Faisal Basri: IDR 152 Trillion Stimulus For SOEs Is Too Big

Institute for Development of Economics and Finance (Indef) senior economist Faisal Basri. (Photo by: Ministry of Communication and Information)

JAKARTA - The government's efforts to disburse funds to state-owned enterprises (BUMN) through a stimulus of IDR 152 trillion in the framework of the National Economic Recovery (PEN) program are considered too large. Faisal Basri, senior economist at the Institute for Development of Economics and Finance (Indef), said that the amount of stimulus the government disbursed in the APBN for state-owned companies was greater than PEN for MSMEs.

"In fact, the sector most affected during the COVID-19 event was MSMEs. The stimulus for BUMN is too big," Faisal said in a virtual discussion, Monday, June 1.

Faisal explained, of the Rp152 trillion budget for BUMN, Rp25.27 trillion was disbursed to five state-owned companies in the form of government capital participation funds (PMN), including PLN, Hutama Karya, Bahana Indonesia Business Development, Madani National Capital, and Development. Indonesian Tourism.

Another Rp. 94 trillion was given as a form of compensation payment for Pertamina, PLN and Bulog. Furthermore, investment bailouts worth Rp32 trillion were given to Bulog, Garuda Indonesia, PTPN, PT Kereta Api Indonesia, Krakatau Steel, and Perum Perumnas with varying amounts.

Faisal also questioned this bailout. He suspects that the funds will be used to pay debts of state-owned companies that are almost due.

"For example, Garuda Indonesia, whose debt payment deadline of US $ 500 million fell this June. Not to mention Hutama Karya projects that are full of interests. This is a consequence of bad fiscal practices," said Faisal.

Faisal further emphasized that not all of the funds for the BUMN mentioned above were related to the prevention of COVID-19. He also regretted that the government policy did not focus too much on the sectors most affected.

"Apart from MSMEs, the agricultural sector for the food crop sub-sector suffered a blow because the growth was minus 10.31 percent. In 2019 the growth of food plants was recorded at minus 1.68 percent compared to 2018 which grew by 1.46 percent. Assistance is only given to temporary farm workers. For the food crop sub-sector itself, no budget is allocated, "concluded Faisal.

Previously, Minister of State-Owned Enterprises (BUMN) Erick Thohir explained about the injection of funds from the government of IDR 152 trillion to a number of state-owned companies deemed affected by the COVID-19 outbreak. Erick confirmed that most of the funds were payment of compensation to PT PLN (Persero) and PT Pertamina (Persero) related to fuel and electricity subsidies.

With this compensation payment, he said, the finances of the two companies could be helped in the midst of the COVID-19 crisis. Meanwhile, a small part of the stimulus is State Capital Participation (PMN) which will be used to carry out national strategic projects (PSN).

"For example, in the construction of the Trans Sumatra toll road that is being carried out by PT Hutama Karya. PSN must keep going, so that the economy continues to grow," said Erick.

Erick explained, the details of the government's stimulus funds to state-owned companies were divided into three scenarios, namely PMN, compensation payments and bailout funds.

Compensation payments are the largest in value, and are given to seven BUMNs totaling IDR 108.48 trillion. PT PLN (Persero) received IDR49.46 trillion, BUMN Karya IDR12.16 trillion, PT Kereta Api Indonesia (Persero) IDR300 billion, and PT Kimia Farma (Persero) IDR1 trillion. Then, Perum Bulog Rp. 560 billion, PT Pertamina (Persero) Rp. 40 trillion, and PT Pupuk Indonesia (Persero) Rp. 6 trillion.

For PMN, the government disbursed IDR 22.27 trillion in funds in 2020. The PMN was given to four BUMNs. First, PT Hutama Karya (Persero) amounting to IDR 7.5 trillion for the construction of the Trans Sumatra toll road. Second, PT Permodalan Nasional Madani (Persero) received IDR 1.5 trillion for MSME credit financing.

Third, PT Bahana Indonesian Business Development (BPUI) Rp. 6 trillion to guarantee people's business credit (KUR) and UMKM. Fourth, PT Indonesia Tourism Development Coporation (ITCD) of IDR 500 billion for the development of the Mandalika tourist area and preparations for MotoGP 2021.