PT Perusahaan Listrik Negara (PLN) posted a net profit of Rp10.84 trillion(US$774.28 million) in the third quarter (3Q) of 2019 - Photo by the Company

JAKARTA (TheInsiderStories) – The government will provide additional capital of Rp17.7 trillion (US$1.24 billion) for eight state-owned enterprises (SOEs) in 2020. That figure is down by Rp10 billion compared to 2019 of Rp17.8 trillion. The funding is intended to continue the development of energy sector infrastructure and connectivity between regions.

However, the granting of state capital participation to SOEs is stated to be still carried out selectively by considering the ability of leverage, financial and operational performance of SOEs as well as technical project readiness.

From the 2020′ draft state budget and expenditure, the following SOEs will get a capital injection next year. The state financing company PT Sarana Multigriya Financial Rp2.5 trillion, PT Hutama Karya Rp3.5 trillion, PT Bahana Business Development Indonesia Rp0.3 trillion.

Furthermore, PT Geo Dipa Energi Rp0.7 trillion, PT Permodalan Nasional Madani Rp1 trillion, PT Perusahaan Listrik Negara Rp5 trillion, PT National Development Fleet Rp3.8 trillion, and strengthening the current account balance Rp1 trillion.

It said the state capital investment budget is included in investment financing. Investment financing is aimed at increasing economic growth and supporting various Government policies, such as accelerating infrastructure development, encouraging national export programs, improving the quality of human resources, improving people’s welfare through cooperative empowerment, and enhancing Indonesia’s participation in the international level.

On the other hand, the government seeks funding at least Rp389.3 trillion to finance the 2020 State Budget’ deficit, said finance minister Sri Mulyani Indrawati on Friday. Next year, the deficit is estimating around 1.76 percent of Gross Domestic Products (GDP) or worth of Rp307.2 trillion.

This year, the government estimated the deficit at 1.84 percent of GDP. But some economist sees the deficit will widen to 1.93 percent of GDP. Lucky Affirman, the directorate general at the ministry said, his department has published 75 percent of this year government bond’ issuances from its target Rp827.5 trillion (gross). For 2020, he said, the government open to publishing the bond before the current year. But he declined to figure out the number.

In his speech at the parliament member, President Joko Widodo explained the Indonesian economy it’s expecting grow 5.3 percent from this year‘ target 5.2 percent. Inflation 3.1 percent, Rupiah over the Greenback at 14,400, rate of T-bills for three months at 5.4 percent, oil price $65 a barrel, oil lifting 734,000 barrels and gas lifting 1.19 million barrels equivalent.

In total, the government proposed Rp2,528.8 trillion budget to parliament for 2020. The funds will use to finance the president’ programs in his second term.

Coordinating Minister for Economic Affairs, Darmin Nasution revealed the 2020 State Budget’ focus is to accelerate the infrastructure projects, rise the human resources capacity, structural reform, simplify the investment permit and export. He expects the 2020 State Budget into effect in September.

While Indrawati explained, there are new policy and initiatives at the 2020 State Budget such as tax incentives for Human Resource, Social Protection Smart Card for College, Pre-Work Card, Basic Food Card. Then, a mini tax holiday for investment values under Rp500 milliard and other programs.

Furthermore, Bambang Brodjonegoro, minister of national planning development revealed, the government expects the poverty rate below 9 percent in 2020 from this year around 9 percent. While, the level of inequality below 0.38 percent, open unemployment close to 5 percent, and an Indonesia Development Index 72.5.

US$1=Rp14.200

Written by Lexy Nantu, Email: lexy@theinsiderstories.com