It’s Time Indonesia Hired Actual Experts to Run Its State-Owned Enterprises
Indonesia’s SOEs stay trapped in a cycle of patronage and inefficiency. Real reform means hiring global experts and actually letting them lead.
Indonesia’s State-Owned Enterprises (BUMNs) are, by the government’s own admission, bloated, inefficient, and riddled with underperforming assets. In any other system, that would spark emergency action. In Indonesia, it sparks job rotations, ribbon cuttings, and maybe a soft-launch of another committee. Enter Danantara, a newly minted sovereign fund with the unenviable task of cleaning up a portfolio that’s been feeding on budget bailouts and polite denial for years. Their first act? Shrink the SOE herd from one thousand to two hundred. Easy.
In theory, Danantara will usher in “global standards.” In practice, it’s yet unclear whether we’re getting international-grade reform or just the same names with a quick rebrand. Foreign leadership might be allowed, though one suspects only if it doesn’t ruffle too many uniforms.
This is a G20 country, with enormous potential and real ambition. But its state firms still behave like private clubs run by cousins and classmates. Roles are recycled, not earned. Results are optional.
Maybe the time for nice talk is over. Maybe it’s time to bring in outsiders… actual professionals, not more honorary uncles, and let them do what insiders have failed to do for decades: fix the thing.
Meet the New Boss, Same as the Old Boss
If you’ve ever played “CEO Roulette” in Indonesia, you’ll know the rules:
Qualifications optional,
Loyalty required,
Outcomes irrelevant.
The prize? A multi-billion-dollar state enterprise with fuzzy books and generous credit lines. Spin the wheel, and next thing you know, the former head of a toll road operator is now running an airline. Because why not?
This has been the reality for Indonesia’s SOEs over the past decade. The leadership pipeline isn’t a pipeline at all. It’s a carousel. Garuda, PLN, Pelindo, Waskita Karya... all have been passed like hot potatoes between a cozy network of bureaucrats, ex-military officers, and well-connected business types. Experience in the actual sector is optional, as long as you “play nicely” with the right people. Asking difficult questions about, say, whether the airline actually needs 50 new planes? That’s how you don’t get invited back.
Garuda Indonesia is the high-profile disaster that keeps on giving. Since 2014, six CEOs have tried (and mostly failed) to do something other than crash the balance sheet. We’ve seen smuggled motorbikes, corruption convictions, and enough procurement scandals to fill a Netflix docuseries. The outcomes have been predictable: bloated fleets, eroded trust, another restructuring, and (as always) a bailout.
And yet, here we are in 2025, with Garuda again in “turnaround mode,” now led by a three-star general who’s never run an airline but happens to be close to the President. Helping him are two foreign executives, imported to consult, advise, and presumably nod quietly while major decisions are made elsewhere.
It’s the same pattern. As long as leadership appointments serve as rewards for loyalty rather than mechanisms for competence, the results won’t change.
The Case For Foreign Leadership
Other countries have figured out that hiring qualified professionals, regardless of their passport, can lead to actual results.
Take Emirates. For decades, it has been helmed by a Brit, Sir Tim Clark, who helped transform a small desert airline into a global giant. No scandal, no smuggled motorcycles, just decades of commercially sound decisions and operational excellence.
Etihad brought in Antonoaldo Neves, a Portuguese airline veteran, who recently delivered the highest profits in the airline’s history.
Singapore’s DBS Bank appointed Piyush Gupta, an Indian national, back in 2009. Today, it’s one of the most respected financial institutions in Asia.
These are not radical states throwing tradition out the window. In many cases, they’re more conservative, more centralised, and more politically sensitive than Indonesia. Yet, when it came time to professionalise state-owned assets, they opted for performance. They made room for competence. Not out of sentimentality, but because it works.
Indonesia has now technically opened the door. New regulations allow for foreign SOE leaders, if the right permissions are granted. And while Garuda has indeed brought on two foreign professionals (one from Singapore Airlines), they remain firmly not in charge.
Indonesia still hesitates to let outsiders take the wheel. Not because they can’t do the job, but because they might actually do it too well. And that could threaten the real product some SOEs have quietly specialised in: control, not performance.
