Indonesia is preparing to set up a sovereign
wealth fund with an initial equity of about $5 billion, which would be aimed to
attract $15 billion in funds for investment, its finance minister said in a
news conference on Wednesday.
The government would inject up to 30 trillion
rupiah ($2.04 billion) in cash for its equity and add other assets, including
stakes in state companies that would in total reach 75 trillion rupiah or $5
billion, Minister Sri Mulyani Indrawati said.
The government would leverage that to attract
funds for investment totalling $15 bilion, she said.
"The model of this sovereign wealth fund
is a combination of development fund and stabilisation fund and we would use
international sovereign wealth fund models as the standards for best
practice," she said, adding that formally it would be called "Investment
The formation of the fund follows the passage
of President Joko Widodo's sweeping "Job Creation" bill into law this
week. The law calls for a new institution with the authority to manage state
Sri Mulyani said the president had requested
for supporting regulations for this to be made ready within a week.
The fund would be managed by professionals in
its executive board and government ministers would sit in the supervisory
board, she said.
"We hope we can get reputable strategic
partners so we can develop these assets to attract investment better," she
The jobs law has drawn criticism for its
provisions on labour reforms and changes to land and environmental rules, with
thousands of workers and students protesting in multiple cities on Tuesday and
Wednesday as part of a three-day national strike.