Jakarta, Indonesia, February 27, 2022 /PRNewswire/ — The Indonesian president has myriad hopes and expectations for state-owned enterprises and has been keen to see them not only progress domestically, but also compete internationally.
The President believes that these companies hold vast potential to dominate critical sectors initially and also globally thereafter.
Public companies only need a professional boost and direction to help them thrive. Indeed, regardless of the size of a company, once it falls into the wrong hands, its development would stagnate and eventually die.
It is undeniable that to survive the current industrial revolution, companies must best prepare their human resources and their ecosystem. Business transformation associated with adapting to the latest technologies is inevitable.
Minister of Public Enterprises Eric Thohir talked about three big dreams for public companies, one of which was the greatest contribution of public companies to the nation.
“Again, if this is not just my wishful thinking, this is how to enable public companies to make a greater contribution to the country. This is number one,” Thohir wrote on his official Instagram account. @erickthohir here on Sunday (February 20).
The second aspiration is for the number of SOEs to be smaller but larger in terms of footprint while the third is about optimizing the role of SOE services to the community.
These three wishes have key performance indicators or KPIs.
Public enterprises were undergoing a massive, intense and continuous transformation.
It paid off as they made an income totaling Rp 96 trillion until the first half of 2021, and a net profit of Rp26 trillion up to June 2021.
In 2021, the minister said the SOE restructuring program is going well.
It turned out that things got more efficient when thinner. It reduced the number of clusters from 108 to 41 and from 27 clusters to 12. It includes the minerals and coal cluster, the forestry and plantation cluster, the food cluster, the health cluster, the finance cluster, the insurance cluster, the telecommunications, the infrastructure cluster, the logistics cluster. , and others.
Thohir’s ministry had reduced the number of companies it deemed too many and instead concentrated those that existed to incorporate more important things.
Among those undergoing transformation, the association of public banks has shown tangible results.
The minister said these banks made up to 78.06% profit in 2021, while remaining focused on their own segments. These include the BRI (Indonesian People Bank) which caters to MSMEs, the business-focused Mandiri Bank, the BNI (Indonesian State Bank) with its international reach and the BTN (State Savings Bank ) which offers financial services related to housing.
In detail, the association won approximately Rp 72,050,000,000,000 in profit by 2021, well above their collective profit in 2020, which at the time was capped at just Rp 40,340,000,000,000. BRI contributed 30.76 trillion rupees at the pool, Mandiri had Rp 28,030 billionINBs collected Rp 10.89 trillionand finally, BTN donated approximately Rp2.37 trillion.
Coordinator of Indonesian Millennials for MSMEs and Enterprises, Syahrul Ramadhanwelcomed the initiative of the minister who had encouraged these banks to obtain such achievements.
Under Thohir’s command, shoddy administrators were replaced by better ones in order to generate more profits for the state.
Additionally, a business model mapping was done because the public companies had so many businesses that no one even knew what their target industry was.
Deputy Head of Committee VI of the House of Representatives Martin Manurung supported the idea that adjustments in state-owned enterprises were still ongoing. Although there were issues here and there, overall everything was going well.
Indeed, the troubles of the past persisted, even though both Commission VI and the government were committed to improving the situation, as reflected in their meetings.
Manurung claimed that President At Joko Widodo’s (Jokowi’s) hopes for the future will be realized by a revision of the law on public enterprises, which is currently being prepared by his administration. He also praised Jokowi’s spirit to promote investment.
Government capital: the rules
Essentially, the commission and the ministry are in the same boat on some aspects of the quest to improve public enterprises. These include restructuring, holdings, clusters and investments, among others.
The commission also accepts some suggestions made by companies that have received government capital for corporate acts.
In some cases, discussions about the government capital cannot be avoided. Care should be taken to ensure that the capital is used to increase the productivity of the enterprise, thus providing significant contributions to the state in the form of dividends, taxes, etc.
It has often been emphasized that capital should not be used to cover losses caused by mismanagement.
President Jokowi drew attention to several companies that had received too much public capital as a means of protection. And this despite the fact that they did not make any significant contribution to the state.
The president gave a stern warning that no such case should happen again. In fact, he also suggested that dying businesses should be shut down immediately instead of being handed over public capital.
The president sought such action not out of malice or cynicism, but rather out of the spirit of seeing businesses succeed together, an expectation that hopefully did not turn into a mere dream.
SOURCE Ministry of Public Enterprises