Privatization will benefit economy<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Defending its stance over the privatization program, the
\ngovernment has asked for public understanding for its plans to
\nsell state firms that make little contribution to the state,
\narguing it would eventually benefit the economy in general.<\/p>\n
"There will be an economic efficiency if the government sells
\nunprofitable state firms. The firms were formed during the Dutch
\ncolonial era and have now become burdens to the state," Kalla
\nsaid after the Friday prayer.<\/p>\n
The government would conduct further study for one month
\nbefore deciding which companies are to be merged or sold to the
\npublic or to local administrations, he said.<\/p>\n
The government, however, would not be selling companies
\ncheaply.<\/p>\n
"In the future, state companies that remain under government
\ncontrol are the ones that are strategic, have good prospects and
\nare profitable, as well as operating for the public benefit," he
\nsaid.<\/p>\n
At present, the government is burdened with managing 158 state
\ncompanies with combined assets worth about Rp 1,300 trillion
\n(about US$133 billion). However, only about a dozen of them
\ncontribute any revenue to state coffers.<\/p>\n
Most of the companies are currently in bad shape due in part
\nto mismanagement and corruption amid the government's limited
\nability to properly supervise and set clear-cut policies to
\ndevelop them.<\/p>\n
The government is now trying to speed up the sale of several
\nunprofitable and burdensome state enterprises, in particular
\nthose enterprises that have no public service obligations or that
\nare not strategic in any way.<\/p>\n
Almost always, however, such plans draw criticism and carry
\nrisks of being politicized, with narrow sectional interests
\nsaying that privatization goes against the national interest.<\/p>\n
According to the blueprint on the development of state firms
\nissued by the Office of State Minister of State Enterprises, the
\ngovernment will only sell an entire stake in companies that do
\nnot give any advantage to the state.<\/p>\n
As for profitable companies, the government will only sell a
\npart of its stake via the stock market, with the aim of helping
\nto plug the budget deficit. Under this program, this year
\nproceeds from privatization of state assets have been set at Rp
\n3.5 trillion.<\/p>\n
Among the state companies included in such category are Bank
\nNegara Indonesia (BNI), and mining companies PT Antam, PT Timah
\nand PT Bukit Asam Batubara.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/privatization-will-benefit-economy-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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