JAKARTA (The Jakarta Post/ANN): The government has disbursed a total of Rp 37.07 trillion (US$2.63 billion) in state capital injections (PMN) to four state-owned enterprises (SOE) and two state agencies in a bid to help revive the virus-battered economy.
President Joko “Jokowi” Widodo signed several regulations in December to officially disburse the funds.
As much as Rp 7.5 trillion is channeLled to state-owned construction company PT Hutama Karya, Rp 6 trillion to insurance holding company PT Bahana Pembinaan Usaha Indonesia (BPUI), Rp 2 trillion to pharmaceutical holding company PT Bio Farma and Rp 1.57 trillion to infrastructure financing guarantee company PT Penjaminan Infrastruktur Indonesia.
The government also disbursed Rp 15 trillion to the Indonesia Investment Authority (LPI) and Rp 5 trillion to the Indonesian Export Financing Institution (LPEI).
“Everything is calculated. This is for their working capital, ” SOE Ministry expert staff member Arya Sinulingga told The Jakarta Post in a phone interview on Monday (Jan 4).
The government has allocated a total of around Rp 45 trillion in state capital injections for SOEs as part of both the 2020 state budget and the Covid-19 stimulus package. The most recent injections come at a time when the government is speeding up the disbursement of funds.
Other SOEs, such as state-owned PT Indonesia Tourism Development Corporation, plantation holding company PT Perkebunan Nusantara and housing company PT Perumnas also received support.
Arya said the capital injection for Hutama Karya was expected to help create jobs and improve the country’s logistics through toll road projects, including the 2,704-kilometre trans-Sumatra toll road.
“The state capital injection worth Rp 7.5 trillion that has been signed by the President in late December will be used by Hutama Karya to speed up the development of two sections of the trans-Sumatra toll road project, ” the company’s corporate secretary, Muhammad Fauzan, told the Post via text message.
Of the fund, Rp 3.2 trillion will be used to develop the Simpang Indralaya–Muara Enim section, which is part of the Palembang–Bengkulu corridor, and Rp 4.3 trillion for the Pekanbaru–Padang section, which is part of the Kisaran–Dumai–Padang corridor.
The trans-Sumatra toll road, which connects Lampung and Aceh with 24 toll road sections, is expected to start fully operating in 2024.
As of 2020, the company has developed 1,156 km for the Phase One development, of which 513km are already in use and 643km are still under construction.
“The Phase One development, for example, will employ many workers and create a lot of impacts, both for those working for the toll road projects itself and the raw material [suppliers], ” said Arya.
The pandemic has affected nearly 30 million workers across the country, sending the unemployment rate to 7.07 per cent in August, up from 5.23 per cent in August last year, according to Statistics Indonesia (BPS
Meanwhile, Bio Farma spokesperson Bambang Heriyanto said Monday that capital injections would not be used to procure coronavirus vaccines from Beijing-based biopharmaceutical company Sinovac Biotech or to cover the logistics for the nationwide vaccine distribution, which began Sunday.
“[The money] will be used to provide quality, integrated, affordable and customer-oriented national healthcare products and services by increasing the capacity and capability of hospital health services, ” Bio Farma spokesperson Bambang Heriyanto told the Post via text message.
Piter Abdullah, an economist at the Center for Reform on Economics (CORE) Indonesia, said Monday that the capital injection was “the right step”, because government spending was the only means to keep the economy afloat when the private sector was hit hard by the pandemic.
In the July–September period, household spending was down 4.04 per cent year-on-year (yoy) and investment expenditure dropped 6.48 per cent yoy, while government spending was up by 9.76 per cent yoy.
The whole economy, meanwhile, contracted 3.49 per cent yoy in the quarter, sending the country into its first recession since 1998.
“I think programmes that the government has planned are on track, which is something we can expect to have an impact on our national economic recovery, ” Piter said. - The Jakarta Post/Asia News Network