CORE ISSUE “ISN’T THE PASSPORT”
Observers say allowing foreigners to lead Indonesia’s SOEs could inject international best practices in management, transparency, and innovation into the firms – many of which have been mired in debt, inefficiency and corruption scandals.
It could also boost investor confidence in publicly-traded SOEs, they said.
“The presence of expatriates is expected to bring improvements in governance,” said Toto Pranoto, an economist from the University of Indonesia.
Tauhid Ahmad, a senior researcher at the Institute for Development of Economics and Finance (INDEF), said the removal of the decades-old ban was long overdue.
“If Indonesia wants to become a global player, it needs people with international experience. Those with such backgrounds can help accelerate progress more quickly,” he said.
Indonesia could benefit from recruiting expatriates with experience in transforming the state-owned enterprises of other countries, he added.
“By learning from the experiences of those countries, the pace of transformation can be much faster,” Tauhid said.
BP BUMN chief Dony Oskaria said the government will be selective in hiring foreigners for state firms.
“It depends on the needs. For certain sectors, we need to carry out transformations in how our SOEs are managed. So don’t focus on whether someone is an Indonesian or a foreign national,” Dony told reporters on Oct 20, as quoted by news portal Detik.
State Secretary Prasetyo Hadi also suggested the Garuda appointments may not be the last.
“We also need many talents in the mineral and oil industries. If we feel that we require the skills and competencies of someone who happens to be a foreign national, why not?” Prasetyo said on Oct 17, as quoted by Tempo.
Garuda Indonesia is an appropriate starting point for the new policy, experts said.
Despite having the potential to become a leading regional carrier, Indonesia’s flag carrier has long struggled with financial difficulties that have necessitated repeated government bailouts.
Danantara, which has a 64.5 per cent stake in Garuda, recently pledged to inject a total of US$1.8 billion into Garuda after the airline reported a US$142.8 million loss in the first half of 2025. Garuda also disclosed a US$737 million debt load – exceeding its total assets of US$581 million.
https://www.channelnewsasia.com/asia/indonesia-state-owned-enterprises-foreigners-top-management-garuda-5419931
