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Indonesia eyes US$50 billion a year from Danantara’s asset returns

Jakarta (ANTARA) – President Prabowo Subianto has set a target for Danantara Indonesia to contribute at least $50 billion, or about 800 trillion rupiah, to the state each year.Speaking at an event marking Danantara's first anniversary in Jakarta on Wednesday, the president said that the contribution target is based on an expected 5 percent return on assets (ROA) from all assets held by Danantara.He added that a well-managed company can generate a minimum annual ROA of 10 percent. Still, he is currently expecting only 5 percent from Danantara, as the company has been operating for just one year.”We understand that in its early years, it may be difficult to achieve. However, if we set the ROA target at 5 percent, it means that Danantara must contribute US$50 billion, or Rp800 trillion, each year,” Prabowo stated.He said that Danantara must establish a long-term target to improve the management of state assets, as the sovereign wealth fund is expected to deliver a 10–15 percent ROA annually in the future.Commending Danantara's performance in its first year, the president nonetheless reminded the management that many challenges still lie ahead.”I remind you that there is still a long way to go. You must deliver, at a minimum, 5 percent ROA to the nation. A minimum of US$50 billion,” he stated, directing his remarks at Danantara executives.The president had earlier said Danantara had shown a strong performance, with ROA rising by more than 300 percent in its first year, noting that the achievement reflected the full potential of state-owned enterprises when professionally managed.The Indonesian government established Danantara as a strategic step to consolidate state assets and state-owned companies to optimize its potential in providing greater added value for the national economy.