SEAToday.com, Jakarta - UGM (University of Gajah Mada) economist Eddy Junarsin sees the establishment of BPI Danantara as a step toward more transparent and accountable state asset management.

"With Danantara, monitoring by the parent company will be more transparent and effective," Eddy stated, as quoted in Antara, in Yogyakarta on Sunday.

He believes its holding company model will improve coordination and oversight of state-owned enterprises (BUMN), which are currently managed separately by different ministries.

To fully realize the potential of Danantara, Eddy emphasized the need for follow-up actions beyond merely establishing a holding company.

He suggested that Danantara should plan mergers and acquisitions of various state-owned enterprises to improve efficiency and eliminate excessive management layers, enabling greater agility in innovation.

He warned that excessive layers of oversight could hinder BUMN innovation and independence.

He stressed that one of the key expectations from this investment management agency is its ability to mitigate moral hazard, as formalizing oversight through a holding company can ensure greater transparency.

However, while it could contribute to long-term financial stability, its impact on investor confidence requires further study.

"In the short term, its impact may not be significant, but its long-term effectiveness remains uncertain because economic factors are interrelated and highly complex," he noted as quoted on Antara.

Set to become Indonesia’s sovereign wealth fund, Danantara is expected to manage over $900 billion in assets, with an initial $20 billion allocation. Its funds will support sustainable, high-impact projects in renewable energy, manufacturing, downstream industries, and food production.

Writer: Andi Raisa Malaha Thambas