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1MDB Scandal Casts Pall Over Indonesia Wealth Fund Ambitions

  • Fund aims to raise $16 billion, start operations next year
  • Previous corruption cases may taint bid to lure investors
Jakarta Skyline and Infrastructure Ahead Of Indonesian GDP Figures
Photographer: Dimas Ardian/Bloomberg
Updated on

Indonesia will need to step out of the shadows of neighboring Malaysia’s 1MDB scandal to convince investors that its new wealth fund won’t fall prey to corruption.

Nusantara Investment Authority will take lessons from other sovereign wealth funds and adopt a framework based on independence, transparency and accountability, said Isa Rachmatarwata, the finance ministry’s director general of state assets. It needs to assure potential investors that governance protocols are airtight when it starts operations in the second half of 2021, as the fallout from the 1MDB scandal has heightened scrutiny on emerging-market wealth funds.