Indonesian President Prabowo plans to dissolve 800 state firms

Indonesian President Prabowo Subianto has announced an ambitious plan to dissolve as many as 800 state-owned enterprises (SOEs) deemed underperforming, as part of a significant efficiency drive aimed at curbing massive state losses and combating corruption. The president expressed surprise at the sheer number of state-run business entities operating in Southeast Asia's largest economy, which exceeds 1,000.

"Our end goal is to dissolve 800 state companies, more or less. Well, we will aim for a minimum of 700 entities," Prabowo stated during the closing ceremony of a Nahdlatul Ulama (NU) conference in Bangkalan, East Java. He framed the aggressive restructuring as a crucial strategy to cut down on excessive government spending allocated to the management and personnel of these public sector entities. By closing unprofitable firms, the government expects to save trillions of rupiah previously used for the salaries, benefits, and bonuses of directors and commissioners.

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Our end goal is to dissolve 800 state companies, more or less. Well, we will aim for a minimum of 700 entities.

Prabowo revealed that the government has already liquidated approximately 240 state businesses that were consistently recording losses. He emphasized that these structural cuts have already begun to alleviate 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," he said, noting that these entities were ultimately "owned by the people."

Furthermore, the president alleged that some directors had exploited the complex corporate structures of certain SOEs to conceal corrupt practices. This sweeping corporate downsizing is part of a broader institutional overhaul of Indonesia's public sector. Parliament recently approved the dissolution of the formal Ministry of State-Owned Enterprises, transferring its operational duties to Danantara, Indonesia's sovereign wealth fund, and its regulatory functions to the newly established SOE Regulatory Agency (BP BUMN). The BP BUMN has set a target to consolidate and reduce the number of state firms and their subsidiaries from 1,100 to just 257.

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We have already shut down around 240 businesses because none of them gained profits; they kept recording losses.