The year 2020 was a watershed for geopolitics as the world watched the UAE and Bahrain normalize relationships with Israel under the US-brokered Abraham Accords. Announcements on Kosovo, Sudan and Morocco, signaled the beginning of broader Israeli integration into the Arab world. 

The world and the Middle East, in particular, has gone through the wringer since, plagued with disrupted supply chains, the Gaza conflict, and centennial high trade tariffs. Furthermore, rising nationalism, deep ideological divides and power shifts have left the world reeling.  

Hence, what was billed as the beginning of transcontinental trade corridors, mending of schisms and greater financial and economic integration has instead been marked by a hardening of positions, fueled by Israel’s war and conduct in Gaza and the indiscriminate attack on several Middle Eastern countries.  

Fruits of labour 
The Abraham Accords were inked with a new beat of hope and integration with the establishment of several forums and pacts. The UAE-Israel comprehensive economic partnership agreement - the largest between Israel and any Arab country - was arguably the most prominent, seeking to boost bilateral trade to over $10 billion over five years.

“The past five years have demonstrated the tangible benefits of peace. Trade between Israel and the UAE reached over $3.2 billion in goods last year, not including government-to-government transactions or software and services. Investments have surpassed $5 billion, and more than two million Israelis have travelled to the UAE since normalization,” said Amir Hayek, the first Israeli ambassador to the UAE, in an article published in the Atlantic Council’s September issue brief.  

“These are not abstract statistics; they represent millions of human interactions and billions of dollars driving growth on both sides,” added Hayek.

The Negev Forum was another initiative, convening Bahrain, Egypt, Morocco, the UAE, the US, and Israel, on matters of regional security and economic cooperation. The UAE, US, India and Israel created the I2U2 Group in 2022, focusing on joint investments and new initiatives followed by the development of the India-Middle East-Europe Economic Corridor (IMEC) a year later. 

Accumulated trade between Israel and the Abraham Accord countries, including the UAE, Bahrain, Morocco, Sudan, Egypt, Jordan and Kosovo, exceeded $4 billion in 2023, up 16% on 2022, the Abraham Accords Peace Institute (AAPI) said in its 2023 Annual Report. 

…..remain shrouded in doubt
However, the Gaza war has put most of those initiatives under a shadow of doubt. 

“The Abraham Accords have survived, but they have changed [in] nature. So, the Abraham Accords are no longer a peace project. They have become a security and resilience framework,” said Ilan D. Scialom, director of strategy, Zalis & European Observatory of the Abraham Accords, during a webinar hosted by the New Lines Institute for Strategy and Policy.  

“You can’t stabilize regional economies while Gaza keeps burning every two years. Peace without Palestine narrative is bankrupt” he added. “We are entering what I call Abraham Accords 2.0 – not a sequel but a recalibration.” 

Is the future in the balance?
New countries keen or even agreeing to join the Abraham Accords is on the cards. Kazakhstan has agreed in principle to join last month, becoming the first country in US President Donald Trump’s second term to do so. 

Sir Liam Fox, Chairman, Abraham Accords Prosperity Group, said that there is a change in the mindset of how people now see the Gulf region as one of opportunity. “This is the moment, this is the time for investments in this region,” he said at a summit. 

However, experts suggest that the vision of an integrated Middle East is contingent on a peaceful Palestine narrative. 

“The impact and aftermath of October 7 have reverberated around the region, making further progress on normalization more complicated. They have also underscored how the domestic and strategic interests of key regional players are still deeply intertwined with the Israeli-Palestinian conflict,” Yael Lempert, former US ambassador to Jordan said at a policy forum held by the Washington Institute. 

“The vision of an integrated Middle East will not be fully realizable without a pragmatic vision for resolving this conflict in a way that includes a viable future Palestine.”
 

Kathrine Nicolaisen, a Danish marketeer, and founder of Olives & Heather, was fuelled by a sense of justice and, one part ire, to form a remote-first marketing agency, in an attempt to showcase Palestinians on the world employment map. 

