Indonesia To Close More Than 750 State-Owned Enterprises, How About Malaysia…

The news headline reads, “Indonesia to close more than 750 state-owned enterprises (SOE)”. The president mulled the possibility of a special court to investigate “unproductive” boards reporting “made up” profits and vowed to close 750 SOE by year end.

It is part of a battle against corruption in the public and private sectors despite strengthening anti-graft laws, creating special investigative commissions and arresting several high-profile people. Too many are making losses while claiming profits.

There are 1,074 SOE and the drive has already saved about 50 trillion rupiah. Improvements in managing SOE managed to increase profits more than 75% from 2024 to 326 trillion rupiah in 2025.

Will Malaysia do the same?

Malaysia broadly defines SOE as Government-Linked Companies (GLCs) and Government-Linked Investment Companies (GLICs), which span thousands of federal, state-level and subsidiary entities. There are a large number of programmes resulting in overlaps, duplication and administrative complexity.

Not forgetting, SOE also contribute significantly to Malaysia’s GDP, employment and market capitalisation.

Major challenges include political interference in board appointments, weak financial transparency, governance weaknesses with fractured accountability and high-profile mismanagement. Concentration of power where the Prime Minister also acts as Finance Minister, controls how leaders are picked and removed in top investment funds.

Many operate with a lack of sense of responsibility to the nation or state.

The Auditor-General’s 2024 Report said strategic decisions, including major investments and procurement, were sometimes made without proper board approval while financial reporting lacked transparency.

We have witnessed cases like 1MDB, Felda, HRD Corp and Tabung Haji.

We have gone through the “GLC Transformation Programme” introduced in 2004. In 2021, the then-Prime Minister launched the “Government Linked Company Strengthening Programme” which published the ‘Principles on Good Governance for Government Linked Investment Companies’ by the Ministry of Finance. Are they being adhered to?

Policy instruments or structural reforms may not be enough. Having a new Bill to regulate state-owned enterprises (SOE) and enforce strict corporate governance standards will tackle governance issues but what about productivity and profitability?

SOE must create added value for the people, monetary or otherwise.

The government must have the political will to ‘take the bull by the horns’. There needs to be a cleaning up.

Having done that, ensure ministers are accountable for SOE under their care and also stronger enforcement of competition laws by the Malaysia Competition Commission.

Only then, we can truly have a real battle against corruption and inefficiencies.

I am aware, this action will be politically-sensitive especially when the government is basking on the back of good headline economic numbers. On the other hand, nine million nationwide are receiving the Sumbangan Asas Rahmah (SARA) and Sumbangan Tunai Rahmah (STR) aid programmes.

Will the government still be relying on historical sentiment or have the political will to embark on an aggressive, coordinated and assertive plan to educate the rakyat on its action plans for a better future?

What say you…

Saleh Mohammed