Indonesia's new sovereign wealth fund, Danantara, has drawn public scepticism due to concerns over transparency, accountability and potential conflicts of interest. To regain public trust, Danantara needs to clearly outline its investment guidelines, risk management strategies and governance practices. Danantara would benefit from taking cues from Indonesia's first sovereign wealth fund, the Indonesia Investment Authority, which effectively follows the Santiago Principles — such as ensuring fair competition, independent governance and transparent investment strategies.

The Danantara Anagata Nusantara Investment Management Agency, commonly known as Danantara — Indonesia’s new sovereign wealth fund — has always faced public scrutiny and scepticism. Following its inauguration, the Jakarta Composite Index dropped 7.1 per cent, driven by continuous foreign capital outflows amounting to approximately US$622.7 million.

Among the main concerns is Danantara’s lack of transparency and accountability. It is unclear whether it will be a new engine for development or a victim of political manipulation and corruption. The Indonesian government will need to tread carefully to gain investor and public trust.