She speaks with Salaam Gateway on creating awareness, showcasing Palestinian talent regionally and globally and uplifting the indigenous society. 

Talk us through your journey of creating Olives & Heather?
I’m originally from Denmark but have been living abroad since I was 19. I built my career as a marketeer working in tech, but after my first trip to Palestine in 2018, I started looking for ways to get involved with the Palestinian cause. I was driven largely by a great sense of indignation, and wanted to offer support in a meaningful and relevant way.

At first, I spent a year working remotely for a Palestinian civil society organisation supporting their marketing efforts but then made the move to Palestine in 2020 to spend six months volunteering.

From there it snowballed: I landed a consultancy gig with another civil society organisation, I got a job with an American NGO operating out of Gaza, and by December 2021, I transitioned into what is now Olives & Heather. 

At first, I thought I would work as a marketing strategist supporting Palestinian startups, but as time went on, there was demand not only for strategy but hands-on execution, too.

That’s when I realised that the potential impact of Olives & Heather would be across three pillars: supporting Palestinian founders, amplifying Palestinian voices through advocacy work, and creating alternative job opportunities for Palestinian marketeers and designers.

The latter turned out to be the more significant part. 

How is the company creating opportunities for the next generation of Palestinian professionals?
Palestinian youth are amongst the highest educated in the region. The literacy rate is near 100% - 70% have attended university, and the level of English spoken across Palestine is exceptionally high for the region.

On top of that, Palestine has a long tradition of digital work dating back to the 90’s, when the first software companies were launched, followed by a wave of entrepreneurship, startup, and freelance culture after the 2007/2008 Gaza war.

In Gaza alone, tens of thousands of young people have been making a living online for years, so the talent and skills are already there. All they need is a chance, and that’s where Olives & Heather comes in. 

We’re a remote-first marketing agency with a team of 15 people, mostly women, working from locations such as Ramallah, Jericho, Tulkarem, Gaza City, Deir Al Balah, etc. 

Staying connected with the Palestinian tech community, whilst working with local tech startups and ecosystem builders is our bread and butter. However, over the last two years, we’ve greatly expanded and we now work with tech companies, startups, and ecosystem builders globally. 

What are the key impediments in promoting Palestinian talent?
Challenging stereotypes and reframing the narrative is a central part of our job. Over the years we’ve worked closely with key ecosystem players like Gaza Sky Geeks, the Palestinian IT Association, BuildPalestine, and many accelerators and tech upskilling initiatives.

Key obstacles and misconceptions tend to be rooted in a fear of investing in an unstable workforce and infrastructure, scepticism towards education and skills level, but also the fact that Palestinian labour is twice as expensive as its neighbouring countries Egypt and Lebanon, and 3-5 times more expensive than traditional Far East outsourcing destinations. 

This means that not only does Palestinian talent have to deliver excellent work, they have to go above and beyond from a service aspect in order to compete - and that was before the war in Gaza. 

Olives & Heather’s role is to attract international clients, creating opportunities for Palestinian talent that did not exist otherwise. 

Our duty is towards our team, but the team also understands that with every project, every client comes a responsibility to do your absolute best - not for Olives & Heather - but to pave the way for more opportunities to come.

Our greatest success is not just how many jobs we can directly create for Palestinian marketeers and designers, but our wider impact across the Palestinian tech ecosystem. 

What are the company’s key goals for 2026? 
Prior to the war, the youth unemployment rate in Palestine was estimated to be between 50-70%, meaning local opportunities were not just scarce - they were almost non-existent.

With the ceasefire in place, we are seeing a surge in Gaza-based freelancers looking to return to work. With the Palestinian tech ecosystem being dealt a serious blow, local opportunities are scarce, with freelancers needing all the support and opportunities they can get. 

Our goal as a business is to aggressively grow and expand as much as possible, and we hope to provide stable income for over 100 freelancers by 2028.

All growth to date has been entirely organic, and we are now ramping up our marketing and sales efforts, but we are also exploring alternative funding opportunities from philanthropic investors or business angels.
 

Precision medicine is fast emerging as a transformative force across the Organisation of Islamic Cooperation (OIC) countries. 

