Bulog chief 'chosen with mission to create profit'

JAKARTA (JP): Coordinating Minister for the Economy Rizal Ramli said on Friday that a new chief for the strategic National Logistics Agency (Bulog) had been chosen, and would be installed by Vice President Megawati Sukarnoputri in the near future.

Rizal declined to disclose the name, saying that the government was still looking for the "proper time" for the official inauguration.

"We already have (selected) the person. We're still looking for the proper time for Megawati to install (the new chief)", he told reporters at his office.

Rizal currently holds the Bulog chief position, which he assumed early last year before being appointed as the chief economic minister.

Rizal said that one of the important objectives of the new Bulog chief would be to continue the transformation process of the agency to become a semi profit-oriented state-owned company this year.

"We expect the new Bulog chief to be able to continue the reform process as well as achieve price stabilization (of unhusked rice)", he said.

"We have been making preparations to change the status of Bulog to become a Perum," he said, referring to the local term for state-owned company with both commercial activities as well as a social mission.

Founded in the late 1960s, Bulog is not only responsible for the price stabilization of rice.

Initially, the agency also held a monopoly in the importation of wheat, sugar, soybeans and several other basic commodities. However, this exclusive role was terminated in early 1998 following demand from the International Monetary Fund, which organized a multi billion dollar bailout loan for the country.

Bulog was treated in the past as the cash cow of the family and cronies of the former authoritarian president Soeharto.

Independent auditor Arthur Anderson revealed last year that Bulog lost Rp 6.7 trillion (US$705 million) between April 1993 and March 1998, due to unfavorable business contracts, irregularities and weak supervision.

Even President Abdurrahman Wahid is currently under attack over his alleged involvement in a financial scandal at Bulog.

The change of the status of Bulog will allow for better transparency of the use of the agency's resources.

Rizal had said earlier that the gains from commercial activities could be used partly to cover the government's rice subsidy program.

He said that the agency should manage on a more commercial basis its more than 1,500 warehouses scattered in various places, of which less than five percent were currently being utilized.

The overcapacity resulted from earlier, corrupt practices under which the agency's facilities were mostly built without any feasibility studies.

The government plans to follow the mode of Malaysia's logistics agency Bernas, which has a similar role to Bulog but is now a publicly listed company in that country.

New IBRA official

Meanwhile, Rizal declined to confirm whether Felia Salim had been appointed to replace Jerry Ng as deputy chairman of the Indonesian Bank Restructuring Agency (IBRA), who recently tendered his resignation.

"I have no comment on that," he said.

Sources have said that Felia, an official at the powerful Financial Sector Policy Committee (FSPC), had been appointed to replace Jerry.

The FSPC brings together several senior economic ministers led by Rizal and oversees the country's major banks and corporate restructuring processes.

Several legislators had earlier called on the government to end the role of the FSPC because it only slowed down the restructuring work of IBRA by making unnecessary interventions.

They also said that according to the existing rules, there was no obligation for IBRA to report to the committee, but to the finance minister.

There has been speculation that Jerry, a professional banker appointed last year to be in charge of bank restructuring work at IBRA, tendered his resignation because of the strong intervention by FSPC.

The appointment of Felia, a former director of the Jakarta Stock Exchange, could raise concern that Rizal was trying to concentrate further authority over the country's crucial bank and corporate restructuring program into his hands. Already, there has been speculation that Rizal is dominating the FSPC, often bypassing the finance minister.

IBRA is currently the country's most important financial agency, controlling over Rp 600 trillion worth of various assets transferred from closed and recapitalized banks. (rei)