By: Ricky Rinaldi
The Indonesian government continues to strengthen the governance foundations of state-owned enterprises through the major step of establishing a State-Owned Enterprises Regulatory Agency. This initiative is seen as a crucial part of institutional reform, in line with the need to ensure that SOEs are not solely profit-oriented but also provide tangible benefits to national development and the welfare of the people.
In his directive, President Prabowo Subianto emphasized that the establishment of this institution aims to reorganize oversight mechanisms and clarify the division of roles. He stated that state assets must be managed transparently, accountably, and provide maximum results. This emphasis demonstrates the government’s vision of making SOEs not merely business engines but also strategic instruments in addressing the challenges of energy, food, and infrastructure security.
At the same time, public attention is also focused on the role of Rosan Perkasa Roeslani, currently Minister of Investment and Downstream Development and Chairman of Danantara. In his position, Rosan is at the forefront of ensuring Danantara becomes the primary node for managing the country’s strategic assets and investments. His role is increasingly crucial as synergy between Danantara and the State-Owned Enterprises Regulatory Agency will be key to the success of this reform.
Institutionally, the establishment of the SOE Regulatory Agency will bring significant changes. To date, the Ministry of SOEs has shouldered a dual burden: acting as policymaker, supervisor, and company manager. The previous model faced challenges in balancing business and public service roles, making the establishment of the SOE Regulatory Agency a strategic solution, particularly when balancing business demands with public service obligations. With the regulatory body, the division of roles will be clearer. The Ministry of SOEs can focus on business development strategies, market expansion, and digital transformation, while the new institution strengthens its oversight, governance, and state asset optimization functions.
The implications of this change are far-reaching. From a fiscal perspective, the government hopes that the establishment of a regulatory body will increase SOE dividend payments to the State Budget (APBN). Optimization of previously unproductive assets and investments can be maximized, thereby creating greater fiscal space to finance priority government programs. From an efficiency perspective, a clear division of roles will reduce overlapping authority, expedite decision-making, and enhance SOE competitiveness globally.
From a political economy perspective, this step also has strategic dimensions. Indonesia is striving to escape the middle-income trap by relying on industrialization, downstreaming natural resources, and strengthening its domestic production base. In this context, state-owned enterprises (SOEs) are a crucial instrument. With sound governance, SOEs will become more productive in driving industrialization and downstreaming. Institutional reform is a prerequisite for SOEs to play a truly productive role, not merely symbolic.
Danantara, as the state’s investment and asset management entity, plays a central role in this process. Since its inception, Danantara has been projected to become an institution equivalent to a sovereign wealth fund, capable of professionally accumulating and managing strategic assets. With Rosan Roeslani at the helm, Danantara is expected to build a global investment network while ensuring foreign capital flows align with national interests. Its synergy with the State-Owned Enterprises Regulatory Agency will ensure that every asset transferred to Danantara has a clear and measurable direction.
From a governance perspective, the establishment of the State-Owned Enterprises Regulatory Agency will also strengthen transparency. This institution is expected to provide a more open reporting system, stricter audits, and publicly accessible accountability mechanisms. This aligns with the government’s commitment to creating clean, transparent, and corruption-free SOEs. Strengthening governance is the foundation for SOE reform to not remain merely rhetorical but truly impactful.
However, institutional reform is certainly not without challenges. First, regulatory integration between ministries and agencies must proceed smoothly. The Ministry of Finance, the Ministry of State-Owned Enterprises, and the new regulatory agency must be able to establish solid coordination to avoid bureaucratic bottlenecks. Second, the human resources who will staff these regulatory agencies must be carefully selected to meet high professional standards. With professional human resources, these regulatory agencies will be able to ensure there are no leaks or inefficiencies.
Furthermore, there are challenges in maintaining a balance between public interest and business orientation. For example, state-owned enterprises in the energy sector must maintain price and supply stability while simultaneously being required to maintain profitability. This is where the role of the State-Owned Enterprise Regulatory Agency becomes increasingly apparent as a guarantor of the balance between public interest and business orientation.
From a long-term perspective, the success of the regulatory body will significantly determine Indonesia’s position in facing global competition. The world is moving towards a green economy, digitalization, and food security. If state-owned enterprises can adapt quickly and are supported by modern governance, Indonesia has a significant opportunity to emerge as a major player in Southeast Asia and even globally.
This optimism is not without reason. With strong political support from President Prabowo and technocratic leadership at Danantara led by Rosan Roeslani, the government possesses a combination of political vision and managerial capacity. If these two factors work together, the establishment of the State-Owned Enterprises Regulatory Agency will be a milestone in national economic reform.
Ultimately, the establishment of the SOE Regulatory Agency is not an end in itself, but rather a gateway to a new era of state-owned enterprise management. This institution will be a crucial instrument to ensure SOEs remain competitive, make significant contributions to the state budget, and become an integral part of the Golden Indonesia 2045 vision. With a strong institutional foundation, maintained transparency, and consistent political support, Indonesia has significant capital to realize its goal of becoming a developed nation in the next two decades.
*)Strategic Issues Observer