By harnessing breakthroughs in genomics, biotechnology, and artificial intelligence, these nations are laying the groundwork for a future of personalized prevention and treatment.

Several Muslim-majority nations are developing large-scale, population-specific genetic databases to tackle regional health challenges — particularly inherited and chronic diseases.

While disparities in infrastructure and research capacity persist, growing investments in biomedical innovation, digital health, and scientific training are positioning OIC countries to enhance health outcomes, lower costs, and strengthen self-reliance in medical science.

“The rise of individualized medicines is going to be a massive boom for the pharmaceutical industry - imagine a future where treatments are tailored to the unique genetic and biological makeup of each of the planet’s eight billion people,” Richard Staynings, chief security strategist at US-based Cylera, tells Salaam Gateway.

To make large-scale personalization feasible and affordable, he adds, the sector will need to embrace “advanced automation, artificial intelligence, and data-driven manufacturing at unprecedented levels.”

Malaysia’s leap into genomic medicine

Malaysia is emerging as a regional leader in integrating precision medicine into its healthcare system through collaboration between academia, government, and the private sector.

In 2024, the Ministry of Science, Technology and Innovation and the Ministry of Health launched the MyGenom Project, to conduct large-scale genome sequencing and build a national genomic reference database that reflects the country’s ethnic diversity. 

“This genomic infrastructure will strengthen Malaysia’s capacity for precision medicine, enabling more accurate disease prediction, personalized treatment, and improved pharmacogenomics,” Fadzhairi Jabar, CEO of Malaysian biotechnology company Arcadia Life Sciences tells Salaam Gateway.

Institutions like the Universiti Kebangsaan Malaysia Medical Molecular Biology Institute are spearheading clinical research on how genetics interact with environmental factors to influence disease, paving the way for tailored healthcare solutions.

Private-sector partnerships are also taking shape. Prudential Malaysia, for example, is working with healthcare providers to include precision medicine in cancer treatment plans, improving accessibility and affordability.

“Growing collaboration among government, academia, and industry, and supported by initiatives like the MyGenom Project and Clinical Research Malaysia, is driving progress in genomics, pharmacogenomics, and clinical trials across the OIC country,” says Jabar.

Malaysia’s multicultural makeup - comprising Malay, Chinese, Indian, and indigenous populations - presents both opportunity and challenge.

“This diversity enables the development of a rich, representative national genomic reference that can address gaps in global datasets and improve understanding of population-specific health risks,” says Jabar.

“It also supports efforts to reduce adverse drug reactions and enhance outcomes in chronic diseases such as cardiovascular, diabetes, and cancer. However, ensuring equitable representation of all ethnic groups remains a key challenge.”

AI and big data are central to these efforts. Programs like MyGenom integrate genomic, clinical, and population data for predictive analytics.

“Arcadia Life Sciences contributes by developing multi-omics biomarker platforms that combine genomic, proteomic, and metabolomic data with AI-driven analytics,” Jabar adds. 

“This enables discovery of disease-specific biomarkers and supports pharmacogenomics and personalized treatment.”

The company is now working with universities, hospitals, and research institutes locally and abroad to validate biomarkers and embed AI into clinical workflows - a move expected to boost Malaysia’s bioinformatics and translational research capacity.

GCC: A genomic frontier

Across the Gulf, precision medicine is rapidly evolving.

The UAE has emerged as a frontrunner, combining national programs with global partnerships involving AbbVie, AstraZeneca, and Harvard Medical School to develop diagnostics and advance personalized therapies. Its Emirati Genome Program, launched in 2019, has already sequenced more than 800,000 genomes, making it one of the world’s most comprehensive genetic datasets.

The personalised precision medicine programme for oncology has supported over 250 Emirati cancer patients through genomic screening and individualized care.

These efforts form part of Abu Dhabi’s Healthcare Life Science Vision 2030, which seeks to position the emirate as a global hub for precision medicine. The city’s Declaration on Longevity and Precision Medicine, launched in 2024, outlines a blueprint for integrating AI and genomics into mainstream healthcare.

