Latest news with #stateownedenterprises
Al Bawaba
3 days ago
- Business
- Al Bawaba
Romanian Deputy PM resigns amid resurfaced corruption scandal
ALBAWABA- Romania's Deputy Prime Minister, Dragoș Anastasiu, announced his resignation on Sunday following the resurfacing of an old corruption scandal in which he was involved as a witness. According to Reuters, His departure comes as the country's fragile, one-month-old coalition government pushes ahead with controversial cost-cutting reforms aimed at reducing the EU's largest budget deficit. Anastasiu, who had been appointed by Prime Minister Ilie Bolojan to lead reforms of Romania's inefficient state-owned enterprises, stepped down after media reports revisited a corruption case involving his company and the national tax authority. According to the revived case, one of Anastasiu's firms was blackmailed by a tax inspector into paying bribes disguised as consultancy fees from 2009 to 2017 in order to avoid burdensome audits. The company eventually reported the inspector, who was convicted in 2023. Neither Anastasiu nor his business partner were charged with any wrongdoing. In a public statement, Anastasiu defended his company's conduct, saying it had paid all required taxes and that the payments were made 'for survival, not profit.' He urged fellow business owners to come forward with similar experiences. Also Read Cambodia–Thailand border clashes persist despite ceasefire talks 'I encourage every entrepreneur to speak out about the conditions under which business has been conducted in Romania. We must no longer tolerate what we once did, even when mistakes were made,' he said. The resignation adds pressure on the government as it prepares to raise several taxes in August, cut public sector bonuses, and lay off staff, measures that have already triggered street protests. Although Romania narrowly avoided a downgrade from the lowest investment-grade credit rating, market volatility continues to pose risks.
South China Morning Post
08-07-2025
- Business
- South China Morning Post
China told its officials to tighten their belts. Did they go a notch too far?
This is the first story in a three-part series exploring the domestic economic challenges China faces as it navigates an unprecedented trade war with the United States. In this piece, we explore Beijing's drive to rein in wasteful government spending – and its unintended consequences. Wang, a civil servant from a small town in northeastern China, is too scared to go to restaurants these days. He even skipped his niece's wedding due to his fear of being seen at a banquet. An avid foodie, the 55-year-old used to dine with his friends once or twice a day – usually at purely social gatherings unrelated to his government job. But now, even casual meals out can cause serious problems. 'Nobody dares to stick their neck out nowadays,' said Wang, who declined to give his full name for privacy reasons. 'So I only eat at home now.' Wang is one of millions of Chinese state-sector workers who have been impacted by a government austerity drive that has sent shock waves across the country in recent weeks, hitting businesses hard and sparking concern in the corridors of Beijing The campaign started in May when the central government introduced stricter rules for civil servants and state-owned enterprise employees attending official receptions, which banned the consumption of cigarettes, liquor and 'high-end dishes'. The new guidelines were the latest in a string of measures to limit ostentatious celebrations by officials – a practice viewed as a waste of public funds and a slippery slope to corruption – that have long been a source of simmering public resentment.
CNA
27-06-2025
- Business
- CNA
Indonesia's new sovereign fund to boost state-owned enterprise assets, forge global ties: CIO
JAKARTA: Indonesia's second sovereign wealth fund, Danantara Indonesia, is positioning itself as a catalyst for transforming state-owned enterprises (SOEs) into competitive entities, while drawing in foreign partnerships, its chief investment officer Pandu Patria Sjahrir told CNA. The new sovereign fund was launched on Feb 24 to manage the assets of all state-owned enterprises in the country worth more than US$900 billion. It is Indonesian President Prabowo Subianto's main vehicle to achieve his 8 per cent economic growth target by 2029. At the launch, Prabowo said Indonesia is ready to collaborate with both local and foreign partners to make Danantara a success story. He added that the fund is a step towards bringing Indonesia to a developed country status. Its creation, though, has sparked both optimism and skepticism. Prior to the launch, some had raised concerns about transparency and potential political interference as it was unclear how Danantara would be audited. But Prabowo has pledged transparency in the fund's management, saying it could be audited anytime by anyone. TRANSPARENCY CONCERNS 'We can't have politicians within the ecosystem. So, it has to be fully professional,' said Pandu, adding that the fund plans to hire the best people. 'We can hire not just Indonesians, but outside of Indonesia.' Danantara is Indonesia's second sovereign fund, after the Indonesia Investment Authority (INA). Pandu said the market and the opportunities available are more than sufficient for Southeast Asia's biggest economy to set up the additional fund. 'We can actually have at least two,' he noted, pointing to other countries in Southeast Asia and the Middle East that maintain multiple funds. 'We're actually complementary to one another, our focus (is) really on optimising the state-owned enterprise assets and also on creating large businesses,' Pandu added. 