Privatization lacks public support: Survey

Adianto P. Simamora, The Jakarta Post, Jakarta

The government's crucial privatization program lacked public support, a key element for the success of the program, according to a survey conducted by the faculty of social and political sciences at University of Indonesia.

The survey revealed that 49 percent of respondents in Greater Jakarta opposed the privatization of state-owned enterprises (SOEs), citing poor transparency in the sale process as one of the main reasons.

"Transparency has been a crucial problem for most respondents in the privatization program of the state-owned companies," Sri Budi Eko Wardhani, a researcher at the university, told reporters during the announcement of the survey result.

The survey was carried out via telephone interviews from Feb. 28 to March 7, covering 1,033 respondents in Jakarta, Tangerang, and Bekasi.

The survey said that 43 percent of the respondents agreed with privatization, and 8 percent abstained.

The government has listed some 24 SOEs to be privatized this year in a bid to raise some Rp 6.5 trillion (around US$650 million) in proceeds to help boost the 2002 state budget deficit.

During the past two years, the government failed in all its attempts to implement the privatization program partly due to protests from vested interest groups and anti-foreigner groups, including employees of the SOEs and politicians. One prime example was the failure in the sale of cement company PT Semen Gresik last year to Mexico's cement giant Cemex SA de CV.

Analysts said that without strong public support, it would be difficult for the government to carry out the privatization program.

But implementing the privatization program is crucial to help revive investor confidence in the economy and to maintain support from the International Monetary Fund, which is providing billions of dollars in bailout cash to the country.

Experts also said that privatizing SOEs was a significant step toward rooting out corruption within the SOEs which had long been treated as cash cows for various vested interest groups including politicians.

But a majority of respondents, 43 percent, did not believe that privatization would benefit the country due to concerns of widespread corruption regardless of who owns them.

Some 52 percent of respondents believed that past privatization attempts had not been transparent.

There was alleged manipulation and corruption in past privatization attempts under previous administrations.

Some of the SOEs up for sale this year include Semen Gresik, pharmaceutical firms PT Indofarma and PT Kimia Farma, telecommunications firm PT Indosat, coal mining company PT Tambang Batubara Bukit Asam, airport operator PT Angkasa Pura II and investment bank PT Danareksa.

The government expects to raise Rp 3.5 trillion in the first half of this year.