Abu Dhabi showcased AI-powered diagnostic tools for early detection of chronic diseases like diabetes and cancer, at this year’s tech jamboree, Gitex. Integrated with the health information exchange platform, Malaffi, these innovations enhance data sharing and clinical coordination.

In January, researchers at Dubai’s Mohammed Bin Rashid University of Medicine and Health Sciences published a milestone study based on 53 individuals that strengthens the UAE’s National Genome Strategy. By March, the Emirates Genome Council was outlining plans to use genomic data to enhance public health outcomes.

Meanwhile, the Saudi Human Genome Program continues to advance the country’s personalized medicine capabilities by building a vast national genetic database. Institutions like King Faisal Specialist Hospital & Research Centre are pioneering genetic diagnostics and CAR-T cell therapies, while the King Abdullah International Medical Research Center leads gene therapy trials for rare diseases.

Saudi Arabia's embrace of AI-driven pharmacogenomics and digital health tools — including the world’s first diabetes command center launched recently — underscores its vision improve patient outcomes.

Meanwhile, Qatar has become a model for precision medicine integration. The Qatar Genome Programme has sequenced more than 30,000 citizens and 3,000 Arab residents, establishing critical datasets for regional populations. 

The newly formed Qatar Precision Health Institute is translating these findings into clinical practice, expanding pharmacogenomics implementation, and training healthcare professionals.

In 2024, Hamad Medical Corporation launched a pharmacogenomics initiative that embeds genetic testing into prescribing practices, enabling more effective drug therapy.

Smarter diagnostics and early detection

Early detection remains a cornerstone of precision medicine, aiming to identify disease long before symptoms emerge.

The UAE is pushing the frontier with AI-enhanced tools and screening programs like Detectiome, a multi-cancer test, capable of identifying tumors at their earliest stages. Saudi Arabia’s Food and Drug Authority has also approved an in vitro diagnostic test for early detection of Alzheimer’s disease - a 20-minute, non-invasive plasma biomarker assay hailed as a major step forward.

Radiology, too, is being transformed. “In radiological medicine, procedures that once relied on traditional CT scans to perform contrast tomography now use far lower doses of radiation,” says Staynings. “This produces a darker image that a radiologist can still interpret, but which can also be enhanced through AI technologies.”

The result, he explains, is sharper imaging that can detect subtle cellular changes — early indicators of tumor development invisible to the naked eye.

“That is a huge advantage, especially for fast-growing populations across the Muslim world, where the costs of managing millions of additional patients with chronic diseases could be enormous,” he adds. 

“If we can prevent those diseases from ever manifesting themselves, we can save national health systems billions of dollars.”

Indian businesses and exporters may steer a course towards GCC countries to circumvent steep US tariffs, according to analysts.  

US President Donald Trump signed an executive order in August, imposing an additional 25% tariff on imports from India, in addition to other duties, fees, taxes, exactions, and applicable charges.

The White House cited India’s continued purchase of Russian oil, as the rationale for the move, calling it a counter to Russia’s threat to US national security and foreign policy. Russia accounts for about 34% of India’s crude imports. 

Indian exports to the US fell 11.93% year-on-year in September, and a whopping 20.39% on the previous month, as the impact of the tariffs began to take shape. 

The steepest impact will fall on labour-intensive sectors where the US accounts for a large share of India’s exports - including carpets (58%), textiles and garments (35%), gems and jewellery (39%), and shrimp (32%), Ajay Srivastava, founder of the Global Trade Research Initiative, a Delhi-based think tank, tells Salaam Gateway. 

“These industries have thin margins and little room to absorb a 50% tariff shock.” 
The impact may drive Indian companies to veer towards other lucrative markets, including the GCC. 

“Several Indian firms, particularly in gems and jewellery and electronics assembly, are exploring a shift of production and processing bases to the UAE and other GCC countries to remain cost competitive. The region’s low-tariff access to key markets and strong logistics networks makes it an attractive fallback option,” adds Srivastava. 

