Open AccessState-Owned Enterprise Financial Governance: Dilemma of State Wealth Separation
Author(s) -
Meinarni Asnawi,
Bismar Nasution,
Ningrum Natasya Sirait,
Sunarmi . Sunarmi
Publication year - 2020
Publication title -
iop conference series. earth and environmental science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.179
H-Index - 26
eISSN - 1755-1307
pISSN - 1755-1315
DOI - 10.1088/1755-1315/452/1/012036
Subject(s) - dilemma , bureaucracy , corporate governance , politics , state (computer science) , government (linguistics) , constitution , commodity , business , economics , market economy , finance , normative , economic system , law and economics , political science , law , philosophy , linguistics , epistemology , algorithm , computer science
State assets that are separated in a state-owned enterprise (SOE) business capital have become a paradigm since the amendments of the 1945 Constitution in Chapter VII and Chapter VIIA. The three packages of laws within the scope of State Finance become the main principle to regulate SOE’s. The principles inherent in the regulation of State Finance for SOE’s have been contested multiple times, but the Constitutional Court’s decision still reinforces the principle that the SOE’s fund remains as the State’s Finance. This research uses a normative juridical method. The results show that various unfavorable situations exist towards SOE’s as business entities because they are managed in the form of bureaucratic and controlled by the central policy of the government. The government tends to prioritize political control, which sacrifices company efficiency. This condition has potentially distracted SOE’s performance. The SOE’s as agents of development should be able to determine economic development. In Medan City, there are several SOE headquarters. SOEs in North Sumatra with the characteristics of producing typical commodity should contribute to the development of Medan City through CSR programs. In conclusion, the management of SOEs has not been made optimal due to political and bureaucratic influences. Thus, SOEs contribution has not been able to fully support Medan City development.