Indonesian State-Owned Enterprises: The Challenge of Reform

Wicaksono, Agung Prasetyo Nugroho

doi:10.1355/seaa08i

Cited by 23 publications

(25 citation statements)

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“…Under the reorganisation plan, SOEs were divided into three groups: those going to remain as stand-alone companies, those to be merged with one another, and those to become subsidiaries of sector-based SOHCs. The government prioritised creating SOHCs in fertiliser, cement, plantation, and mining sectors, while also considering SOHCs in logistics, energy, and tourism sectors (Wicaksono, 2008). In the longer term, the government envisioned to create a super-holding company similar to Singapore's Temasek Holdings or Malaysia's Khazanah Nasional.…”

Section: Previous Efforts To Establish Sohcsmentioning

confidence: 99%

Matchmaking: Establishment of state‐owned holding companies in Indonesia

Kim

2018

Asia & Pacific Policy Stud

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Under the government of President Joko Widodo, Indonesia's state-owned enterprises (SOEs) have become the driver of the national development strategy. The current administration is actively using SOEs to conduct development projects based on the belief that SOEs are able to fix market failures and support the fiscally constrained government. In order to strengthen the role of SOEs, the Indonesian government is pursuing a medium-term plan of creating sector-based holding companies. The government expects that these state-owned holding companies (SOHCs) will enable SOEs to expand investment and benefit from synergies. However, considering political hurdles in implementing this policy, the process of establishing SOHCs is expected to advance gradually. The government also continues to face challenges clarifying and communicating the rationale behind creating SOHCs. This paper examines the current political economic context of SOE ownership reorganisation in Indonesia and diverse views on the expected consequences of forming SOHCs. KEYWORDScorporate governance, economic nationalism, state capitalism, state-owned enterprise, state-owned holding companyThis is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.

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Section: Previous Efforts To Establish Sohcsmentioning

confidence: 99%

Matchmaking: Establishment of state‐owned holding companies in Indonesia

Kim

2018

Asia & Pacific Policy Stud

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“…The SOEs performances were below average compared to their peers. They are ranked poorly in various ratings on corporate governance (Wicaksono, 2008) and continue to struggle with low profitability, overstaffing, unfocussed operations and poor productivity (Hill, 2000). Moreover they encountered tremendous challenges in managing the competitive advantage situation especially towards the competition from both private and multinational companies.…”

Section: 1mentioning

confidence: 99%

“…In the case of SOEs, the core issues during reform predominantly are the abuse of power, low productivity, unfocus operational activity (Hill, 2000), low quality of public service and unstreamed organization structure (Chang,2007), improvement of corporate governance (Wicaksono, 2008). At the macro level, SOEs reform is needed to support the improvement of bottleneck in economy , to reduce pressure on state budget (Yasin,, 2003) also to support development and economic recovery post crisis (Forfas, 2008).…”

Section: Advances In Social Science Education and Humanities Researcmentioning

confidence: 99%

“…The larger the SOE sector, the larger government's direct influence over the public sector (Smith and Trebilcock, 2001). However, SOEs have been associated with major governance cases in Indonesia such as being rigid, bureaucratic and poor services in distributing service to the public and the performances were below average compared to their peers (Chang, 2007;Wicaksono, 2008; Hill, 2000). These circumstances have created a perception of how incompetent the government is in implementing policy (McLeod, 2005) and lead to the minimum aggregate of public value creation.…”

Section: Introductionmentioning

confidence: 99%

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An Investigation of The Impact of State-Owned Enterprise (SOEs) Reform To The Public Value Creation In Indonesia Post Soeharto Era (1998-2016)

Nugraha¹

2017

Proceedings of the International Conference on Administrative Science, Policy and Governance Studies (ICAS-PGS 2017) and the In

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The State Owned Enterprises (SOEs) is important part of the contemporary public sector reform. They'are growing force to the national development and globally by increasing contribution to the global economic and governance (Pricewaterhouse, 2015). In Indonesia, since the era of Old Order (1945-1966), New Order (1966-1998 to Reformasi (1998-current), SOEs have been inseparable instruments in the social and economic development (Mardjana, 1992). Beside their profit motive, SOEs have attributable social benefits for the purpose of public service. The larger the SOE sector, the larger government's direct influence over the public sector (Smith and Trebilcock, 2001). However, SOEs have been associated with major governance cases in Indonesia such as being rigid, bureaucratic and poor services in distributing service to the public and the performances were below average compared to their peers (Chang, 2007;Wicaksono, 2008; Hill, 2000). These circumstances have created a perception of how incompetent the government is in implementing policy (McLeod, 2005) and lead to the minimum aggregate of public value creation. In some SOEs considered a success story, the performance is merely limited to the "business value" creation rather than "public value" creation. SOEs reform existed to respond to the problem through variety of reform options and has been considered among critical reform beside beauracratic, decentralization and fiscal reform. The purpose of this paper is to investigate key determinants factors to improve SOEs' capacity in public value creation, specifically from SOEs reform agendas using predominatly several key concepts including of Public Value (Moore, 1995), TIMM (PWc, 2015), Public Sector Reform (Cayden, 1969; ) and through the utilization of Soft Sytems Methodology as the action research approach.

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“…This is due to the priority on their managerial skills (e.g., capacity to generate efficiency and profitability) rather than their knowledge of the company's sector. However, the fact that SOE directors are appointed by the Minister of SOEs upon the approval of the Parliament means that the government's socio-political goals and control continue to influence the management and performance of the companies [74,75]. This also explains the bureaucratic style of SOE management and why their managers behave like government representatives.…”

Section: The Role Of Actors In the Introduction Of Jatrophamentioning

confidence: 99%

Riding the Hype: The Role of State-Owned Enterprise Elite Actors in the Promotion of Jatropha in Indonesia

Simandjuntak

2014

Sustainability

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Within a few years following its ambitious promotion in 2006, the development of jatropha in Indonesia came to a halt. Claimed as a potential solution to problems in energy and poverty, the introduction of jatropha in Indonesia's energy policy had been triggered by the high oil prices in 2005. While studies by biofuel scholars have generally focused on what brought the end of the "miracle crop" hype by underlining various technical problems and the absence of market structure as the cause of its failure, few have examined jatropha as part of a policy-making trajectory, which began with, and was influenced by, the development narratives disseminated by individual actors. This article sheds light on the role of elite actors in the making of biofuel energy policy in Indonesia. Taking the case of the promotion of jatropha in 2005-2007, the article illustrates the role of the director of Indonesia's leading sugar state-owned enterprise (SOE), Rajawali Nusantara Indonesia (RNI), whose decision in promoting jatropha became influential in forwarding its narratives into the national energy and development policy in 2006. In order to discover why a specific elite actor decided to promote jatropha, the article relies on data, including the SOE's documents and interviews with key actor(s). The analysis is conducted using an actor-oriented approach, which underlines the discrepancy between the ideals and the operational practice of developmental goals.

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Indonesian State-Owned Enterprises: The Challenge of Reform

Cited by 23 publications

References 3 publications

Matchmaking: Establishment of state‐owned holding companies in Indonesia

Matchmaking: Establishment of state‐owned holding companies in Indonesia

An Investigation of The Impact of State-Owned Enterprise (SOEs) Reform To The Public Value Creation In Indonesia Post Soeharto Era (1998-2016)

Riding the Hype: The Role of State-Owned Enterprise Elite Actors in the Promotion of Jatropha in Indonesia

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