800 State-Owned Enterprises Targeted for Closure by End of 2026

President Prabowo Subianto has targeted the closure of 800 state-owned enterprises (BUMN) deemed inefficient and persistently loss-making by the end of 2026. The move is part of a restructuring effort to make the management of state-owned companies more effective and to stop them from burdening state finances. Speaking at the inauguration of five dams in Lombok on Friday, Prabowo said the government has already begun shutting down problematic BUMN in stages. ‘We are cleaning this up. By the end of July, 240 BUMN that were not in order have been closed. We have closed them. By the end of this July, we will have closed 250 BUMN. By December 2026, we will have closed 800 inefficient BUMN, those that never made a profit and kept losing money,’ he said. He revealed that the restructuring was initiated after he discovered the number of BUMN was far larger than he had anticipated. Upon his inauguration, he thought Indonesia had only around 300 to 400 BUMN. However, data he received showed there were 1,077 BUMN, not including subsidiaries and sub-subsidiaries. Prabowo argued that the sheer number of entities made state company management inefficient, adding that the multi-layered corporate structures were often used to conceal the management of state funds. ‘As soon as I was inaugurated, I was told there are 1,077 BUMN. And there might still be subsidiaries, sub-subsidiaries, and great-grandchildren companies. That is their way of hiding state money, hiding the people’s money,’ he stated. He said the overhaul of BUMN is beginning to show results. According to reports he has received, several state-owned companies that had been losing money for decades are now turning a profit. ‘I also feel very proud. In recent days, I have received reports on the results we have achieved. BUMN that were hotbeds of corruption for decades are gradually being cleaned up,’ Prabowo said. Besides improving the performance of state companies, the government has also managed to cut various operational costs. Prabowo mentioned that savings from directors’ salaries and overhead costs alone amounted to nearly IDR 70 trillion. On the other hand, he stressed that the government has cancelled plans to sell several strategic BUMN to foreign parties. He asserted that companies such as PT PAL, PT Pindad, and PT Dirgantara Indonesia must instead be strengthened to support the national defence industry. Prabowo cited PT PAL’s ability to now produce high-tech warships and noted that PT Pindad has secured a contract from Saudi Arabia to manufacture weapons. ‘Previously, the defence industry was going to be sold. PT PAL, PT Pindad, PT Dirgantara Indonesia were going to be sold. We are now reviving these companies. PT PAL can now build great warships. PT PAL will build sophisticated vessels. PT Pindad got a contract from Saudi Arabia. All Saudi Arabian rifles will be built by PT Pindad. Our weapons are proven,’ Prabowo concluded.