26 September 2023

INDONESIA: Under-performing SOEs to go

Start the conversation


The Indonesian Government has declared war against unprofitable State-Owned Enterprises (SOEs) with plans to merge some and liquidate others.

Deputy Minister for SOEs, Kartika Wirjoatmodjo (pictured), said all under-performing SOEs were currently under review, as the Ministry looked to figure out which should be merged and which should disappear altogether.

“The review will also determine which companies will focus their operations on public services, Mr Kartika said.

There are 142 SOEs at present, but about 70 per cent of their profits, which totalled Rp210 trillion [$A2.2 billion] last year, came only from 15 of them.

“We want to reduce the number of State-owned firms to 100 in order to improve efficiency. We are enlisting the help of the State-owned asset management company, PT Perusahaan Pengelolaan Aset (PPA) to help us do this,” Mr Kartika said.

“However, before the Ministry can make such big decisions, it has to wait on a new regulation that will give the Ministry broader managerial authority.”

Under current regulations, the Ministry must obtain permission from the Ministry of Finance to carry out liquidation, mergers and spin-offs of State-owned companies, as well as make capital injections into them.

Mr Kartika said the Ministry had called for greater powers last year so that it would no longer need to obtain approval from the Ministry of Finance to restructure State enterprises.

Jakarta, 7 February 2020

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.