JAKARTA – State-Owned Enterprises (BUMN) Minister Erick Thohir received the ‘The Most Influential Minister 2020’ award at the CNBC Indonesia Award. We consider its performance in streamlining and streamlining Indonesian SOEs crucial in boosting the economy. After being “dwarfed” in the 1998 monetary crisis, now in the midst of a pandemic crisis, BUMN Minister Erick Thohir strengthens his presence with sectoral consolidation and holding.
With 142 BUMNs, more than 700 children and grandchildren of their businesses. Not all of them are profitable or become companies on a global scale. 17 companies contributed more than Rp 180 trillion net profit from SOEs alone. With a share of 75 percent.
This overlapping operation not only triggers the inefficiency of BUMN performance. But also industrial inefficiency because instead of creating one or two large global scale companies. BUMNs become home players that dominate the local market and ‘squeeze’ the private sector.
Not surprisingly, the discourse on formation of a super holding put forward by President Joko Widodo. When he entered his second term of leadership. If the management of BUMN becomes more efficient. Then there will be a BUMN company that is large enough to be able to expand abroad.
Obtaining the Mandate for the Health of BUMN
Erick Thohir then carried out the mandate to tidy up, make efficient and healthy BUMN management, towards a super holding. The most symbolic breakthrough related to that is the breakthrough in tidying up the Ministry of BUMN’s body first.
Two days after being appointed, Erick appointed two deputy ministers namely Kartika Wirjoatmodjo (former President Director of PT Bank Mandiri Tbk) and Budi Gunadi Sadikin (former President Director of PT Inalum), cutting the number of deputies from seven to three.
Most surprising of all. Erick formed an inspector general at the Ministry of BUMN to carry out the supervisory function and good governance. This is the first time this has happened in the history of managing state-owned companies in this republic.
After that, he cleaned up PT Garuda Indonesia Tbk, by removing five of its directors following the smuggling scandal of Harley Davidson and Brompton motorbikes, which estimated to have cost the state Rp. 1.5 billion.
The fireplace for BUMN as a whole begins with a moratorium on the establishment of BUMN subsidiaries as stated in letter number SK-315 / MBU / 12/2019. Erick closed 51 children and grandchildren of state-owned companies owned by Garuda, PT Pertamina, and PT Telekomunikasi Indonesia Tbk (Telkom).
Then, the consolidation was carried out with the formation of holding, including food SOEs (PTPN, Perum Bulog, and Rajawali Nusantara Indonesia / RNI), tourism SOEs (Garuda, PT Angkasa Pura I and II, Inna Hotel & Resorts, Sarinah, and the Indonesia Tourism Development Corporation. ).
Erick Thohir breakthrough as Minister of BUMN
Erick’s breakthrough in tidying up BUMNs did not stop even though the pandemic hit. In April he confirmed his program in the seven BUMN transformation agendas to pursue value creation, reduce the burden on BUMN bureaucracy, and optimize the handling of Covid-19.
According to an opinion poll by the Indonesian Public Opinion and Discussion Group survey institute. Erick’s performance, who is concurrently the chief executive of the Covid-19 Handling Task Force. Became the best-performing minister in the pandemic era, with a public satisfaction score of 5.9.
Erick also encouraged the progress of Islamic banking by realizing the merger of state-owned sharia banks, namely PT Bank Syariah Mandiri, PT Bank BNI Syariah and PT Bank BRI Syariah Tbk (BRIS). Investors responded positively to the policy so that BRIS shares shot up 300 percent to Rp.1,455 per share.
Most recently, Erick formed an ultramicro state-owned holding company that would oversee PT Bank Rakyat Indonesia Tbk, PT Pegadaian, and PT Permodalan Nasional Madani (PNM). We expect the three of them to launch an ultra-micro sector economy that has not optimized so far.
Also, read another news article here.