SOEs yet to live up to expectations
SOEs yet to live up to expectations
The Jakarta Post, Jakarta
Despite a staggering combined income of Rp 495.2 trillion (some
US$53 billion) -- comprising 25 percent of the nation's combined
economic activity -- the performance of state-owned enterprises
(SOEs) has yet to live up to expectations, a seminar on good
corporate governance revealed last week.
In fact, the relatively weak performance of SOEs is one of the
factors to blame for Indonesia's poor showing in global business
competitiveness indexes, according to Gadjah Mada University
economist Sri Adingsih.
Quoting figures from the Office of the State Minister of State
Enterprises, Sri said that last year, of the 158 Indonesian SOEs
only 89 managed to book profits, contributing about Rp 9.1
trillion (US$973 million) to state coffers.
As for the rest, all suffered losses amounting to more than Rp
4.49 trillion, which Sri attributed mostly to "inefficiency,
complicated bureaucracy and politicization of the SOEs."
Worse still, "irregularities" were still rampant. In 2004
alone, SOE losses due to "misuse" of funds amounted to about Rp 1
trillion.
This misuse and inefficiency caused the country's
competitiveness index to lag well behind its East Asian peers,
Sri added.
Last year, the World Economic Forum ranked Indonesia 44th out
of 104 countries in terms of business competitiveness, placing it
way below Singapore (ranked 10), Malaysia (23), Thailand (37) and
Japan (8).
"Overall, the performance of SOEs is far from satisfactory.
Over the years, not much progress has been made our SOEs," said
Sri.
Even though 89 SOEs returned dividends, 75 percent of SOE
profits came from a handful of firms such as telecommunications
firm PT Telkom, Bank Mandiri, Bank Negara Indonesia (BNI), Bank
Rakyat Indonesia (BRI), oil company PT Pertamina, fertilizer
producers PT Pupuk Sriwijaya, PT Jamsostek, gas distributor
Perusahaan Gas Negara (PGN), port operators PT Pelindo II, and
health insurer PT Askes.
Separately, a member of House of Representatives' commission
XI Drajad Wibowo said that SOEs' return-on-assets (ROA) in 2003
was only 1.68 percent, a decline from the 2002 figure of 1.72
percent. He said rough calculations showed that if ROA in 2003
had increased to 4 percent, SOEs would have contributed some Rp
13.5 trillion to the state budget.
Panelists at the seminar outlined several ways that SOE
productivity could be boosted, including the appointment of
independent and professional managers, implementation of good
corporate governance principles, increasing transparency, as well
as building more effective public supervision mechanisms. (003)
State-Owned Enterprises Financial Performance
(rupiah billions)
2001 2002 2003 2004*
No. of SOEs 150 158 157 158
No. unprofitable SOEs 48 58 54 31**
Total losses 2,222 9,589 6,081 4,492
No. profitable SOEs 102 100 103 127
Total profits 18.448 25.665 25.611 29.428
Total assets 810.419 935.587 1,163.644 1,177.755
Total debts 678.783 662.539 761.507 695.831
Source : Office of the State Minister of State Enterprises
* unaudited
** six companies have not reported and are assumed unprofitable