Sovereign wealth funds (SWFs) have existed for many decades around the world. By establishing a SWF – and inject capital into the SWF – governments can strengthen their national economies and generate wealth for future generations. In fact, a SWF is essentially a state-owned investment fund typically funded using excess capital.
A SWF can invest in a range of investment instruments. Usually, however, its funds go into government bonds, equities and direct investment. More recently, SWFs have added private equity and hedge funds to the list.
Over the last couple of decades, the size and number of SWFs have grown drastically. According to the SWF Institute, a global corporation, there were more than 90 SWFs with combined assets amounting to nearly USD $8.2 trillion dollars in 2020.
Per mid-February 2021, Indonesia now finally has its own SWF, called the Indonesia Investment Authority (abbreviated: INA). And, while some assume that the COVID-19 crisis has sped up the decision to establish this SWF, it is important to mention that talks about an Indonesian SWF had been going on much longer. In fact, the legal basis for INA is set in the country’s Omnibus Law on Job Creation that was passed by the House of Representatives (or DPR) in October 2020, but started being designed prior to the global COVID-19 pandemic.
The full article is available in the February 2021 edition of our monthly report. This report can be ordered by sending an email to firstname.lastname@example.org or a message to +62.882.9875.1125 (including WhatsApp).
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Poll Indonesia Investments
Your Opinion About the Indonesian Government's COVID-19 Strategies (PEN, PSBB/PPKM, Vaccines)?
Voting possible: -
- The government should do more to combat the crisis (31.9%)
- No opinion (29%)
- The government's policy approach is good enough (16.8%)
- The gov't did too much, thereby damaging the economy (15.3%)
- Raising capacity in the health industry is enough (7%)
Total amount of votes: 589