;JP;VIN;
\nANPAk..r..
\nState-companies-IBRA
\nJP\/4\/Editorial<\/p>\n
Laksamana's delicate task<\/p>\n
While President Megawati Soekarnoputri's decision to put the
\nIndonesian Bank Restructuring Agency (IBRA) under State Minister
\nof State Enterprises Laksamana Sukardi has been welcomed by most
\nanalysts as a strategic move to speed up asset sales and
\ncorporate reform, the new policy is, however, causing misgivings
\namong political parties.<\/p>\n
The decision will reduce the burden of the finance minister,
\nBoediono, to enable him to focus on fiscal management, while at
\nthe same time allow Laksamana to coordinate asset sales and
\ncorporate reform within IBRA and hasten the privatization of
\nstate firms.<\/p>\n
Nevertheless, suspicions on the move are understandable, given
\nthe deep-rooted nature of corruption in the country, extremely
\npoor fiduciary standards in the public sector and the upcoming
\ngeneral election in 2004.<\/p>\n
That is because the decision practically puts more than Rp
\n1,300 trillion (US$158 billion) worth of state assets, which is
\nalmost as large as the nation's gross domestic product, under the
\nsupervision of Laksamana, a leader of Megawati's Indonesian
\nDemocratic Party of Struggle (PDI Perjuangan) and one of her
\nclosest aides.<\/p>\n
Although Laksamana, a former private banker, boasts an
\nimpeccable record of integrity and is known for his strong
\nproreform stance, his being a confidant to the President could
\nstand in the way of his crusade to accomplish his mission.<\/p>\n
Therefore, needless to say, Laksamana, and especially
\nMegawati, should address the concerns over this potential
\nconflict of interest early on, otherwise any move Laksamana makes
\nto push reform will come under suspect, notably from the major
\nfactions of the House of Representatives. A hostile public
\nopinion environment will certainly make it more difficult for him
\nto accomplish his tasks.<\/p>\n
The most effective way to assuage such concerns is for
\nMegawati, right from the outset, to consistently uphold high
\nstandards of integrity and act firmly against all forms of
\nmalfeasance. Perception of Megawati's integrity will go a long
\nway in strengthening public trust in Laksamana.<\/p>\n
On the other hand, Laksamana needs to go all out to prove his
\ntrustworthiness by consistently maintaining high standards of
\naccountability and transparency in all the decisions he makes
\nregarding asset sales, debt restructuring and state company
\nreforms. Both the ministry of state companies and IBRA are not
\nshort of technically competent staff. What they urgently need is
\nleadership with integrity and conscience.<\/p>\n
Laksamana's job is already an uphill one, even without being
\ndistracted by suspicions from the public or other political party
\nleaders, as he is tasked with raising Rp 43.5 trillion or 15.2
\npercent of the total state revenue this year alone.<\/p>\n
He is under tremendous pressure to accelerate the recovery of
\nthe billions of dollars worth of assets under IBRA, either
\nthrough sales or debt restructuring, not only to help plug the
\nstate budget deficit, but also to prevent the quality of the
\nassets from deteriorating.<\/p>\n
Expedited sales of the assets is crucial to strengthen the
\nbudding economic recovery because without new investors, these
\nassets will remain underutilized and eventually become total
\nlosses.<\/p>\n
Accelerated restructuring of corporate bad debts is equally
\nvital to help strengthen the banking industry because only after
\nrestructuring can these assets be returned to banks to regain
\naccess to new credit lines. Returning restructured debts to banks
\nin exchange for recapitalization bonds will not only speed up the
\nbanking recovery by expanding their lending operations, but also
\nhelp reduce state budget burdens on bond interest payments and
\nfuture bond redemption.<\/p>\n
On top of that, Laksamana has to convince the public,
\nespecially political leaders in the provinces and districts, that
\nthe reform of state companies, which can include restructuring
\nmeasures such as sales to strategic investors, listing on the
\nstock exchange and mergers, is the best way to maximize benefits
\nfrom the state assets. It is not ownership of assets but optimum
\nearnings and other economic benefits from the assets that should
\nbe made the ultimate goal.<\/p>\n
Laksamana needs to change the mind-set of political leaders
\nwho oppose privatization as they consider it antinationalistic
\neven though many state enterprises have only managed to remain in
\noperation because of subsidies from taxpayers' money.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jpvin-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}