Indonesia to Reduce Hundreds of State-Owned Enterprises to Improve Efficiency

RRI.CO.ID, Bangkalan - The Indonesian government reported it has reduced hundreds of state-owned enterprises (SOEs) and related entities. This move, later confirmed by President Prabowo Subianto, was undertaken to improve efficiency and strengthen corporate governance.

Since the early 2010s, the government has reduced the number of SOEs through various measures, such as shutting down or merging them into holding companies with other SOEs. In 2014, Indonesia had at least 140 SOEs, excluding subsidiaries, and since then, the number of standalone SOEs has steadily declined.

President Prabowo Subianto appears to be continuing this streamlining effort by signaling further SOE consolidation. This was evident when he met with Minister of Investment and Downstream Industry and Head of Danantara Investment Management Agency (Danantara Indonesia), Rosan Roeslani, in Jakarta on Sunday, 21 June 2026.

Established in 2025, Danantara Indonesia is one of the country's sovereign wealth funds, alongside the Indonesia Investment Authority (INA), which was established in 2020. One of its main responsibilities is managing most SOEs, particularly those that were previously under the direct supervision of the Ministry of State-Owned Enterprises—now the State-Owned Enterprises Regulatory Agency.

During the meeting, Prabowo was said to have focused on the ongoing transformation process of SOEs. Cabinet Secretary Teddy Indra Wijaya stated that 258 SOE entities had already been successfully consolidated.

“A total of 258 entities have been successfully consolidated, with a target of around 300 entities in the near future. This step is expected to improve efficiency, strengthen governance, and reduce the financial burden that has long been borne by the state,” Teddy said, as quoted by Indonesia’s Presidential Secretariat on Sunday.

A few days later, President Prabowo again emphasized the reduction of SOEs during the closing session of the 2026 National Conference of Religious Scholars and the Grand Conference of Nahdlatul Ulama in Bangkalan Regency, East Java. The event, held on Tuesday, 23 June 2026, was organized by Nahdlatul Ulama (NU), the world’s largest Islamic organization, as preparation for its congress scheduled for August.

Speaking before ulemas and NU officials, Prabowo said that the government was liquidating companies that were considered to be persistently loss-making. He expressed hope that another 700 to 800 companies would be closed.

“If I’m not mistaken, in the end, we will close approximately 800 state-owned companies, at least about 700. We are saving trillions of rupiah simply by liquidating down companies that are not being run properly,” he said.