New regulation allows expatriates to lead Indonesian state firms as part of a wider reform for global competitiveness
President Prabowo Subianto has officially changed regulations to allow foreign nationals to lead Indonesia’s state-owned enterprises (BUMN), a historic shift aimed at transforming the country’s corporate governance to match international standards.
Foreign Professionals Can Now Head State Enterprises
Speaking at the Forbes Global CEO Conference 2025 in Jakarta on Wednesday, October 15, President Prabowo announced that he had personally amended the regulations that previously restricted foreign citizens from leading BUMN. “I have changed the rules so expatriates or non-Indonesians can head our state companies. I am very enthusiastic about this change,” he said during his dialogue with Forbes Chairman Steve Forbes at the St. Regis Hotel.
The policy marks a major liberalization step in Indonesia’s state enterprise management, signaling the government’s intent to open its corporate landscape to international expertise and practices.
Aligning BUMN With Global Standards
Prabowo emphasized that the move is part of a broader strategy to raise Indonesia’s BUMN to global standards in governance, efficiency, and talent quality. He underscored that leadership diversity could inject fresh management ideas and improve productivity across the state sector.
“I want our BUMN to be managed with international business standards — in governance, efficiency, and human capital,” Prabowo stated, encouraging Danantara’s management to “seek the best brains and talents.”
BUMN Consolidation Under Danantara
The President also ordered BPI Danantara, the government’s new state-asset holding entity, to rationalize and streamline Indonesia’s sprawling BUMN network. From roughly 1,000 companies, Prabowo aims to consolidate the number down to 200–240, to ensure leaner management and higher returns.
“Manage them with higher standards,” he urged, noting that the current return on investment of around 1–2% must be significantly increased to match global benchmarks.
Rosan Roeslani Backs the Vision
Head of Danantara, Rosan Roeslani, confirmed that 844 parent and subsidiary companies have already been integrated into the Danantara framework as part of this restructuring plan. He described the consolidation as both timely and constitutionally aligned with Article 33 of the 1945 Constitution, which governs Indonesia’s economic principles.
“The establishment of Danantara comes at the right time,” Rosan said during the Danantara Indonesia Town Hall in April, reinforcing Prabowo’s directive for reform-driven consolidation.
Boosting Efficiency and Investor Confidence
Economists view Prabowo’s decision as a pragmatic effort to inject global know-how into Indonesia’s public enterprises, many of which have long been criticized for inefficiency, overlapping mandates, and political interference. Allowing expatriate leadership could improve international credibility, attract investors, and raise operational transparency.
However, the policy is also expected to spark debate over national control and job opportunities for local professionals, requiring clear regulatory safeguards to balance openness with national interests.
President Prabowo’s bold decision to allow foreigners to lead state-owned enterprises represents a turning point in Indonesia’s economic management philosophy. If executed with integrity and accountability, the reform could redefine BUMN performance standards and project Indonesia as a globally competitive economic force in Southeast Asia.
Sources: Katadata.co.id (2025) , CNN Indonesia (2025)
Keywords: Prabowo Subianto, BUMN, Danantara, Expatriate Leadership, Corporate Reform, Indonesia
