Privatizing quick quick

I refer to Mr. Seamus McElroy's letter Privatizing slowly- slowly in The Jakarta Post on Sept. 11, 1998. He is right on the mark. Not only is the privatization of state enterprises necessary, it should have begun last October.

Permit me to give an example. In July, Brazil privatized its telecommunications company in a no holds barred total sell off in which foreigners were free to buy a 100 percent stake. Bidders paid US$19 billion, 60 percent over the minimum asking price. Had they not privatized the company in July and instead waited for October's election, the money raised through the sale would have been cut by half as a result of the Russian meltdown. Furthermore, a demonstrated reluctance to privatize would have sent the wrong signals to the market and the government may have been force to devalue the Real. The lesson is clear -- the longer you take to become integrated into the global economy, the harder it is to do. And there is no alternative.

Would it be better to privatize Garuda Indonesia immediately or continue to cut it in size until it ends up closing down as Philippines Airlines announced it would have to last week? Indonesia is not sending the right signals to the market. When will PT Telkom be privatized? Is there a plan for an agency to regulate telecommunications in a privatized environment? It is not good enough to simply transfer a state monopoly into the private sector, so will licenses be issued to other companies so that they can set up operations and compete with a privatized Telkom? These are a few of the questions the market would like to have answers to. The lukewarm talk of making state enterprises profitable before selling them and of possible restrictions to investment is not convincing the market.

OSVALDO COELHO

Jakarta