Erick Thohir to Stop Subsidies for SOEs

TEMPO.CO, Jakarta - Minister of State Owned Enterprises (SOEs) Erick Thohir, in coordination with the Ministry of Finance and the Ministry of Energy and Mineral Resources (ESDM), is set to stop subsidies for SOEs to make them step up their focus on operational performance.

"Yesterday we had a meeting with the Minister of Finance and the Minister of Energy and Mineral Resources regarding policies on energy in the future and also the priorities of subsidies. The policy for the future is we want state-owned enterprises to no longer receive subsidies, instead, the subsidies will go directly to the people," he said via video conference, on Friday, April 3, 2020.

This policy, Erick continued, was also geared to increase the transparency in the management of SOEs. In addition, SOE directors, especially in the energy sector, are expected to steer clear from issues on subsidies, which has been an ill-defined situation in the past

"Now, it's the corporation that really thinks about their operations, so it [this policy] will also change the paradigm of SOE directors. This part has been a gray area that caused window dressing practices, so we want the subsidies to directly go to the people, it must be efficient," he added.

Erick explained that although the removal of subsidies to SOEs had been agreed by the relevant ministries, the decision would instead be announced directly by the Ministry of Finance.

According to Erick Thohir, the Ministry of SOEs is currently reviewing subsidy schemes that have been provided to SOEs in the fertilizer sector. As a result, Erick will once again hold a coordination meeting with other ministries in the near future to decide on subsidies for SOEs in the fertilizer sector.

BISNIS | Dio Suhenda (Intern Translator)