ESTABLISHMENT OF A SOVEREIGN WEALTH FUND THROUGH INVESTMENT MANAGEMENT INSTITUTION IN REALISING OPTIMISATION OF FOREIGN INVESTMENT

Investment can encourage the acceleration of a country's development. Foreign investment improve country's economy either with partial or complete control by the asset owner or depending on international agreements used in determining the scope of investment. However, several factors hinder the entry of foreign investment in Indonesia. To overcome this, government with parliament through Law Number 11 of 2020 concerning Job Creation emphasise the legal politics of forming a quo law-oriented towards improving the investment climate in Indonesia, one of which is the establishment of the Indonesian Sovereign Wealth Fund (SWF) under the name Investment Management Institution or Lembaga Pengelola Investasi (LPI). The purpose of this study is to see how the government's political will in attracting foreign investment is through the establishment of Law Number 11 of 2020 concerning Job Creation and the legitimacy of using the SWF model in the Investment Management Institute (LPI). This research uses a combination of juridical-normative and comparative case study methods. The juridical-normative method is carried out by identifying library materials. Through the comparative case study method, the research will analyse the formation and concept of SWF in India and Russia. This study found that, the LPI plays a vital role in infrastructure financing on national strategic projects and can encourage increasing national foreign exchange. Also, the exact source of institutional funds originates from foreign investors as in the Indian and Russian state mechanisms.

Contested Internationalized Statism in the US

This chapter examines debates about openness towards Sovereign Wealth Fund (SWF) investments in the United States. Although the US is often seen as economically liberal and open, there has been powerful political pressure to restrict overseas investment. Congress has sought increased restrictions on grounds of national security. In contrast, traditionally the executive has favoured openness on grounds of free trade and foreign policy, although recent presidents have also supported greater controls. The outcome of these contending views has been low but directed internationalized statism as the legislative framework has become increasingly restrictive and discriminated against state investment. The case of the US shows the importance of executive and legislative interests and powers in influencing the level and form of internationalized statism. It also points to the need to go beyond labels of ‘liberal’ or ‘statist’ in analysing policies towards overseas states entering domestic financial markets.

Law Enforcement on Indonesian Sovereign Wealth Fund to Strengthen the National Economy

As a new institution in Indonesia, Sovereign Wealth Fund need to be equipped with a solid legal basis and supported by international standard governance. As a form of the Government's commitment to accelerate the operationalization of this Institution, the Government has established 3 (three) legal products related to the Investment Management Agency. The first legal product in Government Regulation (PP) Number 73 of 2020, Government Regulation Number 74 of 2020, and Presidential Decree Number 128/P of 2020 concerning the Establishment of the Selection Committee for the Selection of Candidates for the Sovereign Wealth Fund Supervisory Board from Professional Elements. This research aims to identify two aspects related to the position of Sovereign Wealth Fund in Indonesia and assess whether the existence of the above legal products is a form of law enforcement against Sovereign Wealth Fund in Indonesia with international standards. The study results indicate that the legal position of the Sovereign Wealth Fund (LPI) can be equated with similar institutions that have previously been established, such as State-Owned Enterprises and the Investment Coordinating Board. The regulation of investment management institutions in the work copyright law still has weaknesses, namely from supervision.

Norway’s new government will favour continuity

Significance The Labour, Centre and Socialist Left parties together hold a majority of parliamentary seats. Labour and Centre seem certain to form the core of the government; they might rule as a minority if they cannot bridge disagreements with the more radical Socialist Left over tax and climate policy. Impacts The election represents the best result for anti-EEA parties since Norway’s 1994 vote to reject EU membership. A sustained downturn in global financial markets could reduce the spending resources of Norway’s huge sovereign wealth fund. European demand for Norwegian gas will increase amid rising energy prices across Europe, partially caused by reduced production.

The Optimal Spending Rate versus the Expected Real Return of a Sovereign Wealth Fund

We consider a sovereign wealth fund that invests broadly in the international financial markets. The influx to the fund has stopped. We adopt the life cycle model and demonstrate that the optimal spending rate from the fund is significantly less than the fund’s expected real rate of return. The optimal spending rate ensures that the fund will last “forever”. Spending the expected return will deplete the fund with probability one. Moreover, this strategy is inconsistent with optimal portfolio choice. Our results are contrary to the idea that it is sustainable to spend the expected return of a sovereign wealth fund.

