Erick Thohir to Reshape State-Owned Enterprises’ Businesses

Summary

State-Owned Enterprises (SOEs/BUMN) Minister, Erick Thohir, planned to revamp state-owned enterprises’ lines of business to optimize their contributions to the Indonesian economy. Based on the ministry’s assessment, only about 9.1 percent of 142 state-owned enterprises could maintain and develop their current businesses; 6.3 percent needed business transformation, and a whopping 68 percent had to consolidate. On the other hand, the ministry would focus 8.2 percent of them on public services, and the remaining 8.2 percent would undergo divestments or mergers.

Erick argued that the change was necessary to increase state-owned enterprises’ effectiveness and efficiency in their operations so they could generate optimal profits. “A small portion will close the businesses, but we shall focus more on restructuring state-owned enterprises because, in the end, they must pay dividends to the state as much as possible. Unfortunately, the Covid-19 has eroded SOE’s performances significantly,” Erick stated in a virtual discussion titled “Indonesia Moving Forward” in Jakarta on Wednesday (5/20).

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