Privatization vs nationalism<\/p>\n
Investors are predictably confused about the contentious
\ndebates over Indonesia's privatization program. While the
\ngovernment is making final preparations to sell a portion of its
\nstakes or controlling ownership in 24 state companies this year,
\nseveral groups have been trumpeting nationalism as a tool of
\nsocial engineering to oppose the program. Some members of the
\nHouse of Representatives even want the program stopped altogether
\npending the enactment of a law that governs privatization.<\/p>\n
The controversy and xenophobia are certainly giving investors
\nthe wrong signal at a time when the country, currently in the
\nfifth year of its economic crisis, can least afford it. This
\nmisguided and narrow-minded nationalism makes us like someone
\nfalling into an abyss but disliking the look of the lifeline
\nthrown out to us.<\/p>\n
The debates about the virtue and benefits of privatization and
\nthe arguments against foreign ownership of part of our economic
\nassets are a big setback in so far as domestic politics are
\nconcerned. Because privatization, as part of an overall reform of
\nthe inefficient and corrupt state companies, has been a
\ngovernment policy since the 1970s.<\/p>\n
The privatization program has been reaffirmed annually through
\nthe state budget law even after the end of Soeharto's
\nauthoritarian rule and the emergence of the reform era. The
\nPeople's Consultative Assembly, the highest policy-making body,
\nalso reiterated the policy measure in 1999 in one of its decrees
\nand the national development program law of 2000 again reaffirmed
\nprivatization as one of government's priority programs.<\/p>\n
Even during the early years after our independence when the
\nnation's economy was not been intensively and extensively
\ninterlinked with the global economy as it is now, foreign
\nownership of a portion of our economic assets was not seen as a
\nviolation of the sense of nationalism. The great contributory
\nrole of foreign investors to the nation's economy was even
\nfurther strengthened in 1967 by the enactment of the foreign
\ninvestment law.<\/p>\n
We should magnanimously acknowledge that had it not been
\npartly for foreign investment, foreign aid and international
\ntrade our economy would not have reached its current level of
\ndevelopment. That the economy now seems in ruins and the
\ngovernment is almost bankrupt and weighed down under mountains of
\ndebts is mostly because of our own mistake in allowing a corrupt,
\nauthoritarian government to rule us for more than three decades.<\/p>\n
Learning from past mistakes and from the successes of other
\ncountries in reforming their state enterprises, the government
\nhas decided, with the prior approval from the House, to sell a
\nnumber of state companies to private investors, including foreign
\nones.<\/p>\n
This policy has been encouraged by the realization that no
\ngovernment anywhere in the world has proven itself to be a good
\nmanager of commercial entities, let alone in Indonesia where the
\ngovernment has become internationally perceived as one of the
\nmost corrupt in the world.<\/p>\n
The government itself has explained time and again, on the
\nback of the experiences of other countries, that privatization of
\nstate companies is a highly effective means of improving
\nmacroeconomic efficiency through the creation of a competitive
\nmarket. An efficient market in turn will help businesses grow
\nsoundly, make profits, increase investment, add more employment,
\nand yield higher tax revenues for the state. All this will enable
\nthe government to allocate more resources to developing public
\nservices and utilities, and broadening public welfare programs.
\nOf no less importance is that the proceeds from privatization
\nwill help plug the state budget deficit and enable the government
\nto phase out foreign borrowing.<\/p>\n
Moreover, the country is especially desperate now for a fresh
\ninfusion of capital, and privatization is one of the most
\neffective means now available of attracting new investment.
\nWithout new direct investment, the country will not be able to
\nemerge from its present economic crisis, meaning that the
\nestimated 40 million fully-unemployed or underemployed, the tens
\nof millions of unschooled children and the millions of locally-
\ndisplaced persons will be forced to continue existing in heart-
\nwrenching inhuman conditions.<\/p>\n
Given the great benefits of privatization and the critical
\ncondition of our economy at present, foreign acquisition of a
\nportion or controlling ownership of state companies is entirely
\nfor the sake of the national interest This does not mean the
\nsurrender of national sovereignty, especially given that foreign
\ncompanies in the country remain subject to our national laws.<\/p>\n
In fact, opposition to privatization now means disloyalty to
\nthe national interest, ignorance of the plight of the unemployed,
\nthe millions living in abject poverty and the millions of
\nchildren who are facing a bleak future because they cannot afford
\neven a basic education.<\/p>\n
Politicians and state company employees who campaign against
\nprivatization and against foreign acquisition of privatized
\ncompanies are simply self-serving groups intent only on
\nmaintaining their vested interests.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/privatization-vs-nationalism-1447893297",
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"sponsor": "Okusi Associates",
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