BUMN Streamlining: A Rational Move to Save State Assets?

The policy of the Daya Anagata Nusantara Investment Authority (BPI Danantara) to cut the number of state-owned enterprises (BUMN) from more than 1,000 to around 200-300 companies is considered vital to reduce business overlap while strengthening the focus of state companies. Nagara Institute Executive Director Akbar Faizal stated that input from a roundtable discussion titled ‘Hundreds of BUMN Forcibly Closed, the Last Bet to Save State Business Units’ would be compiled as recommendations for President Prabowo. ‘We will compile a book with critical notes to be submitted to the president,’ Akbar said in a written statement in Jakarta on Thursday. He stated that this process is a necessity so that criticism of government policy is accompanied by a deep understanding of the problems facing BUMN. Akbar assessed that the agenda of cutting BUMN could be a momentum to improve the structure of state companies comprehensively. ‘With proper consolidation, BPI Danantara has the opportunity to reduce redundancy, strengthen performance, and optimise the contribution of state assets,’ Akbar said. Public Policy Observer from Paramadina University, Wijayanto Samirin, stated that the decision by BPI Danantara to close irrelevant entities is a precise step. For him, the problem with BUMN so far lies in the difficulty of closing entities that no longer have business relevance. ‘When the government formed Danantara to cut and close the irrelevant ones, this is a very appropriate step,’ Wijayanto said. Member of Commission VI of the House of Representatives, Gde Sumarjaya Linggih, assessed that the formation of BUMN must fundamentally have strategic reasons and a development function. He explained that the state needs to review entities that run businesses which the private sector is already capable of handling. Demer, as Gde Sumarjaya Linggih is familiarly known, explained that BUMN in the past were formed based on security needs, business scale, government assignments, and the development of underdeveloped regions. This framework is very important as a reference when BPI Danantara restructures the national BUMN.