Govt told not to push privatization program

The Jakarta Post, Jakarta

Experts warned the government not to press ahead with its privatization program without support from employees of the state-owned enterprises (SOEs) and other stakeholders.

"The government has to be patient and must talk with all stakeholders. Don't force it because it's very dangerous," senior economist Mubyarto said at a seminar on economy on Wednesday.

He also warned that selling state assets to foreigners would make the country's economy vulnerable to foreign interest.

Former finance minister Bambang Sudibyo concurred, saying that the stakeholders had often been neglected by the government.

"The voice of the employees and the public in general must be heard. This has been neglected by the government," he said.

Outspoken politician, Sri Bintang Pamungkas also opposed the government privatization plan, saying that in SOEs had long been treated as cash cow by the government to obtain money without looking into hardship endured by the under-paid employees for years to develop the SOEs.

"And now they're going to sell the SOEs to foreigners," he said.

The government plans to privatize several SOEs this year in a bid to help finance the 2002 state budget deficit estimated at 2.5 percent of gross domestic product.

According to a document prepared by the Office of the State Minister of State Enterprises for the House of Representatives Commission IX on financial affairs, the government expects to raise between Rp 7.3 trillion and Rp 9.25 trillion from the sale of six SOEs.

The figure includes expected proceeds of between Rp 4 trillion to Rp 5 trillion from the sale of a 45 percent stake in the publicly-listed international telecommunications operator PT Indosat to foreigners.

The privatization proceeds in the current state budget is set at Rp 6.5 trillion.

But the government privatization plan has recently met strong opposition from various parties including employees. The labor union of state-owned post and telecommunications companies, for example, has planned to stage a strike which would affect telecommunication services unless the government cancels the planned sale of Indosat.

The employees fear they would lose their jobs if Indosat falls into foreign control.

Meanwhile, State Minister of State Enterprises Laksamana Sukardi, said on Wednesday that he planned to hold talks with stakeholders including employees, and legislators to gain support for the privatization program.

He did not elaborate.

Elsewhere, Bambang urged the government not to sell a controlling stake in Indosat to foreigners because the company was considered strategic to national security.