“Sectors where production and finishing facilities can be quickly established are best positioned to reroute exports via the GCC.” 

Krishna Bhimavarapu, an economist at US-headquartered State Street investment Management adds that while there is a lot of uncertainty, there is a good chance for Indian firms to explore the GCC markets, especially given the positive trade dialogue that has been happening.

India has strong economic and diplomatic ties with the Gulf countries with bilateral trade worth $178.56 billion in FY2024-25. 

Indian exports to the UAE soared 24.33% year-on-year in September, rising from last year’s $2.8 billion to $3.5 billion last month. Exports to Saudi Arabia increased 14.2% last month, too, according to data released by the Indian ministry of commerce and industry.   

“Dubai and Abu Dhabi, already major re-export hubs, are emerging as natural staging points for Indian firms diversifying away from direct US shipments,” says Srivastava. 

The six-nation GCC hosts north of nine million Indian expatriates, making it an invigorating market for the Indian diaspora and products.  The influx of Indian businesses into the GCC has continued to gather momentum, with over 9,000 joining Dubai Chamber of Commerce during the first six months of the year.

Meanwhile, over 40 Indian companies have established regional headquarters in Saudi Arabia.

The UAE will also be home to Bharat Mart, a huge facility spread across 2.7 million square feet designed to provide new market opportunities to Indian manufacturers and exporters.

Trade alliances are in the ascendant, too - India signed a comprehensive economic partnership agreement (CEPA) with the UAE in May 2022, to reduce or eliminate tariffs on the vast majority of products. The Southeast Asian country has recenty concluded CEPA negotiations with the sultanate of Oman and is aiming to lock in a free trade agreement with Qatar by third quarter of next year to push bilateral trade to $30 billion by 2030.

Among reports of an imminent US-India trade deal, will such a pact, if realized, stall the influx of Indian companies looking to step up shop in the GCC? 

“I don't think so,” says Bhimavarapu. “Because there is also a trade dialogue with the GCC countries alongside with the US.”

According to the World Food Program, food security is achieved when people have reliable access to sufficient, nutritious food. That might seem simple enough, but for decades, food security has meant emergency grain shipments in the 57-member Organisation of Islamic Cooperation (OIC).

Today, with climate shocks, volatile markets, and rising populations, it has become an even more pressing issue, making urgent investment essential.

The Global Food Security Index 2022 ranks most OIC states as "weak" or "very weak." While countries such as Bahrain, the UAE, and Uzbekistan are outliers with their progress, conditions have deteriorated at the other end in countries such as Somalia, Sudan, Syria, and Yemen between 2020 and 2022.

The FAO classifies 26 OIC countries as low-income food deficit states, and 22 require external assistance. Between 2020 and 2022, an average of 45% of the OIC's population faced moderate or severe food insecurity, with nearly half of the world's food crises occurring in OIC states.

Fragile systems on the brink of collapse
According to SESRIC's 2023 report, agriculture still provides livelihoods for millions and contributes more than 25% of GDP in 11 OIC member countries. But the region remains a net importer. In 2021, imports reached $292.9 billion, far outpacing exports at $188 billion, even as intra-OIC trade grew 85%.

The four pillars of food security reveal how exposed the region is. Domestic production has declined in many places, leaving states like Saudi Arabia, the UAE, and Jordan importing more than 90% of their cereals. Access to food is deeply uneven: food is affordable in the Gulf, but in sub-Saharan Africa, households spend more than their GDP-equivalent income on food, leaving them reliant on aid. 

Malnutrition is entrenched, with nearly one in five children stunted, especially in Niger and Libya, where poor sanitation compounds the crisis. Stability is the weakest pillar: wars, droughts, floods, pandemics, and market shocks repeatedly push communities to the brink. In 2022, 172,000 people in OIC states were classified as facing famine, with millions more in emergency hunger.

Financing gaps in the agriculture chain
Agriculture in OIC countries remains severely underfinanced, receiving less than 5% of total credit. Only about 39% of farmers have access to finance or insurance, leaving smallholders vulnerable to shocks.

