Gov’t Reaffirms Commitment to SOE Reform, Revitalization of National Strategic Industries

The Government remains committed to reforming state-owned enterprises (SOEs) and strengthening national strategic industries as key pillars of its efforts to realize a prosperous Indonesia, with reforms transforming SOEs that had burdened the state for decades into entities that are now beginning to demonstrate improved performance.

“Ladies and gentlemen, I have received a report that several state-owned enterprises (SOEs) that had been incurring losses for decades are beginning to turn a profit this year. They are now starting to make profits,” President Prabowo Subianto stated while inaugurating the construction of five dams across several regions of Indonesia at the Meninting Dam in West Lombok Regency, West Nusa Tenggara (NTB), Friday (07/10).

The President also underscored that soon after taking office, he was briefed on the substantial number of SOEs operating in Indonesia. According to him, the figure includes not only parent companies, but also a wide network of subsidiaries and affiliated entities, all of which require improved governance.

“My initial estimate was that we had around 300, or at most 400, state-owned enterprises. However, after I was inaugurated as President, I was informed that the number had reached 1,077. There may be even more subsidiaries and affiliated companies. Th was one way of concealing state assets and the people’s money. We are now taking steps to bring everything into proper order,” the President said.

As part of these reforms, President Prabowo Subianto stated that the Government has shut down hundreds of SOEs deemed financially unsustainable and inefficient. The measure is aimed at reducing waste and ensuring that state assets are managed more productively.

“As of the end of July, we will have closed 250 state-owned enterprises that were no longer viable. By December 31, 2026, the total is expected to reach 800. We will continue to shut down those that are inefficient, consistently unprofitable, and persistently incurring losses,” he said.

The President added that structural reforms and efficiency measures have delivered significant savings, including reductions in overhead costs and directors’ remuneration, totaling approximately Rp70 trillion.

In addition to reforming SOEs, the Head of State also reaffirmed the Government’s commitment to preserving and revitalizing national strategic industries. He noted that several strategic enterprises previously slated for divestment are now being revitalized instead.

“There were many companies slated for divestment, but I halted those plans. There were even proposals to sell strategic defense industries such as PT PAL, PT Pindad, and PTDI. Instead, we have revitalized them, and will continue to strengthen these companies,” the President emphasized.

On that occasion, President Prabowo Subianto also highlighted the progress achieved by PT PAL and PT Pindad as evidence of the growing capabilities of Indonesia’s strategic industries. According to him, the country’s defense industry has shown tangible progress and is gaining increasing international recognition.

“PT PAL is now capable of building advanced warships and submarines, and will continue to produce increasingly sophisticated vessels. I also recently received a report from PT Pindad that it has secured a contract from Saudi Arabia to manufacture rifles and machine guns for the Saudi Arabian Armed Forces,” the President said.

The President also noted that companies that had previously faced financial difficulties, including Garuda Indonesia, are beginning to show positive results. He emphasized that the reform process will continue in phases.

“I prohibited the sale of Garuda. It is now beginning to recover. Next month, after decades of losses, it is expected to return to profitability. Ladies and gentlemen, we will continue to improve everything step by step. We will address every shortcoming,” the President concluded.

On strengthening the national economy, the President also highlighted Danantara as Indonesia’s sovereign wealth fund. He noted that Danantara reflects the collective economic strength of the Indonesian people and will play a key role in supporting the country’s long-term development agenda.

“For the first time in the history of the Republic of Indonesia, we have our own sovereign wealth fund, called Danantara. It is now among the largest in the world, possibly the fifth largest. This fund represents the economic strength of the Indonesian people, brought together to support our national development,” the President said. (BPMI of Presidential Secretariat) (RIF/EP)