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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