BUMN Transformation Shouldn't Just Be All-Talk
JAKARTA – It's no secret that President Prabowo Subianto has ambitions to boost and stimulate the national economy to improve the welfare of the Indonesian people. This is reflected in his stated economic growth target of eight percent.
As a first step, President Prabowo initiated a transformation of State-Owned Enterprises (SOEs). The ratification of the fourth revision of Law Number 19 of 2003 concerning SOEs on October 2nd marked the birth of two giant entities that now control state corporations: the State-Owned Enterprises Regulatory Agency (BP BUMN) and the Daya Anagata Nusantara Investment Management Agency (BPI Danantara).
This decision was taken as a historic breakthrough aimed at strictly separating the functions of regulator from operator. The government argues that this separation is absolutely necessary to resolve chronic conflicts of interest and untangle bureaucratic tangles, allowing SOEs to operate more agilely and focus purely on business.
BP BUMN took over the role of the former ministry, acting as policy maker, managing SOE fiscal functions (such as subsidies and public service obligations/PSO), and holding political control through Series A Dwiwarna shares—golden shares with veto rights and absolute authority in appointing directors. Meanwhile, Danantara was established as a super holding company, controlling a majority of Series B shares, and focusing on investment management, portfolio development, and professional corporate action execution.
According to CISA Executive Director Herry Mendrofa, the establishment of BP BUMN and BPI Danantara reflects President Prabowo's ambitious ambition to stimulate the national economy. "The formation of these two bodies reflects President Prabowo's ambition. Regarding the dualism between Danantara and BP BUMN, I see this as a reflection of President Prabowo's ambitious ambition to accelerate the transformation of the national economy," he said.
However, he warned of the potential risk of serious overlapping authority. Institutionally, these two entities, both responsible for investment and development of state-owned enterprises, risk creating new bureaucratic complexities.
"We need to ask whether this is synergy or fragmentation? In the long term, without a clear and accountable governance design, this could lead to bureaucratic confusion and conflicts of interest between institutions," he added.
Transformation Must Begin with a Total Cleanup
This transformation of state-owned enterprises was highlighted by public policy observer Yanuar Rizki. He emphasized that before SOEs operate with a new structure, there must be a total cleanup, similar to the SOE reform in China through the establishment of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), which began with an Initial Balance Preparation Audit or a total investigative audit.
When China decided to completely overhaul its state-owned enterprises, it didn't just change the name or structure. The establishment of SASAC in 2003 was preceded by a massive cleanup operation. This rigorous and in-depth audit aimed to establish a clean and transparent opening balance. All past assets, liabilities, and potential losses were recalculated, separated from future financial statements, and publicly announced.
The goal was simple: SOEs under SASAC must start from scratch, without inheriting moral hazard and debt burdens resulting from corruption or mismanagement from the previous regime. Only fundamentally clean SOEs were permitted to be consolidated and professionally managed under the SASAC umbrella. This was an absolute prerequisite for building market trust and securing the integrity of the new entity.
"Well, this is what President Prabowo's administration should also be doing. What is the first task of the BP BUMN now? Restructuring SOEs. This includes sorting out which SOEs should merge, which should be acquired, which SOEs should be eliminated, and so on," Yanuar concluded.
Yanuar Rizki's concerns align with data from Indonesia Corruption Watch (ICW), which demonstrates the governance failures inherited by BP BUMN and Danantara. From 2016 to 2021, law enforcement officials investigated 119 corruption cases in SOEs. During that period, state losses reached Rp 47.9 trillion, with bribes valued at at least Rp 106.9 billion. The most frequently used method, fictitious reports, has implicated 340 suspects, of which 9 percent are SOE president directors and 83 are middle-level executives.
This is further exacerbated by the issue of meritocracy within SOEs. Data released by Transparency International Indonesia (TII) found a predominance of politicians in commissioner positions in SOEs. Of the total 562 commissioner positions in 59 parent state-owned enterprises and 60 subsidiaries, 165 are registered politically, 104 are party cadres, and 61 are political volunteers. Nearly half of these are members of the Gerindra Party.
