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