Privatization priority<\/p>\n
The case for allowing a faster rate of privatization in the
\nIndonesian economy is a compelling one.<\/p>\n
From the vantage point of fiscal solvency and macroeconomic
\nefficiency, we see the calls from some politicians insisting on
\nfurther delay in the sale of state assets as completely
\nflabbergasting.<\/p>\n
More confounding still, is the fact that the demands for a
\nslower pace of this economic change came from members of the
\nHouse of Representatives -- politicians who are supposed to be
\nfighting for the interests of the people.<\/p>\n
Are these politicos so harshly arrogant that they are still
\nblind to the reality that millions of people in this country have
\nbeen suffering from dire poverty since the 1997 economic crisis?<\/p>\n
Perhaps worse yet, do they purposely ignore the millions of
\nchildren deprived of even the most basic education and health
\nservices? Their future is, sadly and unfairly, a bleak one.<\/p>\n
Intellectually, are the House members so ignorant of the blunt
\nfact that, without a faster pace of privatization of state-owned
\nenterprises (SOEs) -- and sales of assets held by the Indonesian
\nBank Restructuring Agency (IBRA) -- a lasting economic recovery
\nwill remain an elusive dream?<\/p>\n
Aren't they aware that, due largely to past mistakes -- not to
\nmention gross mismanagement and pervasive corruption -- the
\ngovernment is now almost bankrupt with total debts of more than
\nUS$135 billion -- and that the economy is severely strapped for
\nliquidity?<\/p>\n
It is entirely a paradox to observe that it is the House
\nmembers and not the government, notorious for its deep-seated
\nculture of corruption, that has staunchly opposed the
\nprivatization program. It should have been the other way around,
\ngiven the bitter fact that SOEs have, so far, been used by senior
\nofficials as cash cows.<\/p>\n
The findings of independent audits of a dozen SOEs last year
\nshowed how totally inefficient those state companies had been,
\nthe laxity of their internal control, their poor accounting
\nstandards and how arbitrary government investigations were of
\ntheir day-to-day operations.<\/p>\n
Needless to say, based on empirical experiences in most other
\ncountries, privatization will bring in additional revenues to the
\ncash-starved government, enabling it to reduce debt and making
\nmore resources available for public welfare.<\/p>\n
Privatization is also greatly effective in improving
\nmacroeconomic efficiency through the creation of more competitive
\nmarket activity.<\/p>\n
Its microeconomic benefits, likewise, are equally manifold,
\nincluding more efficient -- and consequently, more profitable
\nenterprises -- larger tax revenues for the state and a
\nsignificant increase in investment to create more jobs.<\/p>\n
Fears the privatization program would bring the national
\neconomy under foreign domination are overblown.<\/p>\n
One should not forget that it was mostly the corruption-
\ninfested national companies that were responsible for the
\neconomic malaise.<\/p>\n
This can be seen in the thousands of companies being treated
\nin the IBRA \"restructuring hospital.\" Foreign companies will
\nalways be subject to Indonesian laws and regulations. But they
\nwill help promote good governance practices in the private and
\npublic sectors.<\/p>\n
Instead of demanding a special law to govern privatization,
\nthe House should instead require the government to formulate a
\nbroad legal and political framework.<\/p>\n
This should be backed up by a credible strategy for SOE reform
\nand privatization and stipulate clear-cut directives, standard
\noperational procedures and step-by-step process for divestment to
\nensure highly accountable -- and transparent -- privatization
\ntransactions.<\/p>\n
State Minister of State Enterprises Laksamana Sukardi was
\nright in his warning last week that Indonesia cannot afford the
\ndelay in the privatization program because we are in the mid of a
\ndeep crisis: if the economy continues to bleed, more and more
\npeople will continue -- as they are now -- falling into absolute
\npoverty.<\/p>\n
The government needs the full support of the House in fighting
\nthe vested-interest groups and powerful lobbyists, including SOE
\nmanagements, who often gang up with SOE employees in opposing the
\nprogram.<\/p>\n
But the government also needs to demonstrate political courage
\nand a ability to act firmly, consistently and decisively to
\nenforce its policies in order to earn such support.<\/p>\n
The government's credibility was eroded by its seeming
\npowerlessness in dealing with the employees of PT Semen Gresik
\nand their strike to block the company's privatization, and with
\nthe workers of PT Telkom who demonstrated against its asset swap
\nwith another SOE, PT Indosat.<\/p>\n
This is perhaps the first time in the nation's history that
\nthe employees of SOEs have been so blatant and daring to the
\npoint of breaking laws in an attempt to dictate their wishes on
\nthe government.<\/p>\n
This is not a democratic practice of expressing views, but is
\nsimply an anarchy that could have taken place only under a
\ngovernment suffering from a crisis in leadership.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/privatization-priority-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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