More autonomy urged for state companies

More autonomy urged for state companies

JAKARTA (JP): State-owned companies need more freedom in
management and more qualified managers to make themselves
competitive and efficient, experts said here over the weekend.

Frans Seda, chairman of the PPM Foundation, told journalists
after attending the graduation ceremony of the PPM Graduate
School of Management on Saturday that many state companies are
inefficient because they are burdened with missions set out for
them by the government.

"The most effective way to remedy inefficiency in state
companies is reducing the governmental missions and giving them
more freedom, as well as more autonomy, to do business," Seda, a
former minister of finance, said.

He suggested that the government recruit qualified managers to
manage state companies, especially those which need "helping
hands".

"If necessary, the government can hire private managers to
mend the problems," Seda said.

He added that the current recruitment of managers at state
companies, which takes only civil servants, is not proper.

Meanwhile Julius Tahija, chief commissioner of Bank Niaga,
noted that the leadership capability of managers still plays an
important role in making state firms efficient.

"The performance of state companies still depends largely on
the quality, integrity and perseverance of their managers. And
unfortunately, the crisis of leadership occurs everywhere,"
Tahija said.

He said that integrity is the most important side of the
managers because lack of integrity can lead to practices, such as
collusion, manipulation and corruption.

Supporting Tahija's argument, Anugerah Pekerti, director of
the PPM Institute, said the inadequate legal framework allowed
such practices to happen.

"We should strengthen our legal framework so that it can limit
bad practices and facilitate fair competition," Pekerti said.

Commenting on the government's current privatization of state
companies, Pekerti said the policy is leading in the right
direction.

"Privatization will make them more efficient. Thus, the
government should privatize all non-strategic state companies,"
he suggested.(rid)