Wed, 19 Apr 2000

Laksamana says no sign his job is at risk

JAKARTA (JP): State Minister of Investment and State Enterprises Development Laksamana Sukardi said on Tuesday President Abdurrahman Wahid gave no indication to him his job might be on the line.

"I met with Gus Dur (the President's nickname) several times over the past few weeks but he never indicated that I would shortly be replaced," Laksamana said in reply to rumor he would be fired.

Political circles have been abuzz in recent weeks with rumors that Laksamana, who represents Vice President Megawati Soekarnoputri's Indonesian Democratic Party of Struggle in the Cabinet, would be replaced by a senior official in his office who was allied with another major political party.

Political parties are reportedly vying for Laksamana's position, which is considered strategic for raising funds through its authority over all state companies.

Informed sources said on Monday that some officials in Laksamana's office often sabotaged his drive to clean up state companies from corrupt managers.

The sources said the transparent system introduced by Laksamana to select managers for state companies also was often undermined by strong political lobbying.

Laksamana, who talked to reporters on the sidelines of a seminar, added he would not implement some of the policies adopted by his predecessor, Tanri Abeng, notably the plan to set up 10 holding companies to manage all state enterprises.

"Forget it. The International Monetary Fund and Asian Development Bank did not agree on the plan. Besides, it will only create more bureaucratic layers and reduce the transparency of companies," Laksamana added.

Liquidation

Laksamana said money-losing public companies which did not hold good future prospects would be closed.

Economist Didik Rachbini concurred that Laksamana should not hesitate to liquidate nonproductive state firms.

"The ministry can start with liquidating such unviable companies as Semen Kupang, Sarana Karya, PANN, Kliring and Soda," Didik said after the seminar.

Commenting on a foreign survey on the government's policy on foreign investment, Laksamana admitted the government failed to satisfactorily respond to concerns and complaints raised by international investors.

He blamed the failure mainly on the lack of commitment and coordination among government institutions related to foreign investment activities.

"Government institutions are going their own way, speaking different languages in handling foreign investors. No wonder foreign investors see us as unresponsive to their concerns."

Laksamana was commenting on the latest Asian Intelligence report issued by regional consultancy firm Political and Economic Risk Consultancy Ltd. (PERC). The report ranked Indonesia as the second most unresponsive Asian country to foreign investor concerns after China.

The report said foreign investors did not experience serious problems in channeling their concerns to the Indonesian government. However, while they could gain access to senior government leaders, even such officials "usually can have only limited effectiveness in getting bureaucracies to set aside turf wars", PERC said.

It polled more than 500 expatriates working in Asia in the first quarter this year and found there was a gap between measures to help foreign investors and the delivery of results, according to an AFP report.

PERC named Singapore, Hong Kong and Taiwan as the best three Asian countries in terms of satisfactory responses to foreign investor concerns.

A member of the National Economic Council, Anggito Abimanyu, said he was unsurprised by the report's findings.

Anggito said foreign investors were dismayed by the lack of legal certainty in Indonesia, a condition that adversely affected their businesses here.

Indonesia's legal system spooked foreign investors after the district court in Tondano, North Sulawesi, ordered mining company PT Newmont Minahasa Raya to close its gold mine in the area for failing to pay back taxes on mining overburdens.

In North Sumatra, PT Inti Indorayon Utama pulp and rayon producer has stopped production since mid-1998 due to strong protests from locals alleging environmental damage caused by the company's operations. (cst)