Indonesia plans to shut down more than 750 state-owned enterprises by the end of 2026 as part of a major restructuring aimed at reducing waste and improving the performance of government-owned businesses.
President Prabowo Subianto announced the plan on Friday during his state of the nation address to parliament, saying only productive companies that create value for the public would be retained.
“There are far too many unproductive state-owned enterprises, always reporting losses while claiming profits — those profits are just made up,” Prabowo said.
The president said the government discovered that Indonesia had 1,074 state-owned enterprises after the establishment of Danantara, the country’s sovereign wealth fund, last year to oversee state assets.
“I had thought there were 300 or 400 state-owned enterprises, but it turns out there are 1,074. And these state-owned enterprises sometimes operate as they please, with no sense of responsibility to the nation, to the state.”
According to Prabowo, 290 companies have already been shut down, while the government aims to reduce the total number to no more than 300 by December 31.
“We will close more than 750 enterprises and retain only those that are productive, those that create added value for the people,” he said, describing the exercise as potentially “the largest corporate restructuring in the world.”
The restructuring has reportedly generated about 50 trillion rupiah, equivalent to more than $2.8 billion, in savings from overhead expenses, including directors’ and commissioners’ salaries, office and vehicle rentals, and official travel.
The government has set a target of saving more than 70 trillion rupiah this year.
Prabowo also proposed establishing “a special ad hoc court to investigate the management and boards going back 30 years, maybe.”
However, he urged lawmakers to consider “a kind of special amnesty for those who repent.”
The Indonesian president said the measures were necessary to ensure that state-owned companies operate responsibly and contribute meaningfully to the country’s economy.
