representatives (DPR), on Tuesday, February 2, 2025.
Burhanuddin emphasized that this agency aims to consolidate SOEs assets to be stronger and more competitive in the global market.
“That’s why we think about how we try to consolidate what we have. We consolidate, we leverage, and we have a fairly large SOEs. With this, we hope that SOEs can grow and develop very healthily,” he said.
