Laksamana's delicate task<\/p>\n
While President Megawati Soekarnoputri's decision to put the
\nIndonesian Bank Restructuring Agency (IBRA) under State Minister
\nfor State Enterprises Laksamana Sukardi is welcomed by most
\nanalysts as a strategic move to speed up asset sales and
\ncorporate reform, the new policy also is causing misgivings among
\npolitical parties.<\/p>\n
The decision will reduce the burden of Finance Minister
\nBoediono to enable him to focus on fiscal management but at the
\nsame time allow Laksamana to coordinate asset sales and corporate
\nreform within IBRA with privatization of state firms.<\/p>\n
But suspicions about the move are also understandable, given
\nthe deep-rooted nature of corruption in the country, extremely
\ninadequate fiduciary standards in the public sector and upcoming
\ngeneral election in 2004.<\/p>\n
That is because the decision practically put more than Rp
\n1,300 trillion (US$158 billion) worth of state assets, or almost
\nas large as the nation's gross domestic product, under the
\nsupervision of Laksamana, a leader of Megawati's Indonesian
\nDemocratic Party of Struggle and one of her closest aides.<\/p>\n
Even though Laksamana, a former private banker, boasts an
\nimpeccable record of high integrity and strong pro-reform stance,
\nhis being a confidante to the President could stand in the way of
\nhis crusade to accomplish his mission.<\/p>\n
Needless to say, therefore, that Laksamana, but especially
\nMegawati, should address the concerns over this potential
\nconflict of interest early on, otherwise any move Laksamana would
\ntake to push through the reform measures would constantly come
\nunder suspect, notably among the major factions at the House of
\nRepresentatives. A hostile public opinion environment would
\ncertainly make it hardly possible for him to accomplish his duty.<\/p>\n
The most effective way of pacifying such concerns requires
\nMegawati right from the outset to consistently uphold high
\nstandards of integrity and to act firmly against all forms of
\nmalfeasance. Perception of Megawati's integrity would go along
\nway in strengthening public trust in Laksamana.<\/p>\n
On the other hand, Laksamana needs to go all out to prove his
\nclean slate by consistently maintaining high standards of
\naccountability and transparency for all decisions he will make
\nregarding asset sales, debt restructuring and state company
\nreform. Both the ministry of state companies and IBRA are not
\nshort of technically competent staff. What they badly and
\nurgently need is leadership with integrity and conscience.<\/p>\n
Laksamana's job is already an uphill one even without being
\ndistracted by suspicisions from the public or other political
\nparty leaders as he is tasked with raising Rp 43.5 trillion or
\n15.2 percent of total state revenues this year alone.<\/p>\n
He is under tremendous pressures 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 hole but also to prevent the asset quality from
\ndeteroriation.<\/p>\n
Expedited sales of the distressed assets is quite crucial to
\nstrengthen the budding economic recovery because without new
\ninvestors these productive assets will remain underutilized and
\nwill eventually turn into total losses.<\/p>\n
Accelerated restructuring of corporate bad debts is equally
\nvital to help strengthen the banking industry because only after
\nrestucturing can these assets be returned to banks to regain
\naccess to new credit lines. Returning restructed debts to banks
\nin exchange of recapitalization bonds not only will speed up the
\nbanking recovery by expanding their lending operations but also
\nwill help reduce state budget burdens for bond interest payments
\nand future bond redemption.<\/p>\n
On top of that, Laksamana has to conduct a lot of campaigning
\nto convince the public, especially political leaders in provinces
\nand districts, that reform of state companies, which can include
\nsuch restructuring measures as sales to strategic investors,
\nlisting on the stock exchange or merger, is the best way to
\nmaximize benefits from the state assets. It is not ownership of
\nassets but optimum earnings and other economic benefits from the
\nassets that should be made the ultimate goal.<\/p>\n
Laksamana needs to change the mindset among many political
\nleaders who often oppose privatization as violation of
\nnationalism even though many state enterprises have remained in
\noperations only with subsidies from taxpayers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/laksamanas-delicate-task-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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