APSN Banner

Indonesia overhauls state firms, fills them with Jokowi's allies

Bloomberg News - December 28, 2021

Fathiya Dahrul and Rieka Rahadiana – Indonesia is overhauling state companies and replacing the management teams with professionals and many of the president's allies amid concern the appointments are politically motivated.

State-Owned Enterprises Minister Erick Thohir has replaced at least a dozen major state companies' management since he took office in October 2019, starting with the appointment of Basuki Tjahaja Purnama, a former Jakarta governor and a close ally of President Joko Widodo, as president commissioner of state oil firm PT Pertamina. He promoted Darmawan Prasodjo as the new chief of state power firm PT Perusahaan Listrik Negara. Prasodjo was a former campaign adviser to Jokowi, as the president is called.

State-owned enterprises, which made up 16% of Indonesia's gross domestic product before 2020, are key to Jokowi's bid to improve infrastructure and ride the nation out of the pandemic that led to a recession for the first time since the 1998 Asian financial crisis. Southeast Asia's biggest economy is expected to rebound only this year, expanding 4.7%-5.5% from a contraction of 2.07% in 2020.

"The overhaul is being done for both performance and political reasons," said Bhima Yudhistira Adhinegara, a director at the Center of Economic and Law Studies on Monday. Some directors failed to exercise swift policy adoption during the outbreak so they had to be replaced, while others were unable to achieve the organizational reforms desired by Jokowi. In the case of Listrik Negara, the previous head was considered as going against the government policy for proposing a tariff increase, he added.

Thohir, a 51-year-old business owner of media companies, also picked top professionals to lead Indonesia's bellwether companies. Energy veteran Hendi Prio Santoso, then president of cement maker PT Semen Indonesia, was appointed in October to lead mining giant PT Indonesia Asahan Aluminium. He also named Nicolas Kanter, former chief of Vale Indonesia, as the new head of miner PT Aneka Tambang in December.

Source: https://www.bnnbloomberg.ca/indonesia-overhauls-state-firms-fills-them-with-jokowi-s-allies-1.170088