Until that changes, don’t expect global results from what is still, at its core, a domestic appointment game.
If You Really Want Change, Change the Operating System
You cannot slap a foreign name on the door and call it reform. Hiring a global executive without changing the wiring underneath is window dressing. Real reform needs a different operating system, one that actually lets leaders lead instead of drowning them in signatures, approvals, and “coordination meetings.”
Countries that have pulled off successful state-owned turnarounds share the same traits.
Authority. Their CEOs have real decision rights. They can approve procurement, restructure departments, and fire the incompetent without begging five ministries for permission.
Political insulation. Investment decisions are based on data and demand, not on which trade partner needs appeasing this quarter.
Market-level compensation. A global airline executive will not work for a salary designed for a mid-tier bureaucrat. If you want commercial results, pay commercial rates.
Time. One-year CEO rotations serve political calendars, not transformation plans. Real change requires at least a full business cycle to take root.
Transparency. Procurement details, KPIs, and outcomes published in plain sight. The countries that do this do not rely on speeches about integrity; they use spreadsheets.
Without these guardrails, even the most capable foreign expert will be swallowed by the machinery of bureaucracy and politics. Indonesia has a governance deficit dressed up as nationalism. Until the structure changes, every imported savior will end up as a headline, then a footnote in the long list of promising reforms that died in committee.
Why We’re Still Spinning in Circles
The Indonesian SOE system is not broken. It is remarkably consistent at doing exactly what it was built to do: protect status, recycle insiders, and absorb failure without consequence. What looks like dysfunction from the outside may actually be the design feature that keeps the whole thing humming, for the right people.
Think about it.
A well-connected figure is appointed to run a company they are only vaguely familiar with.
Targets are vague, but confidence is high.
A few procurement deals are rushed through, a flagship initiative is launched, and eventually, things fall apart.
Budgets balloon, debt piles up, the planes stop flying on time, the projects go over cost.
And then, right on schedule, the CEO resigns and lands softly somewhere else. Perhaps as an advisor. Or commissioner. Or head of another company where the same will repeat.
Garuda alone has been bailed out or restructured multiple times in the last two decades, including a court-supervised haircut of nearly $10 billion. The question is not how these companies survive. It’s how the same approach keeps being considered viable.
And while this internal logic might work for domestic comfort, it’s a hard sell to the outside world. Foreign investors don’t want to decode internal power games or guess who is secretly pulling the levers behind the scenes. They want predictability, transparency, and a sense that when money is invested, it won’t be swallowed whole by someone’s cousin’s side project.
As Indonesia seeks to move up the global value chain, this model becomes the biggest drag on its ambitions. Global capital runs toward systems where performance matters more than proximity. And right now, that isn’t what the carousel is offering.
Indonesia’s State-Owned Enterprises need foreign expertise. Not in perpetuity, not as colonial saviors, but as a necessary intervention. The current model has produced little beyond rotating résumés and large holes in the national budget. If the goal is real performance, then it’s time to bring in people who have actually delivered results in environments where performance is non-negotiable.
That means
Operators who have run major airlines, overhauled state utilities, or built globally competitive financial institutions.
People who aren’t auditioning for a ministerial post or massaging political egos.
People who know how to hire, fire, restructure, and deliver returns without side-hustling in shady procurement.
But bringing them in is not enough. You also have to let them lead. That means handing over real decision-making authority, insulating them from political interference, and backing them when the reforms start to pinch. Because they will. And that’s the point.
Indonesia does not lack smart people. It lacks systems that reward them. Until that shifts, and until results matter more than connections, the same problems will keep resurfacing, in slightly different packaging.
So yes, bring in the adults. But this time, let them do the job. And if we’re still here in five years having this conversation again, it won’t be because nobody had the answers. It’ll be because someone made sure the wrong people stayed in charge.
At StratEx - Indonesia Business Advisory we partner with boards and investors to identify, onboard, and protect transformative leaders. Contact us to break free from legacy hiring patterns and build leadership pipelines that serve performance,