Check out new paper from @Kyunghoon_Kim_ on Indonesia's sovereign wealth fund, which I commissioned with @RolandMRajah. The Indonesia Investment Authority is a classic Jokowi initiative, trying to bridge market and state, domestic and foreign investors 1/
lowyinstitute.org
lowyinstitute.org
Like several other Jokowi initiatives, the INA (as it's known) was rushed through with little forethought/planning. But over the last year, the INA has fleshed out a solid corporate governance structure and attracted investor interest from the US, Japan, UAE and China. 2/
Kyunghoon makes helpful suggestions for how the INA can thrive, & avoid the fate of the scandal-hit state investment fund in neighbouring Malaysia: 1MDB. The key question is how INA can balance the need for financial returns against Jokowi's ambitious development objectives. 3/
Broader background is that, as I argued in Man of Contradictions, Jokowi has struggled to reconcile his desire to attract foreign investment with his protectionist instincts. Contradiction between economic nationalism & need for foreign capital has loomed since independence. 4/
While Indonesia had one of world's most stable GDP growth rates pre-Covid, its economic performance has lagged behind other emerging markets in Asia and beyond. The INA came out of the 2020 Omnibus Law on job creation designed to re-energise the economy. 5/
It's still early days for the INA, which will need to build an initial pipeline of successful projects if it is to convert foreign interest into investments. The geopolitical outlook should play in Indonesia's favour, as many outside powers are keen to court Jakarta right now END
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