Government Capital Injection into State-Owned Enterprises (SOEs) and Other Institutions 2015-2018

Government capital injections into State-Owned Enterprises (SOEs) and other institutions/agencies in the form of State Capital Participation (PMN) increased significantly during the 2015-2016 period compared to previous years. This is in line with the government's policy of allocating investments to SOEs, which, as development agents, can actively support national priority programs (Nawacita).

However, in 2017, the government reduced the PMN budget allocation to SOEs in accordance with the policy direction of investment financing to encourage SOE independence. Government investment in SOEs in 2017 fell by 87 percent to Rp 6.4 trillion compared to the previous year; similarly, investment in other institutions also decreased by 70 percent to Rp 3.2 trillion. In the 2018 State Budget (RAPBN), the capital injection budget for SOEs was further reduced to Rp 3.6 trillion and Rp 2.5 trillion for other institutions/agencies.

Towards the end of 2017 and three years into President Joko Widodo's administration, many infrastructure projects faced difficulties securing financing, even though the government had increased the infrastructure budget that year. For information, the infrastructure development needs for 2015-2019 reached Rp 4,796 trillion, while only Rp 1,978.6 trillion could be financed from the government budget. The remainder was targeted to be sourced from SOEs and the private sector.

(Read Databoks: Infrastructure Development Requires Rp 4,796 Trillion)