Govt to maintain control on state firms
Govt to maintain control on state firms
JAKARTA (JP): Minister of Finance Mar'ie Muhammad said yesterday that the government would maintain its control over important state-owned companies despite the liberalization trend in the world economy.
"We should not be overzealous and take unnecessary actions in response to liberalization," he told a parliamentary session, which will close tomorrow.
The minister said that state-owned companies, especially those operating in essential business fields, are still needed to carry out the government's missions.
The minister was answering a question about the government's future policy on managing state-owned companies, which are often criticized for their poor business records.
"Government control over important state-owned firms remains essential even in a developed country," the minister told the Budgetary Commission of the House of Representatives.
The minister's remarks were made as the commission reviewed how the 1993/1994 state budget was implemented.
The minister said the government's pursuit of greater liberalization does not imply a scrapping of control over state firms.
Indonesia should strengthen business efficiency in all sectors to enable the country to compete in this era of liberalization, he said.
The government should be prepared to liquidate its losing firms for the sake of the national efficiency program. Otherwise, he added, their operations will become a problem to the country's economic system.
The government has partly privatized four major state-owned companies -- PT Semen Gresik, PT Tambang Timah, PT Indosat and PT Telkom -- through local and overseas stock exchanges. Other major state-owned firms are now being prepared to follow suit.
The government remains a majority shareholder despite the privatization of the major state-owned companies.
There are more than 180 state-owned companies operating in the country at present, with total estimated assets of around Rp 358 trillion (US$162 billion).
The Directorate General for State Enterprises said only 155 state-owned firms are performing soundly, booking combined net profits of around Rp 4.5 trillion in the 1993/1994 fiscal year.
The state-owned companies, which mostly operate in less profitable business fields, are required to set aside up to five percent of their net profits to help small-scale firms.
The minister said that the requirement will not be relaxed. He added that the funds generated from state-owned companies would not only be used to support small-scale companies, but also to stimulate economic activities in the country's least developed villages.(hen)
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