BUMN: Govt cash cows

BUMN: Govt cash cows

It is no secret that state-owned enterprises (BUMN) have long been the government's cash cows.

This may have come about because the companies are closed to the public and the government has been able to unlawfully exploit the companies via legal means. The government calls these BUMN 'agents of development with social functions'.

Since the International Monetary Fund (IMF) came to Indonesia, one by one, the BUMNs have been 'stripped' by thorough auditing. The National Logistics Agency (Bulog), state oil and gas company Pertamina and state electricity company PLN were audited from 1999 to 2000, amid strong reactions from both the public and the companies' managements. The audits showed that the companies had suffered financial losses.

Another five state enterprises -- PT Garuda Indonesia, PT Jasa Marga, PT Telkom, PT Pelabuhan Nusantara II and PT Perkebunan Nusantara IV -- were audited later, with similar conclusions.

Last week, the Ministry of Finance announced the results of an audit on another five BUMN: PT Dirgantara Indonesia, PT Kereta Api Indonesia, PT Pupuk Sriwijaya, PT Taspen and PT Semen Gresik. The independent auditors revealed that the total financial losses of the five amounted to more than Rp 17 trillion, and that the losses were due to the companies' failure to perform in accordance with international standards.

The enterprises' financial losses were not the impact of the companies poor management systems -- government policies, such as those for PT Kereta Api Indonesia and Pupuk Pusri, played a significant role.

State enterprises are just like private companies, and are profit-oriented, and the government benefits from their dividends and taxes.

It is time for state-owned enterprises to be freed from their obligation to public service -- which is mainly the responsibility of the government. This way, state enterprises may improve their performance and competitiveness.

-- Bisnis Indonesia, Jakarta