Indonesia to create sovereign wealth fund based on Russian model
An initiative to establish the wealth fund was earlier unveiled by Indonesian President Joko Widodo during his visit to the United Arab Emirates (UAE), according to a top ministry official cited by the Jakarta Post. It is expected that the fund could attract at least $20 billion in foreign investment, and some countries have reportedly shown interest in financing the project.
The new sovereign fund won't be like similar structures in Norway or the US, which use it for investing in overseas projects. Instead, the body hopes to raise the necessary funds from private investors, SOE Deputy Minister Kartika Wirjoatmodjo explained.
"In countries with budget surpluses, the sovereign fund is used to invest in overseas projects, but ours will be similar to the Russian Direct Investment Fund (RDIF) and will be used as a catalyst for attracting direct investment into the country," he said on the sidelines of the Mandiri Investment Forum 2020 in Jakarta earlier this month.
He added that the fund will attract both anchor investors and co-investors to finance projects in a wide range of fields, such as infrastructure, energy and resources, healthcare, tourism and technology. It may also be used to finance recycling projects in the future.
The RDIF was created in 2011 to make direct investments in leading and promising Russian companies, acting as a catalyst for direct investment in Russia. The fund has invested 1.7 trillion rubles (around $26 billion) in the Russian economy, of which 1.6 trillion rubles ($25 billion) came from co-investors, partners and banks.
For more stories on economy & finance visit RT's business section