Kostrad off-loaded business units<\/p>\n
Tiarma Siboro, The Jakarta Post, Jakarta<\/p>\n
As the government tries to draw up an inventory of the myriad
\nbusiness interests of the Indonesian Military (TNI) as part of
\nthe preparations to remove them from military control as required
\nby law, the Army's Strategic Reserve Command (Kostrad) claimed
\nthat it now only has interests in three business units.<\/p>\n
Kostrad Commander Lt. Gen. Hadi Waluyo said recently that the
\nforce owned 100 percent of the shares in commercial aviation company PT
\nMandala Airlines and healthcare group Darma Medika General
\nHospital, and had a 25 percent stake in cargo company PT Darma
\nMandala.<\/p>\n
\"We're now trying to revamp Mandala Airlines,\" he said,
\npointing out that the company had not performed well due to
\nmismanagement.<\/p>\n
Hadi said that part of the revenue from the three companies
\nhad been used to help improve the welfare of soldiers and their
\nfamilies, brushing aside criticism that the military businesses
\nhad only benefited the generals as a result of rampant
\ncorruption.<\/p>\n
Hadi claimed that Kostrad had gotten out of the timber
\nbusiness long ago. However, he did not provide any details on
\nwhy and when the force had divested its interest in the lucrative
\ntimber sector.<\/p>\n
He said that Kostrad had also unloaded its shares in \"other
\nbusinesses\", such as construction companies, as many of them had
\nnot performed well.<\/p>\n
He added that the stakes in the \"other companies\" had been
\ngiven to Kostrad by private investors for free. He failed,
\nhowever, to explain why private investors should gave Kostrad
\nshares in their companies.<\/p>\n
He pointed as an example to a road construction company in
\nwhich Kostrad had shares, which won the contract to build the
\nMalang-Gempol highway in East Java.<\/p>\n
\"The project, however, did not proceed well, so of course we
\ndidn't get any money,\" Hadi said.<\/p>\n
Hadi's statement is the first explanation given by a senior
\nmilitary officer on the state of the TNI's vast business
\ninterests since the Indonesian Military Law passed last year
\nstipulated that the TNI must relinquish its business interests
\nwithin a five-year period to ensure improved professionalism.<\/p>\n
TNI Commander Gen. Endriartono Sutarto has claimed that the
\ndivestment of the military's business interests could be
\ncompleted within the next two years.<\/p>\n
The once supremely powerful TNI obtained its various business
\nunits under the 30-year authoritarian regime of former president
\nSoeharto. But critics have said that the military's involvement
\nin business has increased corruption and undermined military
\nprofessionalism, while the direct benefits to low ranking
\nsoldiers and their families have been meager.<\/p>\n
Hadi, however, rejected the criticism. He said that in the
\ncase of Kostrad, profits from its business units had been partly
\nused to provide scholarships for soldiers' children and
\ncompensation for the families of soldiers killed on active
\nservice.<\/p>\n
\"Roughly, we spend Rp 300 million to Rp 400 million on
\nsupporting the education of the children. We also provide Rp 25
\nmillion to families whose sons or husbands were killed during
\noperations,\" he said.<\/p>\n
Other Kostrad spending took the form of housing allowances.<\/p>\n
While the mechanism by which the TNI will divest its business
\ninterests remains unclear, some government officials have floated
\nthe idea that the government take over part of the businesses and
\nturned them into state-owned enterprises.<\/p>\n
But a researcher with Indonesian Corruption Watch (ICW),
\nDanang Widoyoko, has warned the government to be very careful
\nwhen acquiring the business units of the TNI since many of them
\nhad been mismanaged.<\/p>\n
He was worried that their acquisition would only increase the
\nburden on the state (and the taxpayers) as a result of the
\npropping up of loss-making firms.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kostrad-off-loaded-business-units-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}