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SOEs’ financial losses hurt overall economy
With profits at state-owned enterprises falling drastically in 2020, the Indonesian government lost out on tax revenue and dividends and had to inject extra capital to help some firms get back on their feet.
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SOEs Minister Erick Thohir (foreground) and Deputy SOEs Minister Pahala N. Mansury (background) launch the Indonesia Battery Corporation (IBC) in Jakarta on March 26. (SOEs Ministry/Aldi)
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et profits at state-owned enterprises (SOEs) plummeted by an estimated 77 percent to Rp 28 trillion in 2020 as the coronavirus pandemic led to mobility restrictions and hit household spending.
SOEs are also estimated to have suffered a drop in revenue of around 25 percent to Rp 1.2 quadrillion (US$84.16 billion) last year, according to an unaudited report from the SOEs Ministry.
SOEs Minister Erick Thohir said SOEs had been forced to significantly slash capital expenditure in response to falling revenue. Had they kept spending as usual, it would have been challenging for some to make a profit, or even to just stay afloat during the pandemic.
“The pandemic had a huge impact on SOEs,” Erick told lawmakers during a meeting at the House of Representatives on June 3.
According to SOEs Ministry data, the energy sector was the hardest hit by the pandemic, with SOEs operating in this sector losing more than Rp 193 trillion in revenue in 2020 compared with the preceding year.
SOEs in infrastructure lost Rp 71 trillion in revenue, making it the second-hardest hit among 13 sectors, followed by tourism with a Rp 55 trillion decline in revenue.
