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Prabowo wants SOEs to exit hotel sector
The presumptive president-elect's idea to privatize Indonesia's hospitality industry appears to have the tacit support of SOEs Minister Erick Thohir.
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Defense Minister Prabowo Subianto holds up his ink-stained fingers after casting his vote on Feb. 14 at a polling station in Bogor, West Java, during the 2024 simultaneous presidential and legislative elections. (AFP/Yasuyoshi Chiba)
P
rabowo Subianto has said he plans to privatize the hospitality industry by pulling out state-owned enterprises (SOEs) from the sector.
The incumbent Defense Minister, who is the likely winner of the 2024 general election according to informal tallies, said the country’s tourism industry was developed so it did not require state intervention.
“Tourism in the 1950s required the government to take a pioneering role, but now I think we should let the private sector be dominant,” he told reporters on March 5, on the sidelines of the Mandiri Investment Forum 2024.
"We don't need state-owned hotels. What do you think, Pak [Mr.] Erick? But I ask for your advice. I wish to take a sensible approach," he said, turning to SOEs Minister Erick Thohir who had joined him.
In response, Erick said each SOE used to manage a hotel, but these had been streamlined during his tenure so there were only 23 state-owned hotels at present, compared to 128 hotels previously.
In addition, state-owned hotels were now under the management of PT Hotel Indonesia Group (HIG), a subsidiary of state-owned hospitality holding company PT Hotel Indonesia Natour (HIN).
HIN controls 51 percent of HIG shares, while state-owned real estate firm PT Wijaya Karya Realty owns the remaining shares.
“We should look for partners [to replace SOEs] in the future. SOEs don’t have to exist in all [economic] sectors,” Erick added.
The minister said SOEs should fulfill three key objectives instead.
First, they should be financially sound businesses, given their role in contributing to state revenue through taxes and dividends.
Second, SOEs must be an active participant in developing the economy by investing in strategic sectors and creating jobs.
Finally, Erick said, SOEs should contribute to the people's economy.
