Speaking on Tuesday during the closing ceremony of a Nahdlatul Ulama conference in Bangkalan, East Java, Prabowo admitted his surprise at discovering that Southeast Asia’s largest economy operates more than 1,000 state-run business entities.
“Our end goal is to dissolve 800 state companies, more or less. Well, we will aim for a minimum of 700 entities,” Prabowo said in an address livestreamed by the Presidential Secretariat.
The president defended the aggressive restructuring, framing it as a vital strategy to reduce excessive spending on public sector management and personnel.
By shutting down hundreds of unprofitable firms, he argued, the government will save trillions of rupiah previously allocated to fund the salaries, benefits, and bonuses of a vast network of directors and commissioners.
According to Prabowo, the government has already liquidated approximately 240 state businesses that were consistently bleeding money.
He noted that these structural cuts have already eased financial pressures on Indonesia’s national budget.
“We have already shut down around 240 businesses because none of them gained profits; they kept recording losses,” Prabowo said, emphasizing that these entities were ultimately “owned by the people.”
He further alleged that some directors had intentionally utilized the convoluted corporate structures of certain SOEs to “conceal their corruption.”
The aggressive corporate downsizing follows a massive institutional overhaul of Indonesia’s public sector.
Parliament recently approved the dissolution of the formal Ministry of State-Owned Enterprises.
Its operational responsibilities over state assets have been transferred to Danantara, Indonesia’s multi-billion dollar sovereign wealth fund, while regulatory functions shifted to the newly established SOE Regulatory Agency (BP BUMN).
BP BUMN has outlined an explicit target to consolidate and downsize the country’s state firms and their subsidiaries from 1,100 down to just 257.
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Translator: Maria C, Tegar Nurfitra
Editor: Aditya Eko Sigit Wicaksono
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