Published on September 18, 2025, by The Jakarta Post
Experts view the empty minister’s seat as evidence of the ministry’s waning purpose, as many of its former responsibilities have moved to Danantara, the country’s state asset fund now in charge of nearly 900 state firms.
By Ruth Dea Juwita
The State-owned Enterprises (SOEs) Ministry was left without a leader on Wednesday when President Prabowo Subianto reassigned Erick Thohir to the role of youth and sports minister.
State Secretary Prasetyo Hadi said the government was still weighing candidates to replace Erick and that a caretaker might be appointed in the interim.
Erick had served as SOEs minister since his 2019 appointment by then-president Joko “Jokowi” Widodo. His transfer fills a post that had been vacant for a week in what marked Prabowo’s first major cabinet reshuffle.
“A definitive SOEs minister has not been named, because we are still searching for a successor following Pak Erick’s move to the Youth and Sports Ministry,” Prasetyo told reporters after the inauguration, adding that a temporary replacement could come from among the three deputy ministers currently in office.
The SOEs Ministry has three deputy ministers: Kartika “Tiko” Wirjoatmodjo, Dony Oskaria and Aminuddin Ma’ruf. Dony currently also doubles as chief operating officer at Danantara, leaving only Kartika and Aminuddin fully focused on ministerial duties.
Prasetyo dismissed speculation that the vacancy could accelerate plans to fold the SOEs Ministry into state asset fund Danantara, noting that the idea existed but was not currently under consideration.
“Not yet. We’re still in the process. Danantara is currently working on restructuring management at our state firms,” he said.
“If at some point adjustments to the ministry are needed, we’ll see [to that] later.”
Danantara was created under a revised SOEs Law earlier this year to serve as both a sovereign wealth fund and holding company for nearly 900 state-owned firms.
Prabowo is banking on Danantara to achieve his 8 percent economic growth target by 2029 by managing all shares of SOEs and reinvesting the dividends into commercial projects.
Under Law No. 1/2025 on SOEs, Danantara enjoys sweeping powers as both a sovereign wealth fund and a holding company, managing dividends from all state firms, approving capital injections funded by those dividends, overseeing corporate restructuring such as mergers or spin-offs, forming new holdings and submitting investment and operational plans to the House of Representatives.
The SOEs Ministry, on the other hand, retained its role as golden-share holder and chief regulator, tasked with setting strategic policy, approving shareholder meeting agendas, supervising company data, evaluating performance, managing state equity stakes and appointing directors and commissioners, according to the law.
But despite the ministry holding regulatory and shareholder powers on paper, in practice Danantara has assumed many of those functions, including decisions on capital injections, initiating corporate mergers or eliminating commissioner bonuses.
“Day-to-day operations, like the appointment of SOE directors, are already handled by Danantara. The ministry’s practical functions are almost nonexistent,” said Deni Friawan, a researcher at the Centre for Strategic and International Studies (CSIS).
Deni told The Jakarta Post on Thursday that, in practice, nearly all operational decisions once made by the SOEs Ministry now rested with Danantara, leaving the ministry little more than a formal shareholder role.
“The absence of a minister shows that Prabowo does not see any urgency in filling the post, as the role is not critical,” he added.
Danantara’s functional overlap with the SOEs Ministry created “unnecessary redundancy,” Deni said, but he cautioned that abolishing or merging the ministry would be “politically and administratively complex.”
“Even if it were abolished, the process would take time, because of bureaucratic sensitivities, including layoffs and organizational restructuring. It won’t be easy and comes with its own consequences,” he noted.
Bhima Yudhistira, executive director of Jakarta-based think tank Center of Economic and Law Studies (Celios), said on Thursday that the vacant post suggested the ministry could be dissolved entirely.
Such a move would deliver budget savings while cutting costs and streamlining governance, Bhima added, though questions would remain over the fate of its staff.
“Supervision, planning and asset management functions for SOEs are already under Danantara’s authority. The SOEs Ministry can now be liquidated,” he told the Post.
“The real issue is what happens to its employees. The most likely option is to absorb them into other economic ministries.”
Danantara bill
The House Legislation Body (Baleg) on Thursday proposed including the Danantara bill and patriot bonds bill in the 2026 priority legislation program, paving the way for another legal foundation for Danantara.
Baleg chairman Bob Hasan said the revision was aimed at “tidying up the legal umbrella” for Danantara, which currently operates under the SOEs Law that was amended in February.
While Danantara is already referenced in the existing law, Bob said a stand-alone framework was needed to give the state asset fund “stronger and more independent authority”.
“Why is the Danantara [bill] in place? The purpose is essentially to tidy things up, to put it nicely,” Bob told a House meeting.
“The origins [of the Danantara bill] are from the SOEs Law, which contains clauses on Danantara. But now Danantara must stand on its own, because politically and legally, the management of state firms is shifting toward Danantara,” he continued, emphasizing that the bill was Baleg’s initiative.