Profits surge 75%! Indonesia advances SOE restructuring, strengthens foreign exchange controls on coal and palm oil exports

On August 14, Indonesian President Prabowo Subianto delivered a state address speech at the Parliament Building in Jakarta. Prabowo stated that the Indonesian government will continue to advance the restructuring and reform of state-owned enterprises (SOEs), while simultaneously strengthening regulations on the export of strategic resources. This aims to improve the operational efficiency of SOEs, accelerate the layout of domestic resource downstream industries, and safeguard the country's natural resource revenues.

Large-scale Streamlining and Restructuring of SOEs

Relying on the state investment agency Danantara to conduct a screening, there are currently 1,074 SOEs and their subsidiaries nationwide in Indonesia, with many exhibiting prominent issues such as low operational efficiency and redundant management levels.

As of now, the government has completed the closure and liquidation of 290 inefficient SOEs, and plans to expand the number of shutdowns to a maximum of 300 by the end of 2026, reducing bloated state-owned entities through mergers and deregistration.

Prabowo introduced that this round of SOE reform has already shown results. In 2025, Indonesian SOEs achieved a total profit of 326 trillion Indonesian rupiah, equivalent to approximately 123.326 billion RMB, a year-on-year increase of 75.3%; dividends paid to the state amounted to 142.3 trillion rupiah, a year-on-year increase of 67%.

Subsequently, Indonesia will deeply integrate SOE reform with the national strategy of industrialization and resource downstreaming, focusing on implementing a batch of downstream industry projects such as coal deep processing, copper and gold smelting, industrial salt processing, and the extension of the aluminum industry chain, to promote local in-situ processing and value addition of resources.

Establishing a Dedicated Agency to Control Export Foreign Exchange for Strategic Resources

To plug revenue leaks in the resource export sector, Indonesia established the Indonesia Resource Company (DSI), specifically responsible for managing foreign exchange controls on the export of strategic bulk commodities.

The agency officially commenced operations on June 1 and has initiated supervision over three core strategic commodities: coal, palm oil, and ferroalloys, covering export foreign exchange worth approximately 14 billion USD, with a cumulative total of over 6,500 transactions monitored.

According to the plan, the DSI supervision network will subsequently expand to 50 ports across 25 provinces in Indonesia. The categories under supervision will also be gradually expanded to eventually achieve full coverage of all strategic export commodities, strengthening control over the entire export transaction process and ensuring the full repatriation of foreign exchange generated from resource exports.

Core Objectives of the Reform

The entire set of policies aims, on the one hand, to clear out loss-making and inefficient SOEs, improve the quality of state asset operations, and amplify the contribution of SOEs to public finance. On the other hand, it seeks to tighten control over natural resource exports, shifting away from the model of simple direct sales of resources and relying on downstream processing industries to increase added value. These are the two core focuses of Indonesia's current economic policy and will also impact the global trade patterns of bulk commodities such as coal, palm oil, and ferroalloys.