In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia¡¯s finances.
The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new state entity under sovereign wealth fund Danantara to oversee Indonesia¡¯s world-leading exports of palm oil, coal and ferro-alloys, which together amounted to more than $65 billion last year.
Prabowo had long railed against Indonesia¡¯s tycoons, accusing them of harnessing national wealth for personal gain. He believed drastic action was needed to plug leakages that cost Indonesia billions of dollars a year, according to people familiar with the inner workings of the president¡¯s office. They requested anonymity to speak about private discussions, along with about a dozen others in government and industry circles who contributed to this account.
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