COVID-19 Makes SOEs Indulge In PEN

JAKARTA - Pagebluk COVID-19 causes enormous economic pressure and greatly affects the posture of the 2020 national budget (APBN). The APBN deficit is also based on the additional stimulus from the government for state-owned enterprises (BUMN).

Institute For Development of Economics and Finance (INDEF) economic researcher Abra Talattov said the government needed to be careful in providing stimulus through the national economic recovery program (PEN) for BUMN. This is because there will be complications in widening the APBN deficit.

"We need to be careful because there will also be complications in the widening of the deficit in the next three years," he said in a virtual discussion, Wednesday, June 10.

Abra said that the government, in supporting BUMN, needs to see the achievements or performance of BUMNs in the economy in the past few years. He also compared the contribution of BUMN net profit to Indonesia's total gross domestic product (GDP) from the latest data for 2014-2018.

According to Abra, BUMN looks more productive in 2018. Even so, profitability is still a record, where the ratio of BUMN net profit to national GDP tends to decline.

"If we look at several indicators, for example the ratio indicator of BUMN net profit to national GDP, the figure is relatively lower compared to 2014, at which time the contribution of BUMN net profit to national GDP was 1.5 percent. Then in 2015 it decreased by 1 percent, 2016 1 , 4 percent, 2017 1.4 percent, and 2018 decreased to 1 percent, "he explained.

However, said Abra, the contribution of BUMN to the State Budget from 2015-2018 continues to increase. According to him, prior to the COVID-19 event, SOEs were optimistic that they would donate more, but in line with current conditions it was hard.

"At first, Pak Erick said he was still optimistic that BUMN would contribute large dividends. But at the last meeting with the House of Representatives Commission VI, Mr. Erick admitted that it is difficult to achieve the target. Because the pandemic is pressing all sectors," he said.

According to Abra, the total assets of SOEs have also been relatively stagnant in the last two years, namely 2016 and 2017. When compared with other state-owned enterprises, quoted from PwC Strategy and Analysis in 2014, the contribution of Indonesian BUMNs to GDP is relatively small, only around 1.3 percent.

"Meanwhile, Temasek Holdings, which is an investment company by the Singapore Government, reached 5 percent, and Chinese BUMNs 3.1 percent," he explained.

Abra emphasized that on this basis the government must be careful in providing PEN funds for BUMN. This is important for the government to pay attention to so that there is no further widening of the APBN deficit. Moreover, in the last five months Indonesia has changed the posture of the 2020 State Budget three times.

The government has disbursed IDR 15.5 trillion as state capital participation (PMN), to SOEs affected by COVID-19. The assistance was given to four state-owned companies which were deemed feasible because it had an impact on the national economy.

According to Abra, the government must tighten supervision for the four state-owned companies that accept PMN. This is because the budget disbursed is quite large, so the company must be able to show an increase in performance by using 100 percent of the funds absorbed.

"Funds through PMN are quite large. The target usage must be reviewed. After obtaining the assistance, the performance of BUMN can be much better or not. I hope that it does not become a burden for the State Budget, not because BUMN is owned by the state when there is a problem and then looks up its hands at government, "he said.

Abra assessed that the realization of the PMN allocation with a large aid budget, in fact, not all BUMN funds can absorb up to 100 percent.

"Is this because the company itself or indeed because there are obstacles in the administration and bureaucracy to the Ministry of Finance," he explained.

According to Abra, there must be a strict feasibility selection for BUMN candidates who receive PMN. This is done so that the large budget that will be used is able to achieve the financial targets of state-owned companies.

"PMN this year is included in the PEN program, which has added to the APBN deficit," he said.

In other words, spending on SOEs is happening. In fact, a national disaster such as COVID-19 has even made SOEs even more spoiled by the splash of trillions of rupiah from the government in the pretext of national economic recovery.