Budi Gunadi Sadikin Wishes: If All SOEs IPO, Indonesia Will Beat Temasek

Deputy Minister of State-Owned Enterprises (BUMN) Budi Gunadi Sadikin. (Photo: Ministry of BUMN)

JAKARTA - Deputy Minister for State-Owned Enterprises (BUMN) Budi Gunadi Sadikin revealed the potential for BUMN to beat Temasek. According to him, this can be done by conducting an initial public offering (IPO) of all state-owned companies.

Budi said, by conducting an initial public offering to all state-owned companies, he would get a large endowment fund, aka Sovereign Wealth Fund (SWF).

Currently, said Budi, the number of BUMNs has reached more than 100 companies with total assets reaching Rp. 8,000 trillion. These total assets even exceed government assets which are only Rp.6,600 trillion. With the revenues of all SOEs prior to the COVID-19 pandemic which could reach IDR 2,400 trillion, this amount is also equivalent to the State Budget (APBN).

Budi said, if it is assumed that all BUMN go public with the IDX sale to price ratio in normal times is around three to four times, from Rp2,400 trillion it is around US $ 165 billion. If multiplied by three, the total is about 480 billion US dollars. The proceeds, said Budi, were equal to or even greater than Temasek Holdings (Singapore).

"We like comparing SOEs with Temasek and Khazanah. 480 billion US dollars is equivalent or maybe bigger than Temasek. It must be bigger than Khazanah, which is SWF Abu Dhabi's class," he said in a virtual discussion, Tuesday, October 6.

Meanwhile, Norway's largest endowment fund aka Sovereign Wealth Fund (SWF) was US $ 1.2 trillion.

However, Budi admitted that in conditions such as the current pandemic, the performance of BUMNs could not be classified as good. Even so, he said, if SOEs work better their SFW funds will have the potential to grow bigger.

"Especially if BUMN has better performance. It could be 500 to 600 billion US dollars. Much bigger than Temasek. That's a fact about BUMN," he explained.

Budi said the contribution of BUMN and Ministries / Institutions reached around 30 percent of the total Indonesian economy so that it could help drive the economy. Even so, he said, in these difficult conditions economic recovery due to COVID-19 cannot only be done by the government.

"So in relation to COVID-19, for example, we want to improve the economy. It is difficult or impossible for this to be done only by the government. The government must be able to encourage private sector participation," he explained.