Privatization can proceed: Top lawmakers

Privatization can proceed: Top lawmakers

Dadan Wijaksana, The Jakarta Post, Jakarta

The government can go ahead with its privatization plans without
having to wait for the passage of a bill on state owned
enterprises (SOEs) currently under deliberation at the House of
Representatives, senior legislators said.

Chairman of the special committee discussing the bill, Irmadi
Lubis, told The Jakarta Post on Sunday that for certain programs
that have been approved, they could be carried out as planned
without having to worry about the legal consequences.

"There is an existing legal basis to carry out the plans, the
country's five-year development program (Propenas) and the
People's Consultative Assembly (MPR) decree. So, for those
companies that have gained approval to be privatized, they can go
ahead," he said, adding that the demand to design the special
bill on SOEs has never been intended to slow down the crucial
privatization program.

The special committee, which includes all nine factions within
the House, expects to complete the debate on the bill in May or
June, he added.

Max Muin, chairman of House Commission IX on finance and state
budget, which also oversees privatization issues, backed Irmadi's
remarks, saying: "Based on the existing procedures in the House,
it's OK not to wait for the approval of the bill."

This should provide some respite for the government which has
been under pressure from some legislators and politicians to
cancel its privatization program altogether due to the absence of
a law on SOEs. The issue has been the latest ammunition of anti-
privatization campaigners.

Under the privatization program, the government aims to
collect around Rp 8 trillion (US$880 million) this year in
proceeds to be used partly to help plug this year's budget
deficit, projected at Rp 34 trillion.

A delay or a slowdown in the privatization program would not
only threaten the state budget, but would also affect investors
confidence in the government economic reform drive.

The government has said that privatization is not only aimed
at raising cash for budgetary purposes, but it is also aimed at
restructuring the country's strategic industries so they can
perform at a high level of efficiency, a move which would prove
helpful in the globalization era.

Faisal Baasir, deputy chairman of Commission IX said that the
government should learn from past mistakes if it wants to avoid a
backlash in its state asset sale program.

"What's been missing from the implementation of privatization
is transparency, which has proved to have fueled the long-lasting
debates over the government's inability to execute the program
properly," he told the Post.

If the program was carried out transparently, there would have
never been controversy such as in the Indosat case, he added.

"In principle, we (legislators) have no objection to the
program, but it needs to be conducted in a way that can benefit
the country the most."

The government sold a stake in telecommunications firm PT
Indosat late last year to Singapore Technologies Telemedia. Many
criticized the sale partly due to the lack of transparency and
alleged corruption. Some legislators are planning to investigate
the case.