SOE Transformation Is Considered A Pillar Of The National Economy Fundamental

Illustration. (Photo: Doc. Antara)

JAKARTA - Senior Economist Fauzi Ichsan revealed the vital role of SOEs in supporting the national economy. According to Fauzi, in the midst of monetary limitations and fiscal ammunition, the role of SOE and private investment is vital in supporting economic growth.

SOE investment is the main pillar in addition to domestic consumption. The investment in SOEs and domestic expenditures that Fauzi considers to be the backbone of current economic growth.

"To ensure that domestic consumption does not alone help the Government's spending in economic growth, investment, both private and BUMN must be increased not only at the level, but also at productivity or effectiveness in boosting economic growth," said Fauzi in his statement, Wednesday, June 12.

As one of the main pillars, SOE investment must be productive and effective. Fauzi assessed that SOEs have encouraged an increase in more productive and effective organizations through a number of transformations carried out in the last five years.

For example, how SOEs carry out a massive transformation under the leadership of the Ministry of SOEs. The transformation is carried out still in solving a number of complicated problems.

"The momentum for economic transformation, especially in the BUMN sector, has been triggered by the Covid pandemic crisis in 2020. In essence, in the last 4 years, the transformation and restructuring in the BUMN sector has been successful," said Fauzi.

He detailed a number of successful SOE transformations, including solving long-standing structural problems involving SOEs. This problem then hampers the productivity and effectiveness of SOEs. This is like a problem in BUMN works, insurance, and high-speed trains.

"(BUMN) resolves complicated legacy and structural issues such as the Jiwasraya, Jasindo, Garuda problems, several Karya companies, high-speed trains, and so on. The steps that have proven successful in limiting the burden on the state budget," said Fauzi.

Not only that, BUMN is also transforming the company's governance. Fauzi appreciated the firm transformation carried out by SOE Minister Erick Tohir by closing SOEs that experienced systemic failures due to alpa implementing good corporate governance in the past.

According to Fauzi, the success of the SOE transformation has been recognized internationally.

"This success is not only recognized nationally, but also received appreciation from leading international financial institutions such as the Asian Development Bank (ADB), the World Bank, the International Monetary Fund (IMF), and the Organization for Economic Co-operation and Development (OECD)," he said.

Through transformation and restructuring, said Fauzi, the performance of the SOE sector has improved. This is proven by increasing profits and, paying taxes and dividends to the State treasury.

"In addition, the growth of the BUMN sector helps absorb labor, which had slumped due to the Covid pandemic," he said.

Fauzi also detailed the vital contribution of SOEs to the state treasury. According to him, the payment of taxes and dividends from SOEs to the State treasury has strengthened the fundamentals of the national economy.

"For example, the BUMN sector has contributed 20 percent of total state revenue in 2022, which comes from taxes, PNBP, and dividends. This success not only increases investor confidence, but also strengthens Indonesia's economic fundamentals," said Fauzi.

Fauzi assessed that reform and transformation of the BUMN sector had become part of the most important solution to the national economy that had been hit by a pandemic.

"Through the transformation of the BUMN sector, the culture of professionalism will continue to strengthen among economic actors, as capital to go to Indonesia Gold, 2045," he said.