Proceeds target for SOEs too burdensome: Official

Proceeds target for SOEs too burdensome: Official

YOGYAKARTA (JP): A high-ranking official at the ministry of
finance voiced here on Friday doubts over the ability of state-
owned enterprises (SOEs) to meet the profit and privatization
targets set by the government, citing the unfavorable social and
political conditions.

Director general for state enterprises I Nyoman Tjager
indicated that the targets were too burdensome.

"It is not easy for the management of SOEs to meet the targets
given the current situation," Nyoman said following a workshop on
state-owned enterprises at the Yogyakarta Sheraton Hotel.

The workshop was organized by Gadjah Mada University's
Department of Economics.

The government initially set the profit transfer target from
the SOEs at Rp 10.5 trillion, but this target was revised
downward to Rp 9 trillion last month.

Minister of Finance Rizal Ramli recently announced that the
government had raised the targets for tax and excise revenue,
profit transfer from SOEs, asset recovery from the Indonesian
Bank Restructuring Agency and the privatization of SOEs by
between 5 percent and 20 percent.

Thus far there have been no details of the target increases
for each sector.

Nyoman said his office expected the SOEs' total profits this
year to be Rp 19 trillion, up from Rp 12.3 trillion last year
following the increase in the government's profit transfer
target.

He also said the privatization target of Rp 6.5 trillion for
this year would be difficult to meet for the SOEs.

He asserted that the privatization of state enterprises had
attracted numerous investors, but the unfavorable social and
political conditions had