Indonesia consolidates 258 state-owned firms, aims for further reduction

Indonesian President Prabowo Subianto received an update on the government's state-owned enterprise (SOE) consolidation program during a meeting with Investment and Downstream Industry Minister Rosan Roeslani, who also heads the sovereign wealth fund Danantara Indonesia.

The meeting, held at the president's residence, focused on the ongoing restructuring of Indonesia's SOEs. According to a report presented by Rosan, the consolidation process has already successfully integrated 258 of the approximately 1,077 existing SOE entities. The government's near-term objective is to further reduce this number to around 300.

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The consolidation and transformation process of SOEs is continuing. Out of approximately 1,077 SOE entities, around 258 have already been successfully consolidated.

This initiative, first instructed by President Prabowo in 2025, aims to streamline the vast network of state-owned companies. The long-term vision is to shrink the number of SOEs to a more manageable figure between 200 and 240. Prabowo has emphasized that this consolidation is crucial for enhancing operational efficiency, bolstering corporate governance, and ultimately decreasing the financial burden on the state.

Furthermore, the president highlighted that a leaner SOE structure would enable these companies to operate more effectively according to international standards, potentially improving returns by 1 to 2 percentage points. To support this transformation, Danantara has been tasked with recruiting top talent, and regulations have been amended to allow foreign professionals to assume leadership roles in restructured state-owned companies.

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I have instructed Danantara's leadership to rationalize everything, reducing the number of SOEs from 1,000 to a more manageable figure, perhaps 200, 230, or 240.