CORE States Governance Determines Success of DSI

The Executive Director of the Centre of Reform on Economics (CORE) Indonesia, Mohammad Faisal, believes that the formation of Danantara Sumber Daya Indonesia (DSI) has the potential to increase economic value-add and state revenue. However, these benefits can only be achieved if supported by mature institutional design, adequate preparation, and strong governance.

“The success and utility of DSI do not solely depend on its objectives, such as increasing economic value-add or enhancing state revenue,” Faisal stated when contacted in Jakarta on Tuesday (2/6/202le).

According to Faisal, the fundamental purpose of establishing DSI is not the primary issue. The greatest challenge lies in the implementation phase, which will determine whether the institution can provide added value or instead create new problems. He noted that the expected benefits of DSI can only materialise if all technical aspects of its execution are meticulously designed and supported by good governance.

“Success and the resulting positive impact depend on the design, sufficient preparation, rigour, and ultimately, the issue of good governance,” said Faisal.

Faisal believes that current attention should be directed towards institutional design, implementation readiness, feasibility, and the quality of human resources that will manage DSI. “This is the actual concern; it is not about the objectives at a high level, but about the technical level and good governance, which must prove that this will truly provide added value rather than creating a new problem,” he added.

He warned that good intentions will not yield optimal results if preparations are rushed. In his view, weaknesses in planning and execution could potentially create loopholes that harm businesses and investors.

“From an objective standpoint, it is good, but if the preparation is not mature, many loopholes may arise, even creating problems for private actors and investors,” he said.

In addition to design and governance, Faisal also highlighted the timing of the policy implementation. He noted that DSI is being implemented at a time when there are various concerns regarding the national investment climate. “Furthermore, there is the issue of timing, because from the current condition, we can see many concerns regarding the investment climate in Indonesia. This timing is actually very risky,” Faisal concluded.