'What INA does very well is doing partnership businesses. So in my view, there's so much opportunity between the two of us, and it's fine. 'You can choose partnership with INA, you can choose partnership with us, depending on, obviously, your risk parameters and the size you want to invest in.' Indonesia's SOEs are projected to generate 300 trillion rupiah (US$18.5 billion) in dividends for 2025. TARGETING STRATEGIC SECTORS Dividends from SOEs will be reinvested into strategic sectors instead of directly returning to state coffers. On whether there is a potential risk of wasting valuable investment capital if an SOE being rescued continues to record losses, such as Garuda Indonesia, Pandu said the idea is to accelerate the distressed flag carrier's long-term transformation. Danantara has recently extended a US$405 million loan to Garuda. 'We're actually very excited about the prospect because the wonderful thing about Indonesia, even the domestic market, is that it is so large and underpenetrated, and there's so much demand domestically as well,' he added. 'We want to be able to have more foreigners come to visit and see how wonderful Indonesia is, and the best way to do it is actually through the airline business.' Danantara is prioritising investments in key sectors such as digital infrastructure, healthcare and food and energy security, said Pandu, a seasoned investor and entrepreneur in the region. 'In each of these sectors, we need to create, in a way, a global mindset, large size companies,' he added. 'So, we will invest with partners. And I think a lot of what we do we will do through partnership that can bring know-how.' During his state visit to Singapore earlier this month, President Prabowo said he looked forward to close collaboration between Danantara and Singapore's Temasek Holdings, particularly in renewable energy and sustainable industrial zones. 'We're open,' said Pandu. 'We already know the style of investing. So, I think that will be a straightforward collaboration.'
Zawya
25-06-2025
- Business
- Zawya
Djibouti: Staff Concluding Statement of the 2025 Article IV Mission
Djibouti has been navigating regional tensions well, with robust growth, moderate inflation, and recovering reserves. In response to global uncertainties and domestic debt challenges, the authorities plan significant fiscal consolidation, including leveraging state-owned enterprises (SOE) dividends meaningfully, and advancing creditor dialogue. The authorities remain dedicated to investing in human capital and creating favorable investment conditions for job creation. Djibouti's economic resilience and contribution to regional stability Djibouti helps maintain regional stability by supporting maritime security and facilitating humanitarian responses during crises. Djibouti's GDP per capita has effectively doubled over the past decade thanks to significant investments that have contributed to the modernization of the economy. However, declining government revenues and increasing debt service have placed considerable strain on public finances, leading to unsustainable levels of public debt and diminishing reserves. Growth has not created enough jobs in the formal sector, while fiscal space to finance development needs is limited. The authorities are leveraging Djibouti's growth resilience to advance fiscal consolidation and rebuild reserves. Growth is expected to have exceeded 6.5 percent in 2024 due to increased transshipments amid Red Sea tensions, while moderate international food and energy prices kept inflation in check. The government deficit was reduced from 3.5 percent of GDP in 2023 to 2.6 percent in 2024 following a brief period of fiscal overruns and deficit monetization, and reserves have begun to recover partially offsetting the decline observed since late 2023, though they remain below the monetary base. The outlook is positive but subject to risks in an uncertain global context. Growth is projected to remain dynamic at around 6 percent this year and to continue over the medium term, albeit at a slower pace. Ethiopia's robust economy is expected to boost Djibouti's port activities; however, fiscal consolidation and the phasing out of large-scale investments may temper growth. Key risks include regional conflicts potentially increasing migration and affecting social stability amid a constrained fiscal space, and trade policy shifts that could depreciate the dollar and Djibouti franc, enhancing service exports but also raising inflation. Nonetheless, it is worth noting that Djibouti has successfully navigated several shocks over the past few years, including COVID-19, the 2022 Tigray crisis, the Ukraine war, and the 2024 Red Sea maritime disruptions. Leveraging resilience for fiscal sustainability and rebuilding reserves In the face of high global and regional uncertainty, Djibouti needs to quickly strengthen its economic resilience by restoring debt sustainability, safeguarding the currency board, and fostering inclusive growth. To this end, the authorities intend to strengthen fiscal consolidation and enhance financial transparency and governance of state-owned enterprises (SOEs) to unlock sustainable and meaningful dividend contributions to the national budget, restore reserves, and encourage private sector growth while protecting vulnerable populations. Durable fiscal consolidation is essential for restoring debt sustainability. The substantial fiscal adjustment frontloaded in the 2025 budget and the balanced budget target for 2026 onward are welcome steps. To sustain progress, it is