Observer: The Indonesian Government Must Emulate Chinese SOEs In The Red Plate Company Development Method

Illustration. (Photo: Unsplash)

JAKARTA - BUMN observer from the University of Indonesia (UI) Toto Pranoto said that currently the list of major companies in the world has increased. Currently, Fortune magazine's list of the world's top 500 companies is dominated by Chinese state-owned enterprises (BUMN).

Toto assessed that the Indonesian government could imitate the efforts made by China in raising its state companies. One of them is by doing efficiency in BUMN.

Furthermore, Toto explained, the Chinese government carried out efficiency through the BUMN management agency in China, namely the State Asset Supervision and Administration Commission (SASAC).

"So I think since they carried out the fifth phase of BUMN changes in the era of 2012 to the present, they have made a lot of efficiency efforts, for example SASAC merged more than 20 BUMN companies so that the number of BUMNs was getting smaller," he said, in a virtual discussion, Friday, September 25.

According to Toto, state-owned companies in China are also really focused on carrying out their functions. Profit-oriented BUMNs focus on pursuing profits, while BUMNs assigned to public services continue to strive to provide good services to the community.

However, said Toto, to make SOEs focus on their functions, it requires the role of the government as owners of capital. The government's contribution in this matter is also important.

In addition, said Toto, SOEs in China have also reduced support for profit-oriented SOEs and shifted them to state-owned enterprises that are oriented towards public services.

"In this context, a lot of efforts have been made so that government support for profit-oriented commercial ones is reduced. Then the government will focus more attention on SOEs that provide public services," he said.

Toto assessed that due to efficiency and focus on the functions of each company, Chinese SOEs had succeeded in becoming global players. In fact, many have taken the floor on foreign stock exchanges.

"They have developed into global players. Some of them have also been listed in many world exchanges, in New York and in other places. So that they eventually develop into multinational companies," he explained.