Military must not get involved in business: Observer

JAKARTA (JP): Experts say Armed Forces' (ABRI) major ventures in business had not only violated the law but also damaged market mechanisms.

Indria Samego, a military observer and researcher at the Indonesian Institute of Sciences (LIPI), said that ABRI as a state institution was not allowed to do business and the fact that it had reigned in business over the last three decades had damaged market mechanisms in the national economy.

"The military's involvement in business is against the law and the way it has been doing business has made... an unhealthy (business climate)," he said in a discussion marking the launching of his book Bila ABRI berbisnis (When ABRI goes into business) here on Monday.

He cited how the military used its power and guns to run businesses. "In such a condition, no companies have dared to compete with the military's businesses," he said.

He also cited that professionals hired by ABRI to run its businesses have expanded from one sector to various other sectors easily because they were backed by generals.

The military, he charged, also created strong ties with Chinese-Indonesian businesspeople, who later dominated the economy.

"The military provided security for the Chinese-Indonesians in doing their businesses, and gained, in return, a certain portion of the profit for their service," he said.

Indria said ABRI started to go into businesses in the 1950s and had developed empires since the 1970s until now and no one dared to protest.

According to Indria's book, ABRI has been running 40 companies under the Army's jurisdiction and 24 other companies -- with eight being under the Air Force, Navy and National Police.

Several of the companies developed under the Army's Kartika Eka Paksi Foundation are PT Aerokarto Indonesia, PT Asuransi Cigna Indonesia, PT Cilegon Fabricators, PT Kayan River Indah Plywood, PT Kultujaya Triusaha, PT Lukita Wahana Sari, PT Meranti Sakti Indonesia, PT Panca Usaha Palopo Plywood, PT Pondok Indah Padang Golf, Bank Arta Graha and PT Private Development Finance.

The Navy-owned companies include Bank Bahari, PT Admiral Lines, PT Yala Trading, Bintan Beach International Resort while companies run by the Air Force include Bank Angkasa, Dirgantara Air Service, Angkasa Puri and Cardig.

Companies which are under the National Police's jurisdiction are PT Tansa Trisna, PT Bhara Induk, PT Braja Tama, PT Braja Tara, PT Asuransi Bhakti Bhayangkara, PT Sapta Pirsa Mandiri and PT Bhara Union.

Beside the numerous companies, the Army, Navy, Air Force and National Police are also running their own cooperatives to improve their members' welfare, said Indria.

He said ABRI had played not only its now much-criticized dual function but is also multifunctional, because it has been present not only in defense and politics but also in the legislative bodies, bureaucracy and businesses.

Harry Tjan Silalahi, a political expert from the Center for Strategic and International Studies (CSIS), shared Indria's opinion and suggested that ABRI return to its traditional role in defense.

As a compensation for the businesses lost, its members' wages should be increased, he said.

"I think the annual defense budget should be increased not only to improve ABRI's professionalism but also to improve its members' welfare," he said.

He also said people did not object to ABRI establishing cooperatives to improve the welfare of its soldiers.

Abdulla Toha, the general manager of Ummat weekly, agreed and said the military should pull out of business and prioritize its task in defense and security. (rms)