Some relief has come from multilateral financing. The Islamic Development Bank (IsDB) has committed $8 billion through its Food Security Response Program, while its trade finance arm, ITFC, channelled $1.75 billion into food and agriculture in 2024. But more is needed.

Sporadic investment responses
Before examining each country's investments, it's important to acknowledge that food security is a complex and vast area that translates to different areas of concern depending on each country's topography and specific requirements.

With financing channels under strain, OIC governments and institutions are turning to targeted investments across key sectors:

Water and land: The UAE's Bustanica vertical farm — a $40 million Emirates Crop One venture — now supplies Emirates Airlines, while a joint venture between Plenty Unlimited Inc., a U.S.–based indoor vertical farming startup, and Mawarid Holding Investment, a subsidiary of Alpha Dhabi Holding in the UAE, is to build five indoor farms across the GCC. Morocco's OCP Group has committed $13 billion (2023–27) to expand fertilizer capacity and develop green ammonia, backed by a €350 million AFD loan.

Agro-inputs and fertilizer: Morocco's OCP is ramping up exports across Africa, while Nigeria's Dangote Fertiliser plant, with a capacity of 3 million tonnes a year, has become a key supplier. Bangladesh's 2025/26 ITFC plan allocates $2.75 billion for petroleum and fertilizers.

Poultry and livestock: Qatar's 2024–30 Food Security Strategy focuses on poultry and dairy, while Egypt, with support from ITFC and the World Bank, is expanding feed and milling capacity.

Grain and logistics: Wheat imports remain unavoidable. Saudi Arabia's SALIC bought an 80% stake in Olam Agri for $1.78 billion in 2025, securing access to origination in Asia and Africa. The UAE's ADQ owns 45% of Louis Dreyfus Company, while Egypt has shifted to private wheat contracts, supported by $1.3 billion in ITFC financing.

Technology and insurance: The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) issued $1.12 billion in guarantees for food-related trade between 2022 and 2024. The OIC's dedicated agency, IOFS, has proposed a $1 billion Grain Fund to pool reserves and invest in climate-resilient crops.

Progress is beset by gaps
Progress is tangible. But gaps remain. Tariffs and weak logistics hamper intra-OIC food trade. Efficient logistics and transport infrastructure are vital for lowering trade costs and ensuring predictable food imports. While OIC trading hubs benefit from advanced systems, many smaller economies face high costs due to weak networks.

Investing in transport corridors, alongside supportive trade agreements, could reduce costs, boost trade flows, and strengthen food security. Between now and 2027, several milestones will test these strategies: the SALIC–Olam Agri integration, OCP's green ammonia rollout, and the launch of the IOFS Grain Fund.

In February 2025, Indonesia launched Danantara, a sovereign wealth fund tasked with managing $900 billion in state-owned enterprise (SOE) assets to propel economic growth.

Amid a turbulent economic landscape - marked by a weakening rupiah, a contracting equity markets space, and waning investor confidence - Danantara represents a bold bet on transforming Indonesia’s economy. 

Indonesian president Prabowo Subianto envisions it as a driver of propelling GDP growth from 5% to 8% by 2029, emulating giants like Singapore’s Temasek. Yet, public skepticism warns of governance risks and parallels to Malaysia’s 1MDB scandal. 

Potential to elevate Indonesia
Danantara’s ambitious scope - consolidating 65 SOEs, starting with seven giants like Bank Mandiri and Pertamina - offers a pathway to address Indonesia’s economic turbulence. By streamlining SOE operations, it could boost efficiency, reduce fiscal burdens, and unlock $20 billion in initial funding for high-impact sectors like infrastructure, renewable energy, and nickel downstreaming.

These investments could attract foreign direct investment (FDI), which is critical as investor confidence falters (e.g., LG Energy Solution’s $8.5 billion EV project withdrawal). 

If successful, Danantara could mirror Temasek’s role in Singapore, where state-led investments drive 5-6% annual GDP growth. For Indonesia, this could stabilize the rupiah, battered by global commodity price swings, and restore market momentum.

