• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Friday, May 9
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025

    Federal Reserve Holds Interest Rates Steady Despite Pressure From Trump

    May 7, 2025

    ‘Wait Them Out’: John Kennedy Tells Larry Kudlow One Lie He Suspects China’s Telling US

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Why Sovereign Wealth Funds Are All the Rage in Southeast Asia
Finance

Why Sovereign Wealth Funds Are All the Rage in Southeast Asia

February 19, 2025No Comments5 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Why Sovereign Wealth Funds Are All the Rage in Southeast Asia
Share
Facebook Twitter LinkedIn Pinterest Email

Indonesia recently passed legislation paving the way for the creation of a new state-owned investment fund called Danantara. This follows the creation of another state-owned investment fund, the Indonesia Investment Authority, or INA, during the Jokowi administration. The INA has been in operation for several years, mobilizing investment in various priority sectors like logistics and toll roads.

Not to be outdone, the Philippines created its own state-owned investment vehicle, the Maharlika Wealth Fund. After a few years of figuring out key details, such as how it would be structured and funded, Maharlika is now operational and preparing to make its first investment later this year.

State-owned investment funds are not new in Southeast Asia. Singapore’s Temasek has been around since the 1970s and manages a portfolio worth hundreds of billions of dollars. State-owned investment funds have also been a staple of Malaysia’s economy for many decades, and are being primed to play a more active role in driving investment in the years ahead.

What’s interesting about the proliferation of new funds is that they are being created in countries where we would not typically expect to see them, like Indonesia and the Philippines. In recent years, these countries have generally run deficits in their current accounts meaning they import more goods and services than they sell to the rest of the world, and receive more capital inflows as well. (The COVID-19 pandemic shifted this pattern a little thanks to booming commodity exports, but it looks like Indonesia’s current account shifted back to deficit in 2024).

Malaysia and Singapore, on the other hand, have historically been surplus countries. This has allowed them to accumulate large foreign exchange reserves, and sovereign wealth funds like Temasek and Khazanah were created in order to reinvest these assets and manage them in the public interest. This is common with net exporting countries like Norway or the UAE which also have sovereign wealth funds.

See also  T Stock: AT&T Fires Back In Lead-Sheathed Cabling Issue, Telecom Stocks Climb

Because Indonesia and the Philippines can be thought of as net debtor countries, it is harder for them to accumulate reserves through exports. In the absence of such reserves, the natural question is how will they fund their sovereign wealth funds? What, exactly, is the source of the wealth that these funds will be managing?

Although Indonesia does not have vast foreign exchange reserves, it does have other forms of state-owned assets including ownership of very profitable state-owned banks. What Indonesia did to fund the INA was to seed it with about $1 billion in cash and then transfer shares to two of the most profitable state-owned banks. This actually gives the INA a pretty sound capital structure, despite not being funded in the way a typical sovereign wealth fund would be.

For Danantara, the details remain murky. It seems the state has enacted sharp budget cuts to reallocate billions of dollars in fiscal savings to the new investment fund. It will also take direct control of some of Indonesia’s biggest state-owned companies. To be honest, it is very unclear exactly how all of this will work but it shows that the Indonesian government is doubling down on its desire to leverage state-owned financial resources in order to drive investment in some way.

In the Philippines, the Maharlika Fund is preparing to make its first investment this year, and it traveled a long road to get here. The Philippines not only lacks large foreign exchange reserves, it also has fewer state-owned companies that could be used as a capital base for an investment fund. The Maharlika fund therefore went through several iterations including plans to tap a public pension fund, before settling on a somewhat similar arrangement as the INA wherein a pair of state-owned development banks will help capitalize the fund. The central bank and government will also contribute.

See also  Goldman Sachs created Louisa, AI-powered social media startup

There has been a lot of resistance to this idea, and the basic premise is indeed a little hard to parse given that unlike Indonesia, state-owned banks in the Philippines are not big cashflow machines. The government is already facing steep fiscal deficits, with borrowing in the Philippines as a percentage of GDP projected to be notably higher than Indonesia in 2025. That the government has pushed this plan forward despite these obstacles shows just how far this idea that the state should play an active role in capital markets and investment has penetrated the region.

With most of these new funds only just starting, or still in a nascent phase of development like Danatara, it’s too early to say much about how they operate or whether they are effective. What it definitely tells us, however, is that broadly speaking the state’s role in the economy is shifting in the region. Like it or not states are increasingly inserting themselves into markets throughout Southeast Asia and playing a more assertive role as active participants. We see it in industrial policy and trade and now, with the upsurge in state-owned investment funds, we are seeing it in financial and capital markets.

Asia funds Rage Southeast Sovereign Wealth
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025

How China’s Companies Are Responding to the US Trade War

April 16, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

UK Forest Holidays – Your Guide To Embracing Natures Playground

December 21, 2023

Housing Costs Surge In July, Accounting For 90% Of Total Inflation

August 14, 2024

Indonesia, Apple Agree Terms For Lifting iPhone Sales Ban: Report

February 26, 2025

A List Of Outdoor Games For Your Community Festival 

November 6, 2024
Don't Miss

Trump Announces First Post-Tariff Trade Deal

Business May 8, 2025

President Donald Trump announced Thursday the U.S. has reached a trade agreement with the U.K.,…

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025

Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

May 7, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,110)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,626)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Healthcare Incentives Have Gone Wrong. Can Crypto, DAOs, NFTs Fix Them

May 22, 2023

Former NYC Mayor Bill De Blasio Spotted Out With Female Staffer

August 13, 2023

Leftists are Furious that Google Didn’t Delete Abortion Clinic Visits Despite Promising to

May 10, 2023
Popular Posts

Trump Announces First Post-Tariff Trade Deal

May 8, 2025

100 Funny Father’s Day Quotes for Hilariously Relatable Humor (and Plenty of Love Too)

May 8, 2025

Top 10 Benefits Of Acupuncture

May 8, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.