One Year of Danantara: An Evaluation of the Reform in the Management of State-Owned Enterprises
A. Introduction
On 24 February 2026, the Daya Anagata Nusantara Investment Management Agency (BPI Danantara) entered its first year since its official inauguration by President Prabowo Subianto.[1] This moment marked an important milestone in the reform journey of state-owned enterprises (BUMN) governance in Indonesia. In many respects, this step can be seen as one of the most significant reforms in BUMN governance since Indonesia’s independence.
The reform went beyond merely renaming the agency or restructuring its administrative framework. More than that, the reform represents a renewal in the design of law and public policy aimed at separating more clearly the government’s role as regulator from its role as owner of capital or shareholder of BUMN.
Over the past year, Indonesia has begun a transition that is not straightforward. The state asset management system, formerly heavily reliant on a ministerial bureaucratic approach, is being directed toward a more integrated superholding and Sovereign Wealth Fund (SWF) model. This new approach is designed so that state asset management becomes more professional, more disciplined, and oriented toward long-term investment strategy. Through this model, the government hopes that BUMN can become an important instrument to strengthen Indonesia’s position on the global economic map. [2]
The need for such transformation arose from an extended evaluation of a range of issues that for years have shadowed the BUMN sector, particularly regarding efficiency. Before Danantara’s emergence, the management of strategic state assets was dispersed across various technical ministries or under the coordination of the Ministry of State-Owned Enterprises. This condition often led to fragmented management and not fully coordinated. On one hand, BUMN were required to fulfil public service obligations (Public Service Obligation), but on the other hand they were also expected to generate commercial profits.
Danantara’s presence is intended to address these problems by presenting a single investment control centre that is more integrated. Through this approach, the government hopes asset management of the state can be conducted more strategically, from optimising BUMN dividends, restructuring underperforming companies, to accelerating the downstream agenda of national industry which is a priority of economic development. [3]
With a projected total AUM (Asset Under Management) of around US$900 billion, Danantara is designed as one of the new state investment powers. This scale places it on par with large global corporations on the Fortune 500 list, and approaches models of state investment bodies that have previously developed, such as Temasek Holdings in Singapore. [4]
However, as a reform of governance that is fairly fundamental, the year-long journey of Danantara has also prompted intense legal and policy debates. The regulatory framework changes through Law Number 1 of 2025 on the Third Amendment to Law Number 19 of 2003 on State-Owned Enterprises and Law Number 16 of 2025 on the Fourth Amendment to Law Number 19 of 2003 on State-Owned Enterprises triggered a number of debates, especially regarding the limits of legal protection for the managers of the institution, the status of separated state assets, and potential fiscal risks arising from changes to the mechanism of distributing BUMN dividends that previously went directly into the state treasury. [5]
In this context, evaluation of the Danantara year journey becomes important. This evaluation aims not only to assess the extent to which the policy has been implemented, but also to identify various juridical and operational challenges that arise in practice. In addition, the evaluation also seeks to assess the initial impact of the reform on the performance of BUMN, thereby providing a more complete picture of the policy’s effectiveness in the first year of implementation.
B. Dynamics of Regulatory Change
The legal basis for the establishment of Danantara stems from a highly dynamic legislative process, reflecting the government’s effort to create legal certainty amid the complexities of state corporate law. The main legal basis begins with Law Number 1 of 2025 on the Third Amendment to Law Number 19 of 2003 on State-Owned Enterprises. This law explicitly introduces the concept of a “Body” as an entity entrusted with delegated authority from the President to manage investments and assets of BUMN. [6]
Legislative Dynamics: From Law 1/2025 to Law 16/2025
In the initial phase, Law 1/2025 faced serious challenges in terms of accountability and alignment with Indonesia’s anti-corruption legal regime. Provisions in Articles 3X and 3Y of Law 1/2025, which at one point stated that the body’s organs and employees are not state administrators and granted conditional legal immunity, raised concerns about potential “structured impunity.” Responding to broad public criticism and a constitutional court material review in Case No. 44/PUU-XXIII/2025, lawmakers took corrective steps by enacting Law Number 16 of 2025. [7]
Law 16/2025 brought substantial changes that reinstated Good Corporate Governance principles into the Danantara ecosystem. The provisions that previously exempted the status of state administrators were removed and replaced with obligations for all Danantara organs to comply with laws and regulations governing transparent business and governance. This change is crucial because, legally, it asserts that although Danantara possesses operational flexibility akin to a private corporation, it …