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.