Jakarta. Senior economist Josua Pardede said Monday that the upcoming sovereign wealth fund Danantara would help generate jobs in the populous Indonesia.

In less than an hour from now, President Prabowo Subianto will launch Danantara, a fund that will manage over $900 billion in state assets. Danantara, which will start with $20 billion in initial capital, is set to invest in sustainable high-impact projects, including renewable energy. Counting down to its official launch, Danantara's establishment has become highly anticipated among Indonesian economists.

"By diversifying its portfolio on greenfield and brownfield investments as well as strategic acquisition, I think Danantara can drive sustainable economic growth and create jobs for the people," Josua told the state-run news agency Antara.

Indonesia might be able to attract more foreign direct investment (FDI) by having Danantara teaming up with global institutions as co-investors. This will translate into quality job creation and development of the country's key sectors, including export-oriented industries, according to Josua.

Danantara will become both an investment vehicle and a super holding for Indonesia's state-owned enterprises (SOEs).

"With investment leverage of up to 10 times the dividends of Indonesia's SOEs, Danantara has the potential to mobilize significant capital for strategic projects," Josua said.

Despite its many economic benefits, Indonesia needs to watch out for the risks. The uncertainty surrounding its launch might affect investors' trust in the Indonesian capital market. The public might also be concerned about the body's transparency and political independence.

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