Government muscles in on military businesses

The Jakarta Post, Jakarta

To enforce the new law on the military, the government will start taking over all military businesses in an endeavor to make the Indonesian Military (TNI) professional and help improve the welfare of its personnel.

State Minister of State Enterprises Sugiharto said on Tuesday that he had recently held talks with relevant officials to discuss the possibility of putting the management of all military business entities under his supervision.

"Three weeks ago we held a coordination meeting with Minister of Justice and Human Rights Hamid Awaluddin and Minister of Defense Juwono Sudarsono on the possibility of transferring the management of military business entities to our office," he said on the sidelines of a one-day summit on state-owned enterprises.

He said he had asked minister Juwono to provide in detail a list of all enterprises belonging to the Army, the Navy, the Air Force and the TNI Headquarters in order to obtain accurate data on military businesses either in the form of companies, foundations or cooperatives.

However, the coordination meeting involving the three ministers did not formulate any mechanism for the companies' future management, Sugiharto added.

He could not say when the management transfer would begin, which enterprises would first be taken over or whether military personnel would be allowed to be part of the enterprises' new management.

Since president Soeharto's downfall in 1998, the civilian government has been pressured to take over the military businesses in order to complete the internal reforms inside the TNI.

Law No. 32/2004 on the TNI stipulates that the government must take over all business activities of the military within the next five years as part of sweeping reforms within the powerful military.

The law, signed by former president Megawati Soekarnoputri in October, strictly bans soldiers from involvement in any business activities to make the military institution professional and to ensure all military personnel focus on their defense role.

The TNI has been involved in numerous businesses since the beginning of Soeharto's New Order era in 1970 because the government was unable to meet the military's financial needs. Almost 70 percent of the TNI's annual budget comes from its business activities.

Minister Juwono recently said the government would take over only enterprises that had assets worth Rp 5 billion (US$550,000) or more while smaller ones would continue to be run by the TNI.

His statement sparked strong reactions from major factions in the House of Representatives, which want the TNI to abandon all business activities to make it professional.

Assets of the business enterprises owned by the military range from Rp 1 billion to Rp 5 trillion.