JAKARTA, July 29, 2024 – Indonesia’s state-owned enterprises (SOEs) have reported a significant increase in dividend payments to the government, showcasing the success of recent reforms aimed at enhancing efficiency and profitability. In the 2023 fiscal year, dividends from state-owned companies more than doubled to 81 trillion rupiah (approximately US$5.2 billion), marking a 102.1% increase from the previous year.
During a parliamentary hearing on July 10, Indonesia’s Minister of State-Owned Enterprises, Erick Thohir, highlighted that SOEs contributed 21.9% of the nation’s total fiscal receipts for the year, up from 15% in 2022 when accounting for taxes and other non-tax payments.
The surge in financial performance follows a series of organisational and governance reforms initiated by the ministry. These reforms included the establishment of sector-focused holding companies, the implementation of stronger oversight mechanisms, and the concentration of resources on activities with the highest economic impact.
“Creating more competitive SOEs with stronger financial performances required the consolidation and rationalisation of existing SOEs so we could streamline operations and reduce redundancies,” stated Minister Erick Thohir. “At the same time, we implemented a wider restructuring of the ministry to improve governance structures.”
Indonesia’s largest SOEs, including the national oil company Pertamina, state-owned mining company MIND ID, and major banks Bank Rakyat Indonesia and Bank Mandiri, reported combined profits of 215 trillion rupiah in 2023.
The reforms have also facilitated global partnerships across various sectors. Pertamina NRE, a renewable energy subsidiary of Pertamina, has partnered with UAE-based Masdar to develop solar and wind power plants. Additionally, the ministry secured an investment commitment of up to $3 billion from Eagle Hills, a subsidiary of UAE’s Emaar Properties, to enhance Indonesia’s tourism destinations and airport logistics.
Despite the improved performance, the government continues to provide budget support for selected SOEs. At the July 10 hearing, parliament approved 44.2 trillion rupiah in capital injections for the fiscal year 2025, primarily to fund strategic projects with significant economic and social impact.
Over the past five years, Indonesia’s SOEs have paid a total of 280 trillion rupiah in dividends to the government. During the same period, the government has injected 218 trillion rupiah into selected companies to fund priority national projects, including village electrification programs and infrastructure development such as the Trans-Sumatra toll road and light rail transit (LRT).
“The Ministry of SOEs and all state-owned enterprises are committed to continuing this transformation process while ensuring that capital provided by the Indonesian government will be invested optimally to advance prosperity for Indonesia and its people,” added Minister Erick Thohir.