800 State-Owned Enterprises Targeted for Closure by End of 2026
President Prabowo Subianto has targeted some 800 state-owned enterprises (BUMN) deemed inefficient and persistently loss-making for closure by the end of 2026. The move forms part of an effort to rationalise the SOE sector so that the management of these ‘red plate’ companies becomes more effective and no longer burdens state finances.
Prabowo announced this while speaking at the inauguration of five dams in Indonesia on Lombok on Friday (10/7). He said the government has begun closing problematic SOEs in stages.
“We are putting this in order. By the end of July, 240 problematic SOEs have already been closed. By the end of this July, another 250 SOEs will be closed. By December 2026, some 800 inefficient SOEs — those that have never turned a profit and keep making losses — will be closed,” Prabowo said.
He revealed the overhaul came after he learned that the number of SOEs in Indonesia far exceeded his expectations. When he was first inaugurated, he assumed Indonesia had only around 300 to 400 SOEs. However, the data he received showed there were 1,077 SOEs, not counting subsidiaries and their downstream companies.
According to Prabowo, the sheer number of entities has made the management of state companies inefficient. He even suggested the layered corporate structures were often exploited to conceal the handling of state funds.
“As soon as I was inaugurated, I was told there were 1,077 SOEs. And there may well be daughter companies, granddaughter companies, even great-granddaughter companies besides. That was their way of hiding state money, hiding the people’s money,” he said.
He said the SOE clean-up is beginning to show results. Based on reports he has received, a number of red-plate companies that had been loss-making for decades are now starting to book profits.
“I also feel very proud. In recent days I have received reports on the results we are achieving. SOEs that have been dens of corruption for decades are gradually being fixed,” Prabowo said.
Beyond improving the performance of state companies, the government has also managed to cut various operational costs. Prabowo said savings from directors’ salaries and overhead costs alone amount to nearly Rp70 trillion.
Separately, he affirmed that the government has cancelled plans to sell a number of strategic SOEs to foreign parties. According to him, companies such as PT PAL, PT Pindad and PT Dirgantara Indonesia must instead be strengthened so they can support the national defence industry.
Prabowo cited PT PAL, which is now capable of producing high-tech warships, while PT Pindad has reportedly secured a contract from Saudi Arabia to produce weapons.
“The defence industry was originally going to be sold. PT PAL, PT Pindad, PT Dirgantara Indonesia were going to be sold. Now we are reviving these companies. PT PAL can now build magnificent warships. PT PAL will build sophisticated vessels. PT Pindad has won a contract from Saudi Arabia. All of Saudi Arabia’s rifles will be built by PT Pindad. Our weapons are proven,” Prabowo concluded.