Govt reviews privatization strategy

Govt reviews privatization strategy

Berni K. Moestafa
The Jakarta Post
Jakarta

Stumbling in the sale of state enterprises, the government
said on Tuesday it was reviewing its privatization strategy which
is expected to come out early next year.

Coordinating Minister for the Economy Dorodjatun Kuntjoro-
Jakti said a privatization policy team had already been set up
and was now working on the new strategy.

"We want to work on it fast. Hopefully we can announce the
results in early 2002," Dorodjatun said in a press briefing after
a meeting between senior economic ministers.

"Once we have a road map (for privatization) and have the
cooperation of the Ministry of Home Affairs, we'll be able to
build a better platform to negotiate on without ignoring the
aspirations in the regions," he explained.

Efforts in divesting the government's stake in state firms
have often faced problems in the regions where the firms operate.

In some instances, resistance came from legislators who
rejected selling natural resources based firms to foreign
enterprises.

The most recent example being the planned sale of cement maker
PT Semen Gresik, a holding company with a unit in Padang, West
Sumatra.

Padang's political elite oppose the sale, arguing that Semen
Gresik's unit, PT Semen Padang symbolizes the region's pride.

Some legislators joined the protest fearing Indonesia would
lose control over its cement industry if it sold Semen Gresik to
a foreign company.

Another example was the protracted dispute that followed the
sale of a large oil palm plantation to a Malaysian company.

Again legislators raised antiforeign sentiment and moved to
block the sale. The government was able to push ahead with the
sale after lengthy debates with legislators.

Analysts on Monday said the problems that Indonesia's
privatization program faced were common in other countries.

They cited the public's resistance to change, fear of lay-offs
and corrupt management of state firms among the main reasons that
have slowed governments' privatization programs.