Indonesia’s Bold Move: Over 750 State Firms To Be Closed In Major Reform

The Indonesian government will close more than 750 state owned enterprises by year’s end, President Prabowo Subianto said Friday, mulling the possibility of a special court to investigate “unproductive” boards.

“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.

Prabowo mooted the creation of “a special ad hoc court to investigate the management and boards going back 30 years, maybe.”

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

AFP