Indonesia to Establish Sovereign Wealth Fund Soon

JAKARTA, KOMPAS.com – The government has targeted to set up the sovereign wealth fund Indonesia Investment Authority (LPI) in early 2021, making it necessary to begin the selection process for key positions in its board soon.

Finance Ministry state assets director-general Isa Rachmatarwata said the target is for the LPI selection process to be done this month.

Isa said that LPI’s supervisory board will comprise five members. Based on the newly-signed Job Creation Law, two of the supervisory board members include the Minister of Finance and Minister of State-Owned Enterprises. The other three will be from the community of professional board members.

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“Three members are the representation of the professional community, who will be appointed by the President [Joko Widodo] through a selection process carried out by the Minister of Finance and Minister of State-Owned Enterprises and other parties,” Isa said in a virtual discussion on Friday, November 20.

The candidates will also need to get approval from the House of Representatives, he added.
“Based on Law, the President will consult with the House of Representatives whether the candidates are acceptable or not,” he said.

The selection process will take place after the law’s derivative regulation in the form of government regulation on LPI is established. The derivative regulation is currently being finalized and will soon be presented to the President, he added.

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“We have conducted committee meetings with relevant ministries. We should submit it to the President within a few days,” said Isa.

Once LPI’s supervisory board is established, the members will then appoint five members for the board of directors, who will be represented by the professional community.

The establishment of LPI aims to manage the investment, which is expected to obtain about $15 billion, up from the institution's initial funds of $5 billion prepared by the government.

(Writer: Yohana Artha Uly | Editor: Bambang P. Jatmiko)

Source: https://money.kompas.com/read/2020/11/20/154451526/lembaga-pengelola-investasi-segera-dibentuk-seleksi-dewan-pengawas-akan.