Before taking steps to Restructuring and Privatization of State Owned Enterprises (SOEs) in relation to the Indonesian economy, they should our first question about the justification BUMN.Hal presence is important because what is the use to tamper with something that probably should not have rights economic life and / or become a burden if the government continue to manage it.

FIVE FACTORS behind the existence of BUMN

1. Pioneer or pioneers because private wrestle not interested
2. Managing business areas are “strategic” and implementing public service
3. Balancing the forces of large private
4. Revenue Sources
5. Results from the nationalization of Dutch companies


BUMN Restructuring understanding is improving state of health / development companies and business performance through the usual standard system applies in the corporate world.
SOE Restructuring Objectives:

  1. Changing control of the state government which had been directly (control by process) to be based on the results of the control (control by result). Control over state enterprises no longer need through various formalities rules, guidelines, licenses and others, but through determination of target-qualitative and quantitative targets to be achieved by the management of SOEs, such as ROE (Return On Assets), ROI (Return On Investment) and certain others.
  2. Empowering SOE management (empowerment) through increased professionalism on the Board of Directors and Board of Commissioners
  3. Reorganized to restructure the position and function within the framework of state enterprises in the era of globalization (AFTA, NAFTA, WTO) through a process of restructuring, consolidation, merger (merger), separation, liquidation and formation of a holding company to be selective.
  4. Examine various aspects associated with the performance of SOEs, including the implementation of corporate management system that uniform (still consider the specific characteristics of each state), the review of payroll (remuneration), rewards and sanctions (reward & punishment).

Understanding Privatization is essentially removing the monopolistic government control over BUMN. As a result of government controls over state-owned monopoly distortions caused, among others, the pattern of management of SOEs to be the same as government bureaucracy, there is a conflict of interest between the functions of government as regulator and provider of business and become fertile ground state grows a variety of practices Corruption, Collusion and Nepotism and tend not transparent. The fact proves that there are no corrupt (rarely found) on the state-owned enterprises has become a public company (went public).

Benefits of BUMN Privatization

  1. BUMN will become more transparent, so as to eliminate the practice of KKN.
  2. BUMN management to become more independent, including freedom from bureaucratic intervention.
  3. BUMN will gain market access to global markets, in addition to the domestic market.
  4. BUMN will obtain new equity capital in the form of fresh money that development is faster.
  5. BUMN will obtain the transfer of technology, especially technology production processes.
  6. The transformation of corporate culture is slow, bureaucratic culture, a lively corporate culture.
  7. Reducing the budget deficit, because the funds in part to increase the cash budget.
  8. BUMN will increase operational performance / finance, because the management company more efficient.


Parties who agree with the privatization of state firms argue that privatization should be done to improve the performance of BUMN and closing devisit Budget. With the privatization of SOEs is expected to be able to operate more professionally again. Logically, with the privatization of over 50%, then the control and implementation of state policy will shift from government to new investors. As the largest shareholders, new investors will certainly try to work efficiently, so as to create the optimal profit, able to absorb more labor, and could provide a better contribution to the government through tax payments and dividend distribution.

Those who do not agree with the privatization argued that if privatization is not implemented, then the ownership of BUMN remained in government hands. Thus, any gains or losses are borne entirely by the government. They argue that the budget should be closed devisit with other sources, not from the sale of BUMN. They predict that the budget deficit will also occur in the coming years. If BUMN are sold each year to cover the budget deficit, when the state will be a sold out and the budget deficit in coming years will still happen.

Controversy over the privatization of state enterprises also arise from privatization in terms of Article 1 (12) of Law Number 19 Year 2003 About the SOE which mentions:

“Privatization is the sale of shares of Persero, either partially or wholly, to other parties in order to improve performance and corporate value, expand benefits for the state and society, and expand share ownership by the people”.

In the article explained that the privatization of some pernjualan stock and all, the word that contains all of this controversy for people because if it sold shares to the government seuruhnya kepemilkan these SOEs have gone turned into private property and move, it’s not another state but the private companies that feared servants public to be abandoned if the community is managed by the private sector should be privatized, and if only 49% maximal Part and the government should remain as the majority shareholder to state-owned assets are not lost, and switch to private and state enterprises as public servants still played by the government

Meanwhile, the government itself forced to privatize in order to close the budget deficit. Other than the budget deficit was closed by foreign debt are also covered by the deposit of privatization and IBRA. Thus, as if privatization is only meet short-term goals (to close the budget deficit) and not to maximize value in the long term. If the government had taken steps to privatize the policy, technically state involvement in strategic industries no longer exist and the government just watched through the rules and ethics of business are made. Concretely, the government should separate the functions of state institutions and business functions which sometimes overlap and still later handed over to private management.

The fact indicates that the management was done by the private sector in general results more efficiently. Based on the experience of other countries shows that the country would be better not immediately run an industrial operation, but simply as a regulator of creating a conducive business climate and enjoy the results through tax revenues.

Therefore, privatization can be considered successful if the efficiency, a decline in the price or service improvements. In addition, privatization is not just about economic issues alone, but also about issues of social transformation. In it comes to the constitutional basis for privatization, the extent to which privatization can be accepted by the public, employees and the political elite (parliament) so as not to cause turmoil.


  1. Changing the orientation of the implementation of the privatization program of short-term to long term. That is, the conduct of the privatization program is not only intended to lure foreign investors and the achievement of the state budget revenue target, but the immediate purpose is to develop a strong foundation for the development of national economy
  2. Privatization Act soon issue that can guarantee the privatization process in a democratic and transparent. In this Privatization Law should not only set about the process of privatization of state enterprises, but must also include the privatization process of public enterprises and other public property. All that is not only necessary to protect the public interest, but also to clarify the role of the state in managing the national economy.
  3. Immediately dissolve the state enterprises minister’s office and turned it into an autonomous body under the name Agency BUMN Restructuring and Privatization (BPP-SOEs). Agency which has equal status with the National Bank Restructuring Agency (IBRA), not only in charge of selling state enterprises, but especially encouraged to give priority to improving the performance of BUMN in order to really benefit the economic future of Indonesia.

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