essential that all governmental entities endorse annual fiscal targets that align with a medium-term fiscal consolidation strategy. Success depends on robust expenditure management via the diligent operationalization of the recently approved Public Financial Management Reform Strategy and Action Plan 2024–27. Furthermore, a comprehensive fiscal roadmap should continue to broaden the tax base by enhancing VAT and capital income taxation, rationalizing tax exemptions included in the investment code and the Free Zones regime, and finalizing the digitization of tax agencies. The effective establishment of the tax policy unit remains a priority for accurately assessing tax bases and enhancing tax reform efficiency. Operationalizing the recently created large taxpayer office will also bolster compliance and revenue collection. As Djibouti negotiates new terms for debt liabilities with creditors, well-managed and profitable SOEs can significantly aid national fiscal consolidation and restore reserves at the Central Bank of Djibouti (CBD), particularly following the dissolution of the Sovereign Wealth Fund (SWF). Building on ongoing efforts to improve SOE transparency and governance, it will be critical for the Executive Secretariat in charge of the State Portfolio (SEPE) to collect all SOEs' financial statements and monitor their performance. Swiftly implementing the Code of Good Governance is also essential for establishing a more transparent dividend policy tied to SOE performance, thereby mobilizing dividends more consistently and meaningfully for the budget, improving SOE efficiency and services, and appropriately right-size them. Additionally, fiscal transparency can be strengthened by discontinuing financial settlement practices for clearing government arrears with SOEs, and by improving coordination among the Ministry of Budget, line ministries, and SEPE for more effective budget risk management. Alongside fiscal consolidation, completing ongoing debt negotiations and addressing outstanding arrears with external partners are critical for debt sustainability. Equally important is implementing binding limits on borrowing for the central government, SOEs, including their participation in public-private partnerships, and ensuring these are enforced by the Public Sector Debt Committee. The mission is encouraged by the recent recovery in reserves and urges continued progress. To strengthen the currency board, the authorities plan to amend the CBD law to enhance its autonomy, which will help sustain reserves, exchange rate, and inflation stability. They also plan to introduce reserve requirements as a prudential tool, with implementation expected to follow a phased approach. Additionally, under MENAFATF's enhanced monitoring, Djibouti is reforming its AML/CFT framework, improving the business climate, and enhancing oversight of the banking sector due to its significant offshore component and rising government exposure. To facilitate policy making, the authorities are leveraging technical assistance provided by the IMF to enhance their coverage and quality of statistics relevant to surveillance, with a focus on national accounts, the fiscal and external sectors. Advancing inclusivity through private sector development and employment creation The government aims to foster economic growth and social equity. They aim to improve the existing targeting of the current fuel subsidy scheme. In order to create a more effective and equitable social protection system and reduce budget exposure to international energy prices, the authorities should gradually replace the current subsidy system with the strengthening of targeted cash transfers to the most vulnerable households, relying on the national social register. To attract investments and create jobs, they are enhancing access to education and job training under the 2021–35 education master plan. They aim to diversify the economy in sectors such as logistics and connectivity, tourism, agribusiness, and fisheries. To enable economic diversification, it is essential to develop a comprehensive roadmap with specific actions aimed at enhancing access to finance, streamlining administrative procedures, and expanding reliable and affordable internet services and electricity, including through increased bill collection, technical efficiency, and the adoption of cost-efficient renewable energy. These initiatives will enhance Djibouti's business environment, which is already supported by a stable macroeconomic climate, a currency board, ports infrastructure, and connectivity to Ethiopia's large market, all aligning with the objectives of Djibouti Vision 2035. 'The mission team expresses deep appreciation to the Djiboutian authorities and other counterparts for their warm hospitality, excellent cooperation and candid discussions, and looks forward to continuing close engagement.' Distributed by APO Group on behalf of International Monetary Fund (IMF).
Bloomberg
16-06-2025
- Business
- Bloomberg
Is Hong Kong's New World Too Big to Fail?
New World Development Co.'s financial distress is creating angst just as Hong Kong is starting to regain its feet. The real estate developer's systemic importance is of great concern to residents, policymakers and investors alike. Property fire sales at New World could drag down home prices further, while a potential default will impair banks' loan books. But for the company's $4.5 billion perpetual bond holders, there's a possible happy ending if the builder is deemed too big to fail: An equity injection from Chinese state-owned enterprises or the Hong Kong government would make their day.