TII (Indonesian Political Institute) noted that the Gerindra Party dominates SOE seats with a share of 48.6 percent. This figure far exceeds other parties, such as the Democratic Party (9.2 percent), Golkar (8.3 percent), and the Indonesian Democratic Party of Struggle (PDIP), National Mandate Party (PAN), and the Indonesian Socialist Party (PSI), which each account for 5.5 percent.
This fact prompted Fernando Emas, Director of the Indonesian Political House, to state that President Prabowo's steps to reform SOEs must be accompanied by a reshuffle of the board of commissioners, filling them with political party cadres. Without reform at the commissioner level, Prabowo's commitment to restructuring SOEs will remain merely a slogan without concrete evidence. "To prove that President Prabowo Subianto isn't just a slob, he must immediately reshuffle the board of commissioners, as it is filled with many politicians," he concluded.
He emphasized that although President Prabowo intends to improve the governance of SOEs, including by transforming the Ministry of SOEs into a Regulatory Agency, this structural step will not be effective without changes at the personnel level. "Prabowo must be consistent with his statements. Don't let the claim that SOEs have been managed like ancestral companies be a slap in the face," Fernando added.
He said that commissioner positions fraught with political interests hinder professionalism and transparency in SOE management. Therefore, he urged the President to take decisive action. "Immediately remove party cadres from SOE commissioner positions to demonstrate Prabowo's seriousness in restructuring SOEs," he asserted.
Avoiding All-Talk Transformation
Equally important, the change in nomenclature does not mean forgiveness for past sins. As is well known, the Ministry of State-Owned Enterprises has often failed to generate optimal profits or contribute significantly to economic growth. In fact, many SOEs are mired in problems, ranging from mounting debt to systemic corruption.
For example, under Erick Thohir's leadership, a number of SOEs have been plagued by serious problems, even implicated in major corruption cases. Examples include the Jiwasraya case (IDR16.81 trillion), Asabri (IDR22.78 trillion), Taspen (IDR1 trillion), and Waskita Karya (IDR2.5 trillion). Not to mention the corruption at Kimia Farma (IDR1.86 trillion) and Indofarma (IDR371 billion).
At the very least, through the fourth revision of the SOE Law, the Corruption Eradication Commission (KPK) is now given a stronger legal basis to uncover corrupt practices at SOEs, as the non-state administrator status for SOE directors and commissioners has been removed. They are now required to report their assets in the State Officials' Wealth Report (LHKPN).
"This law reaffirms the KPK's discretion and legal certainty in eradicating corruption in the state-owned enterprise sector, both in the context of enforcement and prevention," said KPK Spokesperson Budi Prasetyo.
He emphasized that asset transparency through the LHKPN will be a crucial entry point in corruption prevention efforts. Until now, the status of non-state officials has been a legal loophole that has weakened oversight of state-owned enterprise officials.
After the public has seen state-owned enterprises become a battleground for the nation's elite, it is time for President Prabowo Subianto to demonstrate his courage by resolving past sins, being firm against intervention, and prioritizing competence over self-interest. Because, if BP BUMN only becomes a new platform for old faces, politicians still sit in the comfortable chairs of commissioners and corruption is still rampant, then the transformation of BUMN will be just empty talk.
Conglomerate Aguan's National Strategic Project Removed from National Strategic Projects
The Pantai Indah Kapuk (PIK) 2 National Strategic Project (PSN) project, developed by the Agung Sedayu Group and owned by conglomerate Sugianto Kusuma, also known as Aguan, was removed by President Prabowo Subianto. The provisions for this removal are stipulated in Coordinating Minister for Economic Affairs Regulation Number 16 of 2025 concerning the Eighth Amendment to Coordinating Minister for Economic Affairs Regulation Number 7 of 2021 concerning Amendments to the List of National Strategic Projects.
According to VOI records, PIK 2 is included in the list of National Strategic Projects specifically for the tourism sector, as outlined in Coordinating Minister for Economic Affairs Regulation Number 12 of 2024, which was issued on October 9, 2024, during the administration of 7th President Joko Widodo (Jokowi).
After being removed from the national strategic project list, the project no longer enjoys the ease of permits and other facilities typical of a typical National Strategic Project. However, the project can continue. In fact, PIK 2 Tropical Coastland plans to develop an eco-tourism area with an investment of up to IDR65 trillion. The total green development area will cover 1,756 hectares (ha).