President Jokowi Encourages BUMN to Set Up Holding and Joint Venture

President Joko Widodo gave instruction in a meeting with the Managing Directors of all State-Owned Enterprises (BUMN), at the Negara Palace, Jakarta, on Wednesday (21/10) evening.

President Joko “Jokowi” Widodo asserted that he wants the State-Owned Enterprises (BUMN) to become big. Therefore, the President encouraged BUMN to be strengthened by setting up holding company and join venture, as well as by developing holding and subholding.

“I think it is the issue in the Ministry of State-Owned Enterprises. However, I really want the BUMN to get bigger, by asset evaluation or others. I guess this is the authority of the related ministers. I just want the BUMNs to be big and strong enterprises,” President Joko Widodo said in a meeting with the Managing Directors of BUMNs, on Wednesday (21/10) afternoon.

The President took an example of Temasek (Singapore’s BUMN) and Khazanah (Malaysia’s BUMN) which rapidly improve through the right holding. If they do not want to directly create a holding, they could start from virtual holding first. “It is okay to do that, but they must start the process. Thus, it could form a system, and could not work on their own,” the President said.

According to the President, Pelindo (state-owned enterprises that provide port services) should start heading to the goal. Thus, Pelindo 1, 2, 3, 4 will be united in a national logistic system and make national logistic prices, transportation cost and logistic distribution cost cheaper. The same thing also applies to PTPN (state-owned enterprise which operate in the plantation industry) that is expected to start the process soon.

The enterprises probably can start the process at the same time, including to create the synergy in the development, cooperation, operation, alliance and conglomeration of those enterprises. Thus, it will boost national and regional developments.

“The process to achieve the goal must be started soon. I ordered the Minister of State-Owned Enterprises to explain the roadmap as soon as possible,” the President firmly said.

President also hopes that the BUMNs will open and ready to set up joint ventures. The technical method is up to the ministries. However, there must be a calculation. Several BUMNs have started it and apparently it is getting bigger and can give a great contribution to the State.

“If we do not apply it, the condition of the State would never change. In my opinion, the enterprises which already set up joint venture look bigger, and show a better management. I think there are many desires of foreign investors to set up joint venture. The important things is to calculate and observe the performance of those who want to set up joint venture,” the President said.

According to the President, the most important thing is the downstreaming in the industrialization, including technology transfer. There are several functions that need acceleration, thus, our BUMNs development could boost the economy, technology transfer and others.

The President mentioned that other countries are using BUMN as a booster too. Furthermore, the President has instructed the Minister of State-Owned Enterprises and informed the managing directors, management and directors to carry on this project. If they could not do that, the President asked to change their positions.

“There is no other thing. I want our BUMNs think big and could become global players. I think quite many enterprises have become global players, for example in cement industry, banks and construction. Other enterprises must follow them,” the President said.

“This is the time. If the momentum is available and we could not utilize it, then our condition will not change, we do not move forward or backward, we just stay in our place. “I do not want to hear the same story like that. There are numerous opportunities that we could take,” the President added.

President Joko Widodo took an example of the development and resurrection of Indonesia’s defence industry which could be improved. We have a great vision, yet, in the reality, the project has stopped for years. There is something wrong about it.

“I think there must be new initiatives or ideas so our BUMN can make a major change. The paradigm should be changed,” the President said.

The meeting among President Joko Widodo and the Managing Directors of BUMN on Government Work Plan (RKP) was attended by the Vice President of the Republic of Indonesia Jusuf Kalla, Coordinating Minister for Political, Legal and Security Affairs Luhut B. Pandjaitan, Coordinating Minister for the Economy Darmin Nasution, Coordinating Minister for Human Development and Culture Puan Maharani, Coordinating Minister for Maritime Affairs and Resources Rizal Ramli, Minister of State Secretary Pratikno, Cabinet Secretary Pramono Anung, Presidential Chief of Staff Teten Masduki and National Police Chief Gen. Badrodin Haiti. (DNK/EN/DEN/ES) (RAS/MMB/YM-Naster/Sy)