Govt should sell all its assets: Kadin

JAKARTA (JP): The government should sell all its stakes in state-owned companies to foreign investors to gain more funds to restore the country's economy, the Indonesian Chamber of Commerce and Industry (Kadin) suggests.

The chamber's chairman, Aburizal Bakrie, told members of the House of Representatives yesterday that the government now needed more funds than ever to fuel and stimulate economic activities.

"The business sector thinks that the government must monetize all its assets to get a large source of funds," he told a hearing with House Commission VIII for the state budget and finance, and research and technology.

Aburizal, widely known as Ical, said foreign investors should be able to own majority stakes in state companies.

The government is currently in the process of privatizing 12 state firms to raise Rp 15 trillion (US$1.07 billion) to help finance the huge budget deficit, which may reach 8.5 percent of gross domestic product in the current fiscal year ending March 1999.

Ical said that by selling its stakes in state companies, the government would gain much more than it currently did.

Aside from higher sales value, the government would get more in taxes from the companies, he said.

The companies would likely be managed more efficiently by foreign investors than they would under the government's management and they would in turn provide more job and prevent mass lay-offs, he said.

There would be no more untransparent reshuffling of key executives as that often practiced by the government, he said.

Ical dismissed suggestions that government should use its assets as collateral to secure loans, saying the move would only put the country into further debt.

When the loans mature, the country might not even be able to pay the interest, he added.

Asked whether selling the government's assets would be good for the country, he said "So what?"

"Why do we have to have assets? Why does the government have to own a company? There is no use for it," he said.

Currently the government has some 160 state firms operating in a wide range of fields, from trading to public utilities. (das>