Privatization 'must not ignore workers'
Kurniawan Hari, The Jakarta Post, Jakarta
As opposition from workers to privatization drives mounts, scholars are calling for more dialog and a longer preparation period before a state-owned enterprise is privatized.
They also urge the government to draw a clear line between companies that are for sale and those it wants to keep.
"Privatization in any country brings layoffs. There must be dialog between the employer and the workers because it is a very sensitive situation," said Dradjad H. Wibowo of the Institute for Development, Economics, and Finance (Indef) here on Monday.
According to Dradjad, the preparation needed before the privatization took place not only covered technical and financial aspects, but social and political ones too.
Employers ought to inform workers about what their future might be after the company was privatized, he said.
"Maybe, employers can offer early pensions or partnerships to the workers. Principally, the companies should develop entrepreneurship in the workers," Dradjad told The Jakarta Post by phone.
Dradjad was asked to comment on the opposition to privatization articulated by nearly 120 labor activists during a national conference here on Sunday.
Closing their three-day national conference, the labor activists jointly rejected the privatization of state-owned enterprises.
Dita Indah Sari, one activist, said free trade and privatization had not brought prosperity, equality or peace, but only misery to Indonesian workers.
Such opposition, Dradjad said, was to be expected, as it had also taken place in Australia when the government planned to sell Qantas, an airline company.
The opposition later died down after the privatization process was shown to be a success, he added.
Meanwhile, Boni Setiawan from the Institute for Global Justice suggested that the government differentiate between those state companies acceptable for privatization and those that were not.
According to Boni, state companies that managed essential public services, such as electricity, transportation or water supply, ought not to be sold to private companies.
"I think it would be better to boost the performance of the state companies rather than selling them to private companies," Boni told the Post.
Both Dradjad and Boni agreed that state companies within the agriculture sector (PTP) ought to be privatized because they had become a haven for corruption.
The government has planned this year to sell 25 state companies to the private sector in a move to earn Rp 6.5 trillion to plug the budget deficit.
Among the state companies listed for sale are PT Indo Farma (pharmaceuticals), PT Pupuk Kaltim (fertilizers), PT Krakatau Steel (steel), PT Telkom and PT Indosat (telecommunications), PT Angkasa Pura II (airports), and PT Pelindo (seaports).
The government also planned to sell PT Tambang Timah Bukit Asam (mining), PT Semen Gresik (cement), and PT Kimia Farma (pharmaceuticals).
Dradjad reiterated that before privatization took place the government should first of all study if any companies were socially or politically sensitive to local people.
He added that the process of privatization should not be carried out purely to obtain money to plug the state deficit.
"If the privatization process were solely aimed at reaching the target, it would ignore the social and political aspects," he said.