Ilham Oktafian, Muhammad Farhan, Jakarta – The Indonesian government and parliament agreed Thursday to dissolve the Ministry of State-Owned Enterprises (SOEs), marking a major restructuring of state corporate governance as the country's new sovereign wealth fund, Danantara, assumes control of all state-owned assets.

Under the plan, the ministry will be replaced by a new agency, with its official name and structure to be determined by President Prabowo Subianto.

"The SOEs Ministry will be abolished and replaced with a new body. The designation and form will be decided by the President," said Andre Rosiade, Deputy Chairman of the House Commission VI overseeing SOEs, following a legislative session in Jakarta.

The decision came during deliberations on revisions to the SOEs law between the government and the House of Representatives. Lawmakers also approved the removal of a provision that had exempted SOE executives from being treated as state officials – a clause critics said had hindered corruption investigations.

Another key change grants the Supreme Audit Agency (BPK) authority to audit SOEs, a move expected to strengthen transparency and accountability in state enterprise management.

Andre said lawmakers aim to finalize the bill quickly so it can be submitted to a House plenary session for passage in the near future.

Danantara's expanding role

The move follows President Prabowo's earlier decision to reassign former SOEs Minister Erick Thohir to the post of Youth and Sports Minister, leaving the SOEs portfolio vacant. The absence fueled speculation that the ministry would be disbanded – speculation now confirmed by legislators.

House Deputy Speaker Sufmi Dasco Ahmad said the ministry's functions have largely been absorbed by Danantara, Indonesia's sovereign wealth fund.

"With Danantara in place, the role of the SOEs Ministry is now mainly that of a regulator and holder of Class A shares in SOEs," Dasco explained.

"Given these considerations, there is strong support to downgrade the ministry into an agency," he added.

Danantara, established as a sovereign wealth fund, now oversees the assets and operations of Indonesia's vast portfolio of state enterprises, signaling a shift toward centralized and professionalized management of national wealth. President Prabowo said last month that Danantara oversees assets worth more than $1 trillion.

Source: https://jakartaglobe.id/business/indonesia-to-disband-soes-ministry-amid-danantara-expansio