Russia strips dollars from sovereign wealth fund

Significance Russia's sovereign welfare fund will eliminate all its dollar holdings this month. The announcement was timed less than two weeks before Putin's June 16 summit with US President Joe Biden. Impacts The summit outcome will influence investors' geopolitical risk perceptions and affect their valuation of Russian financial assets. Broader de-dollarisation is unlikely as Russians still view the US currency as a safe asset. The rising share of the euro and renminbi reflects the importance of Russia's two leading trading partners.

ANALISA KEBIJAKAN PEMBENTUKAN SOVEREIGN WEALTH FUND DI INDONESIA

Pemerintah Indonesia mendirikan Sovereign Wealth Fund mengikuti jejak negara tetangga Indonesia seperti Malaysia, Singapura, Timor Leste, dan Vietnam. Tujuan pendirian ini adalah untuk menghimpun dana luar negeri yang selanjutnya dikelola untuk pembangunan Indonesia. Penelitian ini secara khusus meneliti bagaimana pendirian SWF ini kelak akan memberikan hasil mengingat saat ini Indonesia telah banyak mengeluarkan berbagai surat utang, menggunakan pendanaan luar negeri untuk pembangunan proyek infrastruktur dan memiliki pasar modal yang dapat dimasuki oleh investor asing dengan mudah. Metode yang digunakan pada penelitian ini adalah studi literatur dan penerapan teori investasi untuk memperkirakan kesempatan investasi yang dapat dimasuki oleh SWF. Metode lain yang juga digunakan adalah menggunakan SWF di negara-negara lain untuk dibandingkan dengan karakteristik SWF Indonesia. Hasil dari penelitian ini adalah SWF Indonesia terutama didanai oleh aset yang dimiliki Indonesia dan kemungkinan akan digunakan untuk mendanai proyek infrastruktur yang belum mendapatkan pendanaan.

Indonesia’s new investment ministry faces headwinds

Significance The government hopes greater domestic and foreign investment can help turn around the pandemic-hit economy. The governor of Bank Indonesia (BI), the central bank, last week said GDP should grow by 4.6% in 2021, compared with last year’s 2.1% contraction. Impacts Indonesia will count on private vaccination, whereby companies buy state-procured jabs for their staff, to help speed up its roll-out. The Indonesia Investment Authority, a new sovereign wealth fund, will prioritise attracting more investment into the infrastructure sector. Singapore will continue to be Indonesia’s largest source of FDI in the short term.

Sovereign Wealth Fund‟s (Swf) Increasing Role as Bank Capital Provider to Indian Banks

In a globalised uni-polar world, the influence of Capital Providers is shifting from Private Actors to that of Public Actors. The role played by government owned investment funds or Sovereign Wealth Funds (SWF) is becoming pronounced and it has crossed $ 8.4 trillion recently in 2021. The paper examines and explains the issue of SWFs with specific reference to its role as a provider of Banking Capital to distressed banks in a stressful situation. The recent case of DBS India’s take over of Lakshmi Vilas Bank is also a case in point. A review of the context and an evaluation of the strategic risks involved with regard to governance, economy, regulation and geo-politics are also flagged with clear evidenced perspectives. The issues raised in the paper has high topical relevance to the world of Money and Finance in general and Banking Capital in particular.

The Privilege of The Indonesia Investment Authority in Indonesia Omnibus Law on Job Creation

Economic globalization has an impact on the dynamics of adjusting the legal rules established in Indonesia. One of them is the legal unification format called the Omnibus Law on Job Creation. The Omnibus Law on Job Creation collects laws related to development and investment. The new thing in this law is the formation of a new institution called the Sovereign Wealth Fund. Various privileges are given to an institution called the Indonesia Investment Authority (IIA), ranging from not being held accountable for a loss to being audited only by a public accountant. This article discusses how laws and regulations build the construction of the Sovereign Wealth Fund Indonesia. The main problem that was analyzed is how the position of the Sovereign Wealth Fund in the structure of the Indonesian state institutions, besides that, it also discusses the issue of the authority and responsibility of the Sovereign Wealth Fund as well as the privileges provided by laws and regulations. All of these issues be the scope of discussion that provide an overview of Indonesia's Sovereign Wealth Fund. The discussion was conducted using a normative juridical method through qualitative analysis using a statutory approach and legal philosophy approach. The inductive conclusion is expected to provide input in strengthening IIA construction so as not to get demands for discriminatory treatment by other state institutions, and the goal of being established by the IIA to accelerate national economic development can be realized. Keywords: Privilege, Indonesia Investment Authority, Omnibus Law on Job Creation, Sovereign Wealth Fund.