Prabowo dissolves 240 state firms and targets 800 more in Indonesia's SOE overhaul

Summary

Indonesian President Prabowo Subianto announced on June 24 that 240 underperforming state-owned enterprises had been dissolved, saving what he called "trillions of rupiah," and that his government was targeting closure of up to 800 more. The Ministry of State-Owned Enterprises has been formally dissolved: regulatory functions move to a new body, BP BUMN, while commercial oversight goes to Danantara, the sovereign wealth fund Prabowo Subianto established in early 2026. The goal is to consolidate Indonesia's approximately 1,100 state entities, many of them dormant or loss-making, into 257 streamlined firms. The government separately said it was pitching $121 billion in electric vehicle battery investment opportunities to international markets.

The split

ANTARA and official Indonesian outlets frame the reform as a clean fiscal and efficiency exercise. Nikkei Asia and regional business analysts have noted that Danantara has a mixed track record in its first months and that concentrating commercial oversight in a single sovereign fund without independent parliamentary review creates governance risk. No Indonesian opposition or civil-society outlet has yet published a detailed critique, but critics of the Prabowo government have previously raised accountability concerns about Danantara's structure and board composition.

By the numbers

• 240, SOEs already dissolved under Prabowo as of June 24
• 800, additional SOEs targeted for closure
• 1,100 to 257, the target consolidation range for state entities
• $121bn, Indonesia's EV battery investment pitch to global markets

Why it matters

Indonesia's SOE sector is among the largest in Southeast Asia by employment, asset value, and political patronage. Consolidation on this scale could redirect significant capital toward Prabowo's infrastructure and energy priorities, and signal to foreign investors that the government is cleaning up the balance sheet before the next round of sovereign bond issuance. But the transfer of oversight to Danantara without parliamentary checks means the accountability question moves with the assets.

What to watch

• Whether the 800-target dissolution gets a formal legislative timeline or remains an executive announcement without a binding schedule.
• Pushback from labour unions and civil servants at targeted SOEs, which could slow implementation or require severance legislation.
• Whether Danantara's portfolio performance in its first full year justifies the concentration of oversight.
• Whether foreign investors in SOE joint ventures are offered clear buyout or exit terms, or face drawn-out renegotiations.