Seven out of 47 State-Owned Enterprises (SOEs) have been reported to suffer significant losses and require corrective measures in the coming years.
The seven companies are Krakatau Steel, Bio Farma, Wijaya Karya, Waskita Karya, Jiwasraya, Perumnas, and Perum Percetakan Negara Republik Indonesia.
Regarding the losses of these seven SOEs, Dr. Eddy Junarsin, a lecturer at the Department of Management, UGM Faculty of Economics and Business (FEB UGM), shared his view that as state-owned enterprises, these companies should ideally be self-sustaining and profitable for the country.
However, the losses experienced by these seven SOEs raise questions about their status as enterprises.
“If the purpose of these enterprises is to serve the public, perhaps they should not be considered business enterprises,” Dr. Junarsin said on Tuesday (Nov. 19).
Dr. Junarsin cited Perumnas and Perum Percetakan Negara Republik Indonesia (PNRI) as examples of SOEs that should serve as public service agencies rather than business enterprises.
He suggested that restructuring efforts are needed to curb the losses faced by these seven SOEs. According to him, regrouping through the formation of holding companies in each relevant sector could improve efficiency and reduce operational costs.
“Perhaps they should be regrouped. So, like creating holding companies for each relevant sector, making them more efficient,” Dr. Junarsin said.
Dr. Junarsin mentioned that if an SOE cannot survive independently, it should be merged or integrated into a holding company. Merging these enterprises would streamline operational costs.
“I think the solution is to slim down operational costs or increase revenue,” said Dr. Junarsin.
However, increasing revenue may not necessarily lead to the desired outcome. Dr. Junarsin believes that adjusting the efficiency of operational costs is more feasible.
“If it cannot be improved, then restructuring is needed. That’s something we need to do in business,” Dr. Junarsin stated.
He considers the Minister of SOEs’ plan to reduce the number of state-owned companies from 47 to 30 a step worth trying. He believes this could have a positive long-term impact, especially if the consolidation of companies under holding companies is done properly.
Nevertheless, he also emphasized the importance of a thorough analysis regarding the effectiveness of the policy.
“It is certainly worth analyzing and trying, but whether it will succeed or not, we cannot answer,” he concluded.
The challenges these seven SOEs face present a significant issue for the government in ensuring the continuity of state enterprises’ operations.
Cost efficiency, regrouping, and structural reform are strategic steps that must be taken to reduce the burden on the state while improving the performance of these enterprises.
The government is expected to create financially healthier SOEs that can provide maximum contributions to the country.
Author: Rahma Khoirunnisa
Editor: Gusti Grehenson
Post-editor: Afifudin Baliya
Photo: Shutterstock