Selling state assets not govt priority<\/p>\n
Rendi A. Witular, The Jakarta Post\/Jakarta<\/p>\n
Selling the government's shares in state enterprises was the
\nlowest priority for the government, Vice President Jusuf Kalla
\nsaid on Friday.<\/p>\n
Speaking after Friday prayers at the his office, Kalla said
\nthe government would sell assets on its own timetable and would
\nnot hastily divest itself of valuable enterprises to plug the
\nbudget deficit or to comply with foreign donor requests.<\/p>\n
"We don't want to sell our state companies at a low price. By
\nrevitalizing the state enterprises, we will obtain the same
\namount of proceeds as we would from privatizing them," he said.<\/p>\n
Kalla said the government could obtain more proceeds to help
\nease the state budget deficit from the payment of dividends
\nallocated by state enterprises, as well as from taxes paid by the
\ncompanies.<\/p>\n
The government aims to receive about Rp 9.5 trillion (US$1
\nbillion) from the state enterprises dividends for this year's
\nstate budget. However, the government has also projected a Rp 3.5
\ntrillion in earnings from its planned privatization program.<\/p>\n
The government currently owns 158 state enterprises with
\ncombined assets valued at more than Rp 1.3 quadrillion (US$135
\nbillion). It has been planning to merge 54 of the companies into
\n21 entities and put 38 others into 10 holding companies. The
\nremaining 66 would continue operations as is.<\/p>\n
In a bid to improve transparency and governance, the
\ngovernment will eventually sell shares in the 10 holding
\ncompanies to the public via initial public offerings.<\/p>\n
Kalla said the government would not bow to any requests from
\ndonor institutions, such as the Asian Development Bank (ADB),
\nwhich pledged financial assistance in exchange for the sale of
\nthe government's stake in several state firms.<\/p>\n
ADB had entered into agreement with the government to lend
\nsome US$250 million to help the country reduce its widening state
\ndeficit -- a deal that hinged on the government selling its
\nminority stakes in a number of state companies.<\/p>\n
The deal, however, was leaked to the press early this year
\nwith Minister of Finance Jusuf Anwar -- a former ADB executive --
\nlater revising several requirements in the agreement by scrapping
\nthe condition to immediately sell state assets.<\/p>\n
In the revised deal, ADB agreed to lower the level of the
\nrequirements for the loan by demanding the government first
\ncomplete its draft law on state enterprises, which includes the
\nprocess for selling stakes in state companies.<\/p>\n
"We have to drop any deals with foreign donors, which demand
\nthe government sells our assets (forthwith). They should change
\ntheir conditions if they want to disburse the loans to us," Kalla
\nsaid.<\/p>\n
Kalla was responding to local reports, which said Coordinating
\nMinister for the Economy Aburizal Bakrie had ordered State
\nMinister of State Enterprises Sugiharto to immediately complete
\nthe drafting of the bill on state companies.<\/p>\n
The request, the reports said, was aimed at meeting the
\nconditions set out by the ADB and also to meet revenue targets
\nfrom the privatization process set out in the state budget.<\/p>",
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