Indonesia will have an Investment Management Institution or a Sofereign Wealth Fund called the Indonesia Investment Authority (INA) earlier this year. President Joko Widodo confirmed that the government will deposit Rp 15 trillion in cash capital and Rp 50 trillion worth of BUMN shares to the institution. "I was also whispering with the Minister of Finance, what is the investment target that will enter INA within 1-2 months of this institution being established? About US $ 20 billion was answered, this is a huge fund," said Jokowi at the Annual Meeting. Financial services industry 2021 via streaming video, Friday (15/1).
Currently, according to Jokowi, the names of candidates for the supervisory board of the Indonesia Investment Authority have been submitted to the DPR. The appointment of the supervisory board will take place next week. The LPI supervisory board consists of Minister of Finance Sri Mulyani Indrawati, Minister of State-Owned Enterprises Erick Thohir, and three members from professional circles. The three candidates for the supervisory board have gone through a fit and proper test by the selection committee which will be followed by consultations at the DPR. After the supervisory board is established, several committees will be formed, among others, to elect a board of directors of five professionals.
Jokowi hopes that the LPI can become a strong investment strategic partner legally and institutionally. This institution is also expected to be reliable and trusted to promote sustainable development. On the same occasion, Chairman of the OJK Board of Commissioners Wimboh Santoso confirmed his support for the institution. This is done by providing a sovereign rating in the calculation of risk-based capital if a financial service institution buys securities issued by LPI. LPI was formed based on the Job Creation Law, which aims to increase and optimize the value of long-term assets in order to support sustainable development. This institution is similar to but not the same as the Government of Singapore Investment Corporation, the Norwegian Oil Fund, the National Khazanah owned by Malaysia, and the Russian Direct Investment Fund.
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said that the LPI has the potential to attract more foreign investment so that it can optimize state and BUMN assets. This is expected to be able to encourage faster economic development and growth. "The BUMN has around US $ 600 billion in assets. Now it is being mapped and which assets can be included in the LPI," Luhut said when chatting via video streaming on Dahlan Iskan's Youtube account in November 2020.
Luhut is optimistic that BUMN assets can be leveraged up to three times if later managed by LPI. The management of BUMN under the LPI, according to him, can encourage company management to be more professional. "The valuation is expected to increase. Say that next year the managed LPI can reach US $ 30 billion (equivalent to Rp 428 trillion)," said Luhut. In the PP LPI it is explained that LPI capital can be in the form of state capital participation and other sources. PMN can include, among others, state-owned goods and BMN assets. However, the transfer of state assets to the property of the LPI does not include the management of important production branches and the management of land, water and natural resources contained therein. LPI will invite foreign funds through equity participation. In the early stages, this institution will offer projects in the infrastructure sector such as toll roads, airports and ports. Of course, the projects offered are those that provide good investment returns.
