This week my team and I are being rotated to the BUMN [Badan Usaha Milik Negara or state-owned enterprise (SOE)]
During my time doing my work - which I find quite boring because what I do is just collecting data & information on CEO's profile of several SOEs and turning it into a short article in English - I've been thinking about SOEs in
So far the last effort is the most effective one. SOEs which have gone public are now among the top ten listed companies whose shares are the most liquid and actively transacted. These companies' losses have been able to remedy and now they almost never fail to make profits year in year out.
But of course, there are still many other SOEs which are helpless. SOEs such as PLN and Pertamina, for example, are notorious for their inefficiency and consistent net losses. The question is: Will and can these SOEs ever book profit?
Despite the basic problem such as corruption which has plagued SOEs and contributed to their high inefficiency, in my opinion some SOEs are inevitably cost centers. PLN, for instance, is expected to produce and or distribute electricity to households and manufacturers at affordable tariff because, if you remember our constitution article 33 verse 2, the state is supposed to protect and regulate the provision of goods and services which are related to the basic needs of the people of
Take another SOE like PANN Multifinance. This SOE never misses being listed as one of the top five SOEs which suffer losses every year. If you look at the business of the company, you’ll see why it has such poor performance.
PANN is basically a financing company. Rather than financing motorcycle purchase like nowadays regular multi-finance companies do, PANN helps finance the purchasing of ships. As you know, ships are like properties: it takes some time before we can sell one. So it’s no surprise if we find the company’s revenue and cash flow fluctuate like roller coaster ride.
I can mention you a list of SOEs which are burdensome to exist but they just have to exist. For the sake of providing goods and service which a normal private company won’t do, I say these SOEs deserve not to be dissolved. Why don’t we just admit it that some SOEs are simply cost centers?