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🇳🇬 Nigeria /Elections & Politics

Indonesia to shut over 750 state-owned firms — President

From The Punch · () English

Summarized and contextualized by DistantNews.

At a glance

News From a news agency New plan
  • Indonesian President Prabowo Subianto announced plans to close over 750 state-owned enterprises by year's end.
  • The president cited the discovery of 1,074 state-owned enterprises, many of which are "unproductive" and report fabricated profits.
  • This move aims to consolidate operations, retain only productive entities, and save trillions of rupiah in overhead costs.

Indonesia is set to undertake a massive corporate restructuring, with President Prabowo Subianto announcing the closure of more than 750 state-owned enterprises (SOEs) by the end of the year. The president revealed that the nation's sovereign wealth fund, Danantara, identified 1,074 SOEs, a number far exceeding his initial expectations.

There are far too many unproductive state-owned enterprises, always reporting losses while claiming profits, those profits are just made up.

— President Prabowo SubiantoExplaining the rationale behind closing numerous state-owned enterprises.

"There are far too many unproductive state-owned enterprises, always reporting losses while claiming profits, those profits are just made up," Prabowo stated during his state of the nation address to parliament. He expressed concern that these entities often operate without a sense of responsibility to the nation. So far, 290 SOEs have been closed, with the goal of reducing the total number to no more than 300 by December 31.

The president described the initiative as potentially "the largest corporate restructuring in the world." The drive has already yielded significant savings, with approximately 50 trillion rupiah (over $2.8 billion) saved in overhead costs, including salaries for directors and commissioners, rental fees, and travel expenses. The target for this year is to achieve savings exceeding 70 trillion rupiah.

I had thought there were 300 or 400 state-owned enterprises, but it turns out there are 1,074.

— President Prabowo SubiantoExpressing surprise at the large number of state-owned enterprises identified.

President Prabowo also mooted the possibility of establishing a special ad hoc court to investigate the management and boards of these SOEs over the past 30 years. However, he also extended an offer for a "special amnesty for those who repent," suggesting a path for accountability and potential rehabilitation for individuals involved.

And these state-owned enterprises sometimes operate as they please, with no sense of responsibility to the nation, to the state.

— President Prabowo SubiantoCriticizing the lack of accountability among some state-owned enterprises.

The government's objective is to retain only those enterprises that are productive and create added value for the Indonesian people. This consolidation aims to streamline operations, improve efficiency, and ensure that state assets are managed more effectively for the benefit of the nation.

We will close more than 750 enterprises and retain only those that are productive, those that create added value for the people.

— President Prabowo SubiantoOutlining the criteria for retaining state-owned enterprises.
DistantNews Editorial

Originally published by The Punch. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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