Berliner Tageblatt - Indonesia to close more than 750 state-owned enterprises

Southeast Asia's biggest economy has long battled corruption in its public and private sectors despite strengthening anti-graft laws, creating special investigative commissions and arresting several high profile people.

"There are far too many unproductive state-owned enterprises, always reporting losses while claiming profits -- those profits are just made up," Prabowo said in his state of the nation address to parliament.

With the establishment last year of Indonesia's Danantara sovereign wealth fund to manage state assets, "we discovered that there are 1,074 state-owned enterprises," the president told lawmakers.

"I had thought there were 300 or 400 state-owned enterprises, but it turns out there are 1,074. And these state-owned enterprises sometimes operate as they please, with no sense of responsibility to the nation, to the state."

So far, 290 have been closed, Prabowo added, and by December 31, there should be no more than 300 left.

"We will close more than 750 enterprises and retain only those that are productive, those that create added value for the people," the president added, in what "may be the largest corporate restructuring in the world."

The drive has already saved about 50 trillion rupiah (more than $2.8 billion) in overhead costs, including directors' and commissioners' salaries, building and car rentals and business travel, said Prabowo.

The target for this year was to save more than 70 trillion rupiah.

Thanks to "improvements" in how state-owned enterprises are managed, profits rose more than 75 percent from 2024 to 326 trillion rupiah last year, the president said.

- 'Improvements and efficiency' -

Prabowo mooted the creation of "a special ad hoc court to investigate the management and boards" of state-owned enterprises "going back 30 years, maybe."

But he also asked lawmakers to consider a kind of "special amnesty for those who repent."

Indonesia scored a low 34 out of 100 on Amnesty International's Corruption Perceptions Index for 2025.

Graft has also been a rallying cry for protesters decrying rising living costs as Indonesia and the region reels from high oil prices caused by the Middle East war.

One project that comes in for particular criticism is the costly free school meals programme, Prabowo's signature project which he vowed Friday to pursue "but with improvements and efficiency."

"We cannot accept that one in four Indonesian children suffer from stunting," the president said.

Despite global uncertainty, Prabowo insisted the country was food and energy secure and said he was "confident" economic growth would reach 6.0 percent by the end of 2026.

GDP came in at 5.3 percent in the second quarter of the year, following on 5.6 percent in the first, though analysts have repeatedly expressed scepticism about Indonesia's official growth data.

"Growth and investment are not the ultimate goal," Prabowo said Friday.

"Our goal is the prosperity of our people... Every rupiah of investment must create jobs and improve the quality of life of our people, especially those at the bottom."

A.Gasser--BTB