Jokowi gives Indonesia state-owned enterprises 1-2 years to make fundamental changes

KUALA LUMPUR, March 14 -- President Joko Widodo (Jokowi) has given a period of one to two years for state-owned enterprises (SOEs) to make fundamental changes to increase their competitiveness.

On Oct 14, 2021, Jokowi stated he was pleased to witness the clustering of container terminal operator and port development firm Pelindo into one holding, which was PT Pelabuhan Indonesia, to cut logistics costs and help improve connectivity throughout Indonesia.

According to Jokowi, the clustering forms into one great power, as it builds networking with partnerships abroad. "Through partnering with overseas companies who have networks, the (SOEs') link to all countries can become a huge power," he remarked.

Through clustering, SOE companies have shown above-standard or even excellent work performance that has contributed significantly to the state budget.

In 2019, National Development Planning Board (Bappenas) data estimated total budget for infrastructure development in the period of 2020-2024 at US$447 million or Rp6,445 trillion, and 21 per cent of them came from or supported by SOEs. In the third quarter of 2021, the total assets of SOEs reached some US$610.5 million or Rp8,767 trillion, equivalent to some 57 per cent of Indonesia's GDP. (US$1 = RM4.196).

According to a statement, there are currently, 12 sectors that 41 SOEs engage in: energy, oil, and gas; mineral and coal; insurance and pension funds services; plantations and forestry; and telecommunications and media.

Meanwhile, the tourism, logistics, and support cluster consists of Hotel Indonesia, temple tourism managing firm PT TWC, which manages the temples of Prambanan and Borobudur and Ratu Boko, and Indonesia Tourism Development Corporation (ITDC).

State-owned Bank Negara Indonesia (BNI) also announced that it relied on clustering to strengthen the distribution of smallholder business credits (KUR), as well as to help boost the productivity of Micro, Small, and Medium Enterprises (MSMEs) during the COVID-19 pandemic.

On Feb 23, three state-owned companies agreed to collaborate on building green industry clusters in Indonesia that will prioritise the efficient and effective use of sustainable resources. The three state firms are electricity company PT Perusahaan Listrik Negara (PLN), oil and gas company PT Pertamina, and fertiliser company PT Pupuk Indonesia.

-- BERNAMA