Revolt at state companies<\/p>\n
State company employees seemed to have tasted blood when the
\ngovernment succumbed last year to the demand of Semen Gresik
\nworkers and some vested-interest groups to cancel the sale of the
\ncement company to Mexico's Cemex, the world's third-largest
\ncement group, which is listed on the New York Stock Exchange.<\/p>\n
Trade unions at several other state companies moved to reject
\nnew boards of directors, alleging that their integrity was
\nquestionable.<\/p>\n
For a few days during the third week of last month, the
\nemployees of the Central Java unit of Telekom went on strike and
\ndemonstrated in Yogyakarta and Jakarta in an attempt to block its
\nasset swap with another state telecommunications concern,
\nIndosat.<\/p>\n
Union leaders at Bank Central Asia, which is now at the final
\nstage of its tendering process, are organizing a mass strike to
\nforce the government to stop the bank's strategic sale to foreign
\ninvestors, demanding that the country's third-largest bank remain
\nmajority-owned by the state.<\/p>\n
Why, at a time when more than 40 million people are either
\nunder-employed or entirely jobless, are state company employees
\nso radical and easily provoked to rebel against sensible
\ncorporate policies that have legally and properly been decided by
\nthe majority shareholders?<\/p>\n
Almost all analysts agree that the deals, undertaken as part
\nof the reform of state companies, are economically quite sensible
\nand greatly conducive to restoring sorely-needed investor
\nconfidence in the economy.<\/p>\n
The transactions would bring in additional revenue to the
\ncash-starved government to plug its huge budget hole. But most
\nimportantly, the deals would unshackle the state companies from
\nthe grip of corruption and would make them less vulnerable to the
\ndemands from politically well-connected vested interests.<\/p>\n
The Semen Gresik deal, for example, would have injected at
\nleast US$530 million into the state's coffers and put the cement
\ncompany under better management. This, in turn, would have made
\nthe company more competitive on both the domestic and
\ninternational markets and consequently would have enabled it to
\nraise capacity utilization, thereby increasing sales, generating
\nmore employment and tax revenues for the government.<\/p>\n
The asset swap between state Telekom and Indosat has been
\ndesigned to gear them up for keener competition as a result of
\nthe termination of Telkom's monopoly in fixed-line services and
\nIndosat's duopoly in international call services.<\/p>\n
Telkom will be able to provide international call services and
\nget a much larger share of the cellular phone market while
\nIndosat will, in turn, enter fixed-line operations by acquiring
\nTelkom's facilities in Central Java. So, by and large, both state
\ntelecommunications companies would be in a better position to
\nface stiffer competition after the liberalization of
\ntelecommunications.<\/p>\n
Likewise, BCA's strategic sale has been designed to put the
\ncountry's largest retail bank in the hands of more credible
\nowners and bring its operations up to international standards, to
\nbolster confidence in the fragile banking industry.<\/p>\n
It may be OK in principle for the employees, as one of the
\nstakeholders of the companies, to freely express their views and
\nassert their arguments. But acting in such a violent manner to
\noppose policies that are so clearly for the future good of the
\ncompanies and their employees is totally antidemocratic and
\nutterly intolerable.<\/p>\n
Because most of the demands are not directly related to worker
\nwelfare and future career development one cannot help but get the
\nimpression that the employee revolts were partly instigated by
\nvested-interest groups, which have thus far used state companies
\nas their cash cows.<\/p>\n
However, such near-anarchy and worker radicalism could not
\nhave occurred had President Megawati Soekarnoputri demonstrated a
\nmodicum of leadership and credibility. Her government, instead,
\nseems incapable of knowing when to act firmly and appears
\npolitically incompetent in preventing Cabinet members from
\nbecoming engaged in highly public squabbles over policy
\ndecisions.<\/p>\n
The government also seems ignorant of the blunt reality, in
\nthe current learning phase of the democratization process, that
\nnothing is simple and easy any more when it comes to policy-
\nmaking. The government can no longer simply mandate policies,
\nhowever rational and sensible they may be, as did the past
\nauthoritarian government under president Soeharto.<\/p>\n
It is most imperative for Megawati to work harder to earn
\npublic confidence in her leadership and her government and for
\nher Cabinet ministers to \"go the extra mile\" in selling policies
\nthrough effective communication with the House of
\nRepresentatives, all affected stakeholders and the general
\npublic.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/revolt-at-state-companies-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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