The form of Sovereign Wealth Fund (SWF) body regulated at the Omnibus Law for Job Creation, it showed at the draft bill has been seen to the parliament on Wednesday (02/12) - Photo: Special

JAKARTA (TheInsiderStories) – The form of Sovereign Wealth Fund (SWF) body regulated at the Omnibus Law for Job Creation, it showed at the draft bill has been seen to the parliament on Wednesday (02/12). The new entity regulated under article 156 of the law.

Based on the draft, minister of finance will chair the steering board of the new agency with member state own enterprises (SOEs) minister. They have responsibility to proposes the board commissioners and submit the accountability report to the head of state, also determine the initial capital of the investment of the body.

They also provides direction and establishes policies for investment, remuneration of the steering board and commissioners, establishes an annual work plan and budget, along with key performance indicators.

Number of the commissioners at least five people, which is three who came from professional and two ex-officio official with a minimum level of echelon one at the finance ministry and at the SOEs ministry.

Recently, President Joko Widodo, says there is a potential the SWF to manage US$20 billion funds after promulgation. The new entity shortly will establish after parliament approve the omnibus law.

“If this goes out there will be an inflow of $20 billion. I have already reminded BI (Bank Indonesia) and OJK (Financial Service Agency) about this,” he remarked at the Annual Meeting Financial Service Industry on Jan. 16.

The optimism come after government do their effort, approached the potential investors, such as United Arab Emirates (UAE), Japan, Britain, Germany, and United States. State own ministry has appointed to finalize the SWF‘ formation.

Japan’ Softbank Corp., founder Masayoshi Son expressed the commitment during a meeting with President Widodo looking for another investment in the new capital city projects after declared to invest $2 billion in the country in July.

His company has joined a growing list of global investors keen to participate in building a new $34 billion capital in Indonesia. Son, who met the president for the second time in six months, said SoftBank wanted to support the building of a smart and green city loaded with artificial intelligence, although he didn’t say how much his group would invest.

At the same time, CEO IDFC, Adam Boehler and the team said it prepare an investment $5 billion for Indonesia. At the meeting with Widodo, he confirmed, the agency ready to help Indonesia through private capital and committed to improve Indonesian living.

Earlier, coordinating minister for maritime and investment, Luhut Binsar Panjaitan stated, the funds gathered in SWF will utilized for infrastructure projects, including for Indonesia’ new planned capital. He said, UAE participation at the Fund around $6.8 billion.

The minister revealed, the SWF scheme will serve as government-owned private equity that can be used as investment, especially for infrastructure development.

“I approved, will be a form of government-owned private equity. It could serve as national reserves. It can also be used to develop new capital,” he stated.

The SWF will lower the burden of the state budget and accelerate the implementation of projects, he noted. He affirmed that both nations will shortly finalize a plan for the SWF scheme.

Pandjaitan pointed out that the infrastructure project financing scheme using SWF is not something new in the world. Several nations, such as Singapore, India, Egypt, Norway, and China, have adopted the concept.

He assured that the SWF, serving as a pool for financing infrastructure, including those in the new capital, will not encounter a problem.

Talking about the omnibus law, the head of state claimed, the draft will send to parliament next week. He expect in a maximum of 100 government working days the bill will promulgation.

“There are 79 laws in which there are 1,244 articles that we want to revise because we deem it hindering our speed to make changes and it disrupts our economy. We expect a maximum of 100 government working days. I raise two thumbs up if the DPR can finish in 100 days,” said the president.

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