Entering the era of domestic economic revival, collaboration between the private sector and State-Owned Enterprises (BUMN) is the key to success in creating an economic ecosystem that can be directly felt by the community. This has been realised in the Covid-19 period, through excellent collaboration between the Government, SOEs and the private sector in mitigating the impact of the pandemic and encouraging recovery to keep the economy stable.

Reflecting on this achievement, the collaboration between the private sector and the Government is an important part in accelerating various government development programmes. The synergy between the private sector, state-owned enterprises and the government plays an important role in encouraging inclusiveness and sustainability of Indonesia's development, especially in achieving the Golden Indonesia 2045 target.

In an effort to strengthen this collaboration, Kadin Indonesia organised the SOE-Private Synergy Forum. Chairman of Kadin Indonesia, Arsjad Rasjid, said that the forum with the theme Collaboration for Inclusive Development is expected to strengthen the commitment of all parties and jointly encourage solid economic growth.

"With a mutually sustainable and inclusive relationship between the Government, SOEs and the private sector, it will certainly contribute significantly to improving the economic level and economic activity of the nation," said Arsjad in his speech in Jakarta, Monday (14/8).

This is also reinforced by the improvement in Indonesia's economic growth amid global economic uncertainty. Referring to data from the Central Statistics Agency (BPS), the Indonesian economy in the second quarter of 2023 was still able to record positive growth of 5.17% (year on year/yoy) or 3.86% (quarter to quarter/qtq) while accumulating growth in the first half of 2023 to 5.11% (cumulative to cumulative/ctc).

The achievement also marks Indonesia's economic growth that has been above five per cent for seven consecutive quarters. In addition, Indonesia also returned to being an upper middle income country, based on the World Bank classification updated in July 2023.

Even so, Arsjad assessed that there are still significant challenges ahead. Starting from high food and energy prices, increased geopolitical risks, tight and aggressive monetary policies by most central banks in the world, to other risks in the global financial system.

"Seeing these challenges, optimisation of collaboration must continue so that all parties can run and develop economic democracy synergistically. SOEs, in this case, must be pioneers in sectors that have not been favoured by private businesses and help develop the community's economy," added Arsjad.

The Role of SOEs for the Country

In response, SOE Minister Erick Thohir explained that the transformation of SOEs in recent years has continued to encourage increasingly solid SOE performance. As reflected in the growth of BUMN profits in 2022 of IDR 250 trillion (excluding one-off profits from Garuda restructuring), growing 100% from 2021 profits of IDR 125 trillion.

This increase, Erick continued, has an impact on increasing the contribution of SOEs to Indonesia, reflected in dividend contribution commitments that have touched IDR 80.6 Trillion, contributions to taxes of IDR 278 Trillion, and SOE market capitalisation which continues to rise to IDR 2,201 Trillion in 2022.

"In addition, SOEs that have a role as agents of development are also working on national strategic projects whose impact can be felt directly by the entire community. However, we cannot be complacent, therefore to increase our contribution to the Indonesian economy, SOEs need to optimise synergies with the private sector, including MSMEs, by leveraging their strengths and mitigating their weaknesses," Mr Erick said in his speech.

Moreover, strong collaboration between SOEs and the private sector has proven to be a major driving force in advancing the community's economy. Through synergistic and directed cooperation, SOEs and the private sector are able to create a sustainable positive impact, encourage inclusive economic growth, and make a significant contribution to national development.

In recent years, collaboration between SOEs and the private sector has proven its benefits in various economic sectors. This collaboration has realised a number of large and innovative projects that not only improve the competitiveness of the national economy, but also provide new job opportunities for the community. Joint investments in infrastructure, technology, renewable energy and other key sectors have fuelled the creation of diverse employment opportunities and supported sustainable economic growth.

"The combination of SOEs' long-term experience in managing public assets with private sector flexibility and innovation brings positive impacts on public services and sustainable development. In addition, this collaboration also encourages knowledge and technology transfer, strengthens local capabilities, and promotes the growth of a more independent national industry," Mr Erick added.

###