State-Owned Enterprises Minister Erick Thohir attends a meeting at the House of Representatives in Jakarta on May 13. (BeritaSatu Photo/Ruht Semiono)

SOEs Urged to Focus on Countering Economic Impact From Covid-19


MAY 18, 2020

Jakarta. State-owned enterprises, or SOEs, should focus on mitigating the economic impact from the coronavirus pandemic, former SOE minister Dahlan Ishkan said on Monday.

"Indonesia is a huge country and we have so many institutions. We should divide up the tasks in human mitigation and economic mitigation. SOEs should focus on economic mitigation and let other institutions handle the social and health impact of the pandemic," Dahlan said in an online discussion.

The former minister said state-owned banks could play an essential role in mitigating the economic impact by extending credit tenors to ease the burden on companies.

Dahlan said the banks should also follow Bank Rakyat Indonesia's (BRI) example in securing a massive funding on low interest to continue giving loans to companies.

"State-owned banks should follow BRI's move to seek new funding so they can keep giving loans to companies without burdening themselves," he said.

The banks should also prioritize loans for exporters to help them survive the pandemic, according to Dahlan.

"We can't let the export business collapse. We will lose the network and access to international markets. The repercussions will affect everyone," he said.

According to Dahlan, more state-owned enterprises should focus on maintaining food security since it's the foundation of state security.

Another former SOE minister, Tanri Abeng, agreed with Dahlan, saying state-owned companies should be able to make Indonesia more economically resilient if managed professionally.

More SOEs should also issue global bonds to help prop up the rupiah.

"SOEs have more ability to attract foreign companies to invest in Indonesia since their corporate governance is much better than in private companies," Tanri said.

Didik J. Rachbini, a senior economist at the Institute for Development of Economics and Finance (Indef), said the pandemic could provide a momentum for SOEs to transform their conventional infrastructure into a digital one or to expand their existing digital infrastructure to all corners of Indonesia. 

"The State Power Company [PLN] should partner with [state-owned telco] Telkomsel and private internet providers to build and expand fiber-optic networks throughout Indonesia. Regional areas will need them desperately, especially for education since many are now studying from home," Didik said.

The economist said SOEs should also start setting aside some of their state-capital participation and use it to support micro and small-medium enterprises and provide medical and social assistance.

Didik also pointed out gas prices have remained high during the pandemic even though the price of oil has dropped dramatically. The economist said state energy company Pertamina should offer refunds to the public. 

"Or Pertamina can give away the profits to help the government fight the pandemic. They should discuss this option with the House of Representatives," he said.