SOE’s Foreign Debts Trigger Risk Contingency

The foreign debts of Indonesia’s state-owned enterprises up to July 2019 hit US$ 52.8 billion. Since the beginning of the year, the debts have been gradually increasing. During January-July, Indonesia’s state-owned enterprises’ foreign debts raised to US$ 6.3 billion or up 13 percent year-on-year. The debts of state-owned non-financial enterprises were US$ 41.3 billion or contributed 20 percent of the total foreign liabilities of private sectors per July 2019. On the other hand, during the same period, the foreign debts of state-owned banks reached US$ 7.6 billion while the foreign debts of state-owned non-bank financial enterprises were at US$ 3.9 billion.

Moody’s assessed that the increase of SOEs’ foreign debts was worrying and causing uncertainties. Moody's investor service recently released a report showing that the state-owned enterprises in the Asia-Pacific area except for China were risky and uncertain whether profitable or not. Moody’s singled out several state-owned enterprises in the report, such as PT Waskita Karya Tbk, PT Garuda Indonesia Tbk, PT Adhi Karya Tbk, PT Kimia Farma Tbk, PT Krakatau Steel Tbk, and PT Indofarma Tbk.