President Prabowo Subianto Reaffirms SOE Reform to Improve Efficiency and Public Benefit

President Prabowo Subianto reaffirmed the Government’s commitment to reforming state-owned enterprises (SOEs) by improving efficiency, consolidating operations, and closing unproductive enterprises.

These efforts aim to improve the management of state assets and ensure that SOE business activities deliver tangible benefits to the people.

“We have consolidated and streamlined 1,074 SOEs, reducing the number to around 360 or 364 as of last night. By December, we aim to have closed 700. SOEs that are inefficient, loss-making, and have a history of falsifying financial statements will be closed. We will focus on SOEs that generate returns for the people,” the President stated in his address at the National Coordination Meeting of the Regional Financial Access Acceleration Team (TPAKD) at JIEXPO Kemayoran, Jakarta, Thursday (10/22).

The Head of State also stated that the reforms were part of the Government’s effort to realign national economic governance with the provisions of Article 33 and Article 34 of the 1945 Constitution.

According to the President, improving economic governance takes time and consistency, but that the Government’s measures over the past two years were beginning to yield results.

“For decades, our national wealth has been drained away on an enormous scale. But now we have the courage to make changes and return to the principles of Article 33 and 34 of the 1945 Constitution. This transition and these improvements cannot happen overnight,” the President said.

The President explained that the Government had taken firm action against SOEs that continued to incur losses while encouraging companies that had struggled to turn a profit to improve their performance. He cited cases in which SOE profits had risen by 200 percent, 300 percent, and even 900 percent, demonstrating the potentials for recovery through more efficient management.

“However, we have demonstrated this over the past two years. We have closed SOEs that consistently incurred losses. Those that previously struggled to turn a profit are now profitable. Some have increased their profits by 900 percent, others by 200 percent or 300 percent. We are now determined to improve efficiency,” the President stated.

In addition to SOE reform, the President stressed the need for firm government action against violations committed by concession holders, particularly those related to land and forest fires. He cited indications of repeated violations by several companies and urged the Government not to hesitate to take decisive action, including revoking permits where violations are proven.

“Regarding forest fires, there are indications that many foreign companies may also bear responsibility. These companies were granted concessions, yet some have committed violations three or four times over more than a decade. Others have committed dozens of violations times, with one recording 19. In my view, if a company violates regulations twice, its permit should be revoked,” the Head of State added.

The President added that the Government could train Indonesians to manage plantations and other business entities currently run by concession holders. He encouraged regional governments and universities to identify and nurture capable young people who could play a greater role in managing the nation’s natural resources.

“Regional governments and university faculties should identify promising young people. There is no reason Indonesians cannot manage these plantations. We could manage them even better because we love our homeland. Education is essential. Governors and regents prioritize it. We must educate our people,” the Head of State concluded. (BPMI of Presidential Secretariat) (YA/MEP)