Indonesia’s President Prabowo vowed to close hundreds of state‑owned enterprises by the end of the year, saying the move will cut waste and boost efficiency.
Massive SOE restructuring plan unveiled
Speaking to parliament, the president said the Danantara sovereign wealth fund recently identified 1,074 state‑owned enterprises, far more than the 300‑400 he had believed existed.
He announced that 290 of those firms have already been shut down and that no more than 300 should remain after the year‑end deadline.
“We will close more than 750 enterprises and retain only those that are productive, those that create added value for the people,” he said, describing the effort as potentially the largest corporate restructuring in the world.
The administration reports that the closures have already saved about 50 trillion rupiah—roughly $2.8 billion—in overhead costs such as salaries, building rentals and travel expenses.
Officials aim to push total savings past 70 trillion rupiah before December.
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To address alleged misconduct, the president threatened to set up a special ad‑hoc court that could investigate board members and managers for up to three decades of “made‑up” profit reporting.
He also suggested a limited amnesty for officials who come forward and cooperate.
Implications for governance and the economy
Indonesia scored 34 out of 100 on Transparency International’s 2025 Corruption Perceptions Index, showing the governance challenges the reforms aim to tackle.
Critics have pointed to high living costs and a costly free‑school‑meals program, but the president insisted the scheme will continue with “improvements and efficiency.”
He warned that one in four Indonesian children suffer from stunting, linking the issue to broader socioeconomic concerns.
Despite global uncertainty, the president expressed confidence that the country will be food‑ and energy‑secure and projected economic growth of 6.0 percent by the end of 2026.
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GDP growth recorded 5.3 percent in the second quarter, following a 5.6 percent rise in the first quarter, though some analysts remain skeptical of official figures.
While the plan targets financial waste, its broader impact may reshape how the government balances public ownership with market discipline, a tension that has long defined Indonesia’s development path.
Next steps and timeline
The president asked lawmakers to back the special court proposal and to consider the amnesty measure during the upcoming legislative session.
By December 31, there should be no more than 300 entities left.
For further details on Indonesia’s anti‑corruption rankings, see Transparency International’s Corruption Perceptions Index.
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