Beyond growth, the wealth fund could empower Indonesia to retain more economic value, addressing a longstanding issue for OIC nations often exploited by global corporations for low-value production. By investing in downstream industries like nickel processing, it could shift the country from raw material exporter to high-value producer, boosting national wealth. 

Its global advisory board, including billionaire and hedge fund manager Ray Dalio, signals intent to court international capital, positioning Indonesia as a regional economic powerhouse.

Risks that could compound challenges 
Danantara’s governance structure is a glaring concern, threatening to amplify Indonesia’s economic challenges. Unlike Temasek’s independent board, Danantara’s leadership raises fears of cronyism. National auditors (BPK, KPK) lack direct oversight, requiring House approval to probe finances. 

The appointment of Thaksin Shinawatra, Thailand’s former prime minister ousted in a 2006 coup and dogged by corruption allegations, to the advisory board further erodes credibility, calling Danantara’s integrity into question. This move risks alienating investors already wary after the Jakarta index responded negatively on the fund’s launch day.  

Weak governance could exacerbate currency volatility and capital flight, as seen in recent market trends. If Danantara bails out underperforming SOEs without reforms, it risks draining public funds - $325 trillion IDR from budget cuts is already committed. A 1MDB-like scandal, where political influence led to a $4.5 billion loss, could deepen the rupiah’s slide and deter FDI.

The Business Judgment Rule, shielding officials from liability, and optional supervisory committees heighten moral hazard, potentially turning Danantara into a political slush fund rather than an economic stabilizer.

Malaysia’s tale of triumph and tragedy
Malaysia, an OIC peer with a commodity-driven economy, offers a dual perspective on state-led investment through Khazanah Nasional Berhad and the 1MDB scandal - models of success and failure for Danantara to heed.

Khazanah, established in 1993, manages $40 billion in assets and has driven Malaysia’s economic growth (e.g., 5.6% GDP growth in 2022) by professionalizing SOE management and investing in technology and healthcare.

Unlike Danantara’s politically driven structure, Khazanah’s independent audits and professional board have attracted FDI, stabilizing Malaysia’s economy during commodity volatility. Its disciplined approach to high-return projects offers a roadmap for Danantara to boost Indonesia’s markets and rupiah. 

However, Khazanah’s early missteps, like bailing out Malaysia Airlines, warn Danantara against propping up inefficient SOEs without reforms, which could strain Indonesia’s budget amid 2025’s turbulence.

On the other hand, The 1MDB scandal, where $4.5 billion was siphoned off through corruption starting in 2009, underscores the perils of weak governance. Controlled by then-premier Najib Razak, 1MDB lacked independent oversight, leading to massive debt and a weakened ringgit. 
Thaksin Shinawatra’s advisory role in Danantara echoes 1MDB’s political entanglements, amplifying fears of elite capture.

To avoid 1MDB’s fate, Danantara must enforce rigorous audits and insulate its board from controversial figures, ensuring funds fuel growth, not enrichment.

Malaysia’s contrasting experiences highlight a clear lesson: professional governance is critical to economic success. Khazanah’s transparency offers Danantara a path to stabilize Indonesia’s economy, while 1MDB’s collapse warns of the catastrophic risks posed by political interference, which could deepen Indonesia’s currency and confidence crises.

High-stakes gamble
Danantara stands at a crossroads. If it adopts Khazanah’s professional governance and strategic focus, it could elevate Indonesia’s economy, stabilizing markets and attracting FDI to counter 2025’s turbulence. 

However, governance flaws - political leadership, Thaksin’s scandal-tainted appointment, and weak oversight - risk a 1MDB-like disaster, deepening currency woes and investor distrust. 

To succeed, Danantara needs transparent audits, a professional board free of controversial figures, and clear investment criteria, insulated from cronyism. 

As Indonesia navigates global headwinds, Danantara’s execution will determine whether it becomes a beacon of growth or a costly misstep. Policymakers must heed OIC lessons to ensure it lifts, not sinks, the nation’s prospects.
 

Rianovel Mere is a consultant and project manager at DinarStandard