Government to assess TNI businesses before taking over

Muninggar Sri Saraswati and Rendi A. Witular, The Jakarta Post, Jakarta

The government is now in the process of quantifying all enterprises belonging the Indonesian Military (TNI) to obtain accurate data before it moved to take them over.

State Minister of State Enterprises Sugiharto said a special task force set up by the Ministry of Defense was still detailing the businesses run by the Army, Navy and the Air Force before his ministry would be involved further.

"After the defense ministry completes its data on the businesses, we will then assess the performance and the profile of the enterprises," he said at the State Palace on Wednesday.

Sugiharto said he expected the businesses would be put under his ministry's supervision until after there was a decision to take them over, or there were clear details about the businesses.

Business assets owned by the military are estimated to be worth up to 10 trillion (US$1.06 billion).

The government is planning to take over all military-related businesses in an endeavor to make the military professional and help improve the welfare of soldiers.

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. The law strictly bans soldiers from involvement in any businesses to ensure the military focuses on defense, not commerce.

Coordinating Minister for the Economy Aburizal Bakrie, meanwhile, said the government's fact finding process was not a financial audit.

"We are unlikely to audit the companies until after we take them over and turn them into state enterprises. We will audit them later on (after the acquisition), and if there is a problem in their books we will fix them immediately," he said.

Aburizal said the government had no plans to immediately bail out the companies if they suffered losses or were heavily indebted.

The military has been involved in numerous businesses since the beginning of former president Soeharto's New Order era in the early 1970s when 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.

Both Sugiharto and Aburizal, however, could not say when the management transfer would begin, which enterprises would first be taken over, whether the military would get compensation from any takeovers, or whether military personnel would be allowed to be part of the management of the new businesses.