Bulog changes status to semi profit-oriented firm
Bulog changes status to semi profit-oriented firm
The Jakarta Post, Jakarta
The government has decided to change the status of the
National Logistics Agency (Bulog) into a semi profit-oriented
state-owned company, with one of the main aims being to improve
the agency's financial accountability.
The decision was made during a limited Cabinet meeting on
Monday chaired by President Megawati Soekarnoputri.
"Within days, the President will get the final draft so that
Bulog's will have its status changed to that of a Perum," Bulog
director Widjanarko Puspoyo said using the local acronym for a
state-owned company with both commercial and social functions.
He added that the full details would soon be announced.
Bulog is currently a state agency reporting directly to the
President.
Under its new status, Widjanarko explained, Bulog would not
only be in charge of safeguarding rice stocks, thus stabilizing
prices, but would also be allowed to seek profit.
"But its commercial operations will be limited to vital
commodities. From now on, these commodities will be restricted to
four; soybeans, corn, sugar and rice," Widjanarko added.
The government earlier said that the profits from commercial
activities could be used to partly cover the government's rice
subsidy program.
The change in Bulog's status would eventually improve the
agency's business competitiveness. But, equally important, it
would allow improved transparency in the use of the agency's
resources.
Since its establishment, Bulog has been dogged by financial
scandals.
In the past, Bulog was widely regarded as a cash cow for
corrupt government officials and their families, most notably the
cronies of former authoritarian president Soeharto.
Various reports have confirmed that unfavorable commercial
contracts, irregularities and weak supervision have led to
trillions of rupiah in losses.
The government plans to follow the example set by Malaysia's
logistics agency Bernas, which has a similar role to Bulog but is
now a publicly listed company in the neighboring country.
Founded in the late 1960s, Bulog is not only responsible for
the stabilization of unhusked rice prices.
Initially, it also held a monopoly on the importation of
wheat, sugar, soybeans and several other basic commodities.
However, this exclusive role was terminated in early 1998
following demands from the International Monetary Fund (IMF),
which organized a multi-billion dollar bailout loan for the
country.