Indonesia's President Prabowo Subianto has directed Danantara, the state asset fund, to redirect a portion of the dividends from state-owned enterprises (SOEs) back to the state budget. This policy aims to alleviate the burden of the state's record-high debt, which reached $655.6 billion (Rp 10.29 quadrillion) or 41.26 percent of gross domestic product as of June 30, 2026. This debt increased by Rp 1.8 quadrillion since Prabowo took office in October 2024.
Finance Minister Purbaya Yudhi Sadewa stated that the President's idea is to place a sum of Danantara's profits for government reserves to help reduce the debt. The policy is expected to take effect this year, but the specific amount and implementation timeline are still under discussion between the government and Danantara's CEO, Rosan Roeslani. Previously, SOEs remitted dividends directly to the state, totaling Rp 86.4 trillion ($4.83 billion) in 2024, before Danantara's establishment changed this arrangement to channel dividends into the fund for expansion and reinvestment.
The re-routing of dividends back to the state budget is seen as a strategy to increase revenue efficiency and contribute to a more sustainable budget. While the exact amount is not yet disclosed, the funds are already available and are currently considered government reserves, not yet factored into the 2027 non-tax revenue target. President Prabowo also mentioned receiving a report indicating Danantara's revenue increased by approximately 400% in its first year, though this figure requires auditing. The government reassures that this move is not due to fiscal distress, as there is a buffer of Rp 400 trillion in banks.
