Mohamad Faisal, Executive Director of the Centre for Reform on\nEconomics (CORE) Indonesia, believes that the programme of streamlining\nand rehabilitating State-Owned Enterprises (SOE) must be able to\nincrease efficiency, competitiveness, and confidence in SOEs to deliver\na real impact on the economy.<\/p>\n
Faisal stated that the government\u2019s target to cut the number of SOEs\nfrom approximately 1,077 companies to between 200 and 300 is a major\nstep that requires strong coordination between ministries and agencies.\n\u201cI see this as a policy with a significant impact that requires great\neffort. Because to perform streamlining through liquidation, divestment,\nrestructuring, or consolidation\u2014moving from 1,077 to 200-300\ncompanies\u2014is actually a massive undertaking,\u201d said Faisal when contacted\nin Jakarta on Monday.<\/p>\n
According to him, the government needs to anticipate various\ntechnical issues that may arise during the SOE downsizing process to\nensure the goals of the reform are achieved. He noted that he could not\nyet assess whether the target of reducing SOEs to 200-300 entities is\nrealistic, as it requires an analysis of the condition and performance\nof each individual company.<\/p>\n
Nevertheless, Faisal suspects the government considers that some SOEs\nare currently not operating efficiently or have overlapping functions,\nnecessitating restructuring. He reminded that SOEs are not solely\nprofit-oriented but also have the obligation to carry out Public Service\nObligations (PSO).<\/p>\n
Therefore, according to Faisal, the success of the streamlining\nprogramme cannot be measured solely by the reduction in the number of\ncompanies; it must also increase operational efficiency,\nprofessionalism, and the competitiveness of SOEs without reducing the\nquality of public services. \u201cFor example, whether it can later increase\nefficiency in SOEs, make them more competitive against the private\nsector and at a global level, and increase confidence in SOEs, depends\non how the process is executed,\u201d he said.<\/p>\n
Faisal added that if this reform can address the various issues\ncurrently faced by SOEs, the impact on the national business climate\nwill be positive. He noted that increased confidence in SOEs would\nencourage better synergy with the private sector to support economic\ngrowth. \u201cSOEs and the private sector should not be two entities pitted\nagainst each other, but can synergise. They can help each other in\ndriving economic growth,\u201d he said.<\/p>\n
The government has formed an SOE Streamlining Oversight Team\ninvolving the Attorney General\u2019s Office, the Audit Board of Indonesia\n(BPK), the Financial and Development Supervisory Agency (BPKP), and the\nMinistry of Law. The government aims to reduce the number of SOEs from\naround 1,077 entities to 200-300 companies through schemes of\nliquidation, divestment, consolidation, and restructuring. Following the\ndirectives of President Prabowo Subianto, the downsizing process is\ntargeted for completion by 2026.<\/p>\n
Donny Oskaria, Chief Operating Officer (COO) of Danantara and also\nHead of the SOE Supervisory Board, previously revealed that\napproximately 52 per cent of SOEs are still experiencing losses,\ntotalling Rp20 trillion. According to Donny, the SOE consolidation\nprogramme has the potential to generate direct savings of up to\napproximately Rp50 trillion through the simplification of corporate\nstructures and increased operational efficiency. However, he ensured\nthat the SOE downsizing process will not lead to layoffs (PHK), as all\nemployees will be retained and become part of the consolidated\ncompanies.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/economist-streamlining-of-state-owned-enterprises-could-boost-efficiency-and-competitiveness-1783338964", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }