Bold New Policy to Drive Savings in State-Owned Enterprises
Danantara, led by its CEO Rosan Perkasa Roeslani, estimates that Indonesia’s vast network of state-owned enterprises (SOEs) could save up to a remarkable Rp8 trillion annually, a figure that translates to approximately US$490 million. This significant financial saving is a direct result of a new policy on tantiem, or performance-based bonuses, for SOE board commissioners and their subsidiaries, which now prohibits them from receiving such compensation. This policy, which was presented to President Prabowo Subianto and other ministers during a Plenary Cabinet Meeting, marks a significant step toward reforming government-linked businesses and ensuring public funds are managed with greater efficiency and accountability. The conservative nature of this estimate, based on a comprehensive review of the current compensation structure, signals a serious and strategic effort to improve financial discipline and align SOE governance with global best practices, ensuring a more transparent and equitable system for the distribution of company profits.
Streamlining Business Processes for Enhanced Certainty
In the same cabinet meeting, Rosan Perkasa Roeslani, who also serves as the Minister of Investment and Downstreaming, introduced a new Government Regulation (Peraturan Pemerintah/PP) aimed at fundamentally streamlining the business permit process. The most crucial aspect of this new deregulation policy is that it provides a greater degree of certainty for businesses by stipulating that if a ministry or government body fails to respond to a permit application within a specified timeframe, the permit will be automatically issued. This groundbreaking measure is a direct attack on bureaucratic red tape and inefficiency, which have long been cited as major obstacles to investment and business growth in the country. The policy is specifically designed to eliminate unnecessary delays and create a more predictable and investor-friendly environment, thereby accelerating economic activity, encouraging new ventures, and improving Indonesia’s overall standing in the global ease of doing business rankings.
Presidential Mandate for Swift Implementation
Following the detailed briefing on the new policies, President Prabowo issued a clear and firm mandate for immediate action. He instructed all ministries and government institutions to immediately align themselves with the new regulation on business permits. He particularly urged those not yet fully integrated into the digital licensing system to follow up without delay, highlighting the importance of a seamless and efficient transition to the new framework. While specific details regarding the new regulation were not shared with reporters, the President’s firm and public directive signal a strong political will to see these reforms through to completion. This top-down mandate is a critical step in ensuring that the ambitious goals of cost savings and bureaucratic efficiency are not just theoretical but are implemented on the ground, holding government bodies accountable for their performance and ultimately benefiting the broader national economy by creating a more attractive and competitive investment climate.
