Siwage Dharma Negara and Leo Suryadinata – Like some of his predecessors, President Prabowo has co-opted Indonesia's tycoons to contribute to a new bond fund. To what end?
Indonesia's sovereign investment vehicle, Danantara, has pulled off a high-profile domestic fundraising round, amounting to IDR51.75 trillion (US$3 billion), to support national strategic programmes. The so-called 'Patriot' bond, which represents a more formalised version of Indonesia's long-standing state business model, was quickly taken up by many Indonesian conglomerates.
Danantara's mobilisation of elite private capital to support future and ongoing state projects takes a leaf from previous administrations. In the New Order, then President Suharto asked some conglomerates to transfer one per cent of their share capital to farmers and cooperatives. Former president Joko Widodo (Jokowi) asked Indonesian conglomerates to contribute to the construction of Nusantara, the planned new capital city that was his pet project.
For decades, Indonesia's political economy has been structured around a complex relationship of state – business patronage, in which ruling political figures or coalitions mobilise business elites to secure political stability and finance strategic agendas. Danantara's Patriot bond represents a more contemporary and formalised mechanism: it offers an interest rate of just two per cent annum for five- and seven-year tenors. This rate is significantly lower than Bank Indonesia's benchmark interest rate (around 5.8 per cent) and government bonds (around 6.1 per cent).
An unverified list circulated online identified 46 Indonesian tycoons who had allegedly subscribed to the bond issue. Many are heads of major Chinese Indonesian business groups. The list quickly attracted public attention and was reported by major media outlets. Danantara's CEO, Rosan Roeslani, confirmed that the bond's initial launch was fully subscribed and said the US$3 billion collected would be used to finance a national waste-to-energy project, but did not disclose the names of the investors; he neither confirmed nor denied the list.
To recall, Danantara was established in February 2025 by President Prabowo Subianto. It is styled after Singapore's Temasek Holdings; Danantara has been tasked to mobilise domestic capital to finance various national strategic projects without relying on foreign borrowing. Although Danantara reportedly holds substantial capital commitments from state-owned enterprises (SOEs) amounting to US$1 trillion, it is seeking additional funding through initiatives like the Patriot bond.
It is not known why Danantara specifically sought additional financing in the form of the Patriot bond, which amounts to just 0.3 per cent of US$1 trillion, but this bond issue raises questions regarding capital liquidity, governance structures and disbursement capacity. It also suggests that business elite co-financing might be an embedded feature of Danantara's institutional design.
The bond's subscriber list, if accurate, offers interesting insights into Prabowo's dynamic relationship with key conglomerates. According to the purported list, 40 of the 46 subscribers are Chinese Indonesian tycoons, underscoring this group's continued dominance in Indonesia's economy. Mentioned are the heads of all the major Chinese Indonesian conglomerates, including Anthoni Salim, Prajogo Pangestu, James Riady, Sugianto Kusuma (alias 'Aguan'), Tommy Winata, Franky Widjaja, Budi Hartono, Dato Tahir, and Low Tuck Kwong – collectively, they are colloquially known as the 'Nine Dragons'. Each tycoon or conglomerate reportedly contributed around IDR3 trillion (US$180 million); some of these figures were key players from the Suharto era through to the Jokowi era.
For the tycoons, their participation as 'patriots' preserves their privileged access to the sitting administration.
If this list is true, President Prabowo is using the same state-business patronage model as some of his predecessors. In March 2025, he met seven of the 'Nine Dragon' tycoons at the presidential palace to ask them to help build Indonesia. In that meeting, the president addressed several of his priority policies, including free nutritious meals (MBG), the construction of three million homes for the people, and Danantara. The president encouraged these conglomerates to contribute to Indonesia's development and political stability, citing external uncertainty which required a united response from the government and businesses.
It is likely that the Chinese Indonesian tycoons felt compelled to support Prabowo and Danantara. In such a case, the role of Chinese Indonesian conglomerates reflects what Australian scholar Richard Robison referred to as cronies or "cukong". (Editor's note: Some may regard this as a derogatory term.) Successive Indonesian governments have relied on cukong to support politically strategic projects through financial contributions, dispensing political goodwill and protection in return for these "contributions".
Unlike previous administrations, the current government seems to be more sophisticated in managing its relations with the tycoons. The structuring of financial instruments such as the Patriot bond is a case in point. Arguably, the government can fund its strategic projects through other means, including foreign borrowing, fiscal budgets, raising taxes, or mobilising domestic elites' capital. The Patriot Bond arrangement provides a more pragmatic solution: it serves to quickly mobilise capital with arguably minimum political risk compared to the other options. For the state, pooling capital from the conglomerates is politically less risky (and less costly in terms of interest rates) than issuing sovereign bonds to foreign markets or raising public debt levels.
For the tycoons, their participation as 'patriots' preserves their privileged access to the sitting administration. In effect, the Patriot bond functions like a soft, domestically sourced credit channel wrapped in nationalist symbolism. It reaffirms how Indonesia's development trajectory continues to combine market instruments with elite-driven crony capitalism.
[Siwage Dharma Negara is Senior Fellow and Co-coordinator of the Indonesia Studies Programme, and the Coordinator of the APEC Study Centre, ISEAS – Yusof Ishak Institute. Leo Suryadinata is a Visiting Senior Fellow, ISEAS – Yusof Ishak Institute and Professor (Adj.) at S. Rajaratnam School of International Studies at NTU. He was formerly Director of the Chinese Heritage Centre, NTU.]
Source: https://fulcrum.sg/indonesias-tycoons-pressed-into-national-service-once-again