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State-Owned Enterprise (SOE) Reforms

State-Owned Enterprise (SOE) Reforms

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Published by hadipratomo
This Presentation describe the SOE condition in Indonesia particularly Post Crisis 1998.
This Presentation describe the SOE condition in Indonesia particularly Post Crisis 1998.

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Categories:Types, School Work
Published by: hadipratomo on Mar 23, 2011
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03/23/2011

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StateState--Owned Enterprise (SOE) ReformsOwned Enterprise (SOE) Reforms Post Monetary Crisis in IndonesiaPost Monetary Crisis in Indonesia
Prepared byMochammad Hadi pratomo2007
 
Why Privatized?Why Privatized?
y
Empirical studies indicate that SOE used to finance infeasible projects/ providesubsidies to particular elite groups (Kikeri, Nellis, and Shirley 1992
y
Less competition, greater political intervention and weaker good corporategovernance and empirical studies showed that reformation thru privatization of SOE improved performances even in poor regulatory environments
Generally there are three objectives of privatization:1. Enhancing efficiency of asset use through the creation of private ownership;2. Reducing budgetary burdens3. Privatization as a socio-political goal (especially in transitioneconomy countries)
 
Overview of Indonesia·s SOE postOverview of Indonesia·s SOE postmonetary crisismonetary crisis
y
State owned enterprises (SOE) historically have long played significancerole in Indonesia's economy, accounts for around 70% of GNP by the early1980s and partly due to impact of monetary crisis, is for around 40% in2001 (World Bank 2001)
y
In 1999, total assets of the 113 SOEs (book value) were $39 billion (Rp391trillion), equivalent to 42 percent of the total assets of Indonesia·sproducing sector and SOEs employed 655,000 persons on a full-time basis.However, including their subsidiaries and the contract and subcontractworkers, the total workforce of SOEs was close to 1.4 million, or 18percent of the workforce in large and medium enterprises. Thecontribution of SOEs to the country's GDP was estimated at 12 percent,indicating a relatively low efficiency in the use of labor and assets (ADB1999). In 2000, total asset of whole SOE·s were $ 86 billion (Rp 861trillion) but only generating $ 1.3 billion (Rp 13.34 trillion) as net profitwith Return on Asset (ROA) rate 1.55%. This table below illustrate therange of ROA rate of Indonesia·s SOE during of 1997-2001 which onlyabout 1.55%-3.25%

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