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Forget protection: Jokowi tells SOEs to get out of their comfort zone
President Joko “Jokowi” Widodo says state-owned enterprises (SOEs) should no longer be shielded by the government and should look for international partners.
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President Joko "Jokowi" Widodo (white shirt, left) attends the groundbreaking ceremony for PT Freeport Indonesia's copper smelter in Gresik, East Java, on Oct.12. (BPMI Setpres/Lukas)
P
resident Joko “Jokowi” Widodo has said state-owned enterprises (SOEs) should no longer be shielded by the government, as it makes them feel too comfortable within their respective industries.
Injecting state capital into ailing SOEs is one of the practices Jokowi appears keen to dispense with, having said previously that the government had afforded SOEs such treatment too often.
He said he believed that doing so meant that many SOEs lacked courage to compete and reluctant to take risks. SOEs, he said, should adapt their business models to current trends like Industry 4.0, technological disruption and the pandemic, he added.
“So, no more protection [for SOEs]. That’s it. Forget protection,” Jokowi said in an address to SOE directors during a visit to East Nusa Tenggara on Thursday.
“If you ask me, just close them! There is no need to save them, if that's the case,” Jokowi said with regard to SOEs that were unable to adapt.
SOEs have been relying heavily on support from the government, which plans to disburse Rp 72 trillion (US$5.127 billion) in 2022 to help debt-laden SOEs or to streamline the government-assigned projects they are carrying out.
Some SOEs also benefit from good ratings from credit rating agencies despite global uncertainty or internal financial problems thanks to direct or indirect government backing.
