Privatization will benefit economy, VP says
Privatization will benefit economy, VP says
Rendi A. Witular
The Jakarta Post/Jakarta
Defending its stance over the privatization program, the
government has asked for public understanding for its plans to
sell state firms that make little contribution to the state,
arguing it would eventually benefit the economy in general.
"There will be an economic efficiency if the government sells
unprofitable state firms. The firms were formed during the Dutch
colonial era and have now become burdens to the state," Kalla
said after the Friday prayer.
The government would conduct further study for one month
before deciding which companies are to be merged or sold to the
public or to local administrations, he said.
The government, however, would not be selling companies
cheaply.
"In the future, state companies that remain under government
control are the ones that are strategic, have good prospects and
are profitable, as well as operating for the public benefit," he
said.
At present, the government is burdened with managing 158 state
companies with combined assets worth about Rp 1,300 trillion
(about US$133 billion). However, only about a dozen of them
contribute any revenue to state coffers.
Most of the companies are currently in bad shape due in part
to mismanagement and corruption amid the government's limited
ability to properly supervise and set clear-cut policies to
develop them.
The government is now trying to speed up the sale of several
unprofitable and burdensome state enterprises, in particular
those enterprises that have no public service obligations or that
are not strategic in any way.
Almost always, however, such plans draw criticism and carry
risks of being politicized, with narrow sectional interests
saying that privatization goes against the national interest.
According to the blueprint on the development of state firms
issued by the Office of State Minister of State Enterprises, the
government will only sell an entire stake in companies that do
not give any advantage to the state.
As for profitable companies, the government will only sell a
part of its stake via the stock market, with the aim of helping
to plug the budget deficit. Under this program, this year
proceeds from privatization of state assets have been set at Rp
3.5 trillion.
Among the state companies included in such category are Bank
Negara Indonesia (BNI), and mining companies PT Antam, PT Timah
and PT Bukit Asam Batubara.