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🇮🇩 Indonesia /Economy & Trade

Prabowo plans to cut 750 state-owned enterprises to boost efficiency

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Indonesian President Prabowo Subianto plans to reduce the number of state-owned enterprises (SOEs) from over 1,000 to approximately 250 by year-end.
  • The move aims to increase efficiency, cut overhead costs, and address concerns about high executive salaries in underperforming SOEs.
  • Prabowo stressed the need for rationalization and efficiency, demanding the streamlining process be completed within the current year.

Indonesian President Prabowo Subianto is set to implement a significant reform by drastically cutting down the number of state-owned enterprises (SOEs). The plan involves reducing the current tally of over a thousand SOEs to around 250 by the end of 2026, a move aimed at boosting efficiency and rationalizing state assets.

We want to be rational and efficient, and we will prove this through action.

— Prabowo SubiantoIndonesian President stating his administration's commitment to efficiency in state-owned enterprises.

President Prabowo has voiced strong concerns regarding the substantial overhead costs associated with these enterprises, particularly the high salaries paid to their directors and commissioners. He pointed out that many SOEs are not profitable yet continue to incur significant operational expenses, including executive compensation, which he stated is ultimately funded by public money.

"We want to be rational and efficient, and we will prove this through action," Prabowo declared at the Science, Technology, and Industry Convention in Jakarta. He emphasized that streamlining the SOEs is a critical cost-saving measure. "Imagine, if we close down over 750 state-owned enterprises. 750 chief executives, 750 directors multiplied by 4 or 5 (people), 750 commissioners multiplied by 10 (people). What will the overhead be like, and what will their salaries be like," he elaborated.

Imagine, if we close down over 750 state-owned enterprises. 750 chief executives, 750 directors multiplied by 4 or 5 (people), 750 commissioners multiplied by 10 (people). What will the overhead be like, and what will their salaries be like.

— Prabowo SubiantoPresident Prabowo illustrating the potential cost savings from reducing the number of state-owned enterprises.

This ambitious initiative underscores Prabowo's commitment to fiscal discipline and effective governance. He has set a firm deadline, demanding that the entire process of reducing the number of SOEs be completed within the current year. The convention itself, attended by numerous academics, highlights Prabowo's focus on leveraging expertise for national development, with this SOE reform being a key component of his broader economic strategy.

I demand that it must be completed within this year.

— Prabowo SubiantoPresident Prabowo setting a firm deadline for the SOE streamlining process.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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