Jakarta.  The freshly established sovereign wealth fund Danantara will make sure that the consolidation process of state-owned enterprises will not affect its employees, according to its chief operating officer Dony Oskaria. 

President Prabowo Subianto recently established Danantara which would manage assets of government-run businesses. It will eventually have over $900 billion in assets under management. Danantara will start with seven state businesses, namely: electricity firm PLN; oil and gas company Pertamina; banks Mandiri, BNI, and BRI; mining holding MIND ID; and telco giant Telkom. Dony admitted that Danantara’s establishment would lead to the closure of several companies. However, it will prioritize its workers’ welfare. 

"We will carry out consolidation, either by closing unhealthy companies or merging them with other more stable companies. What is important is that employees are still saved in accordance with President Prabowo's orders," Dony told the BNI Investor Daily Roundtable forum in Jakarta on Thursday. 

According to Dony, Danantara will consolidate companies that are no longer competitive.

“Only companies that are [financially] healthy and highly competitive will continue to operate. Those that are unable to survive will be consolidated so as not to burden the state," he said. 

Easier Consolidation Process

The government had to wait for amendments to the state-owned enterprise law before it could officially launch Danantara. The amended law finally secured parliamentary approval earlier this month. 

According to Dony, the amended law would make the consolidation process much easier. Previously, state-run enterprises only have the power to manage, while its ownership remains at the hands of the finance minister. This has set various obstacles in the merger and closure processes. This caused the closure of companies to take years.

The revised law makes ownership of state-owned enterprises clearer as they will solely be managed by a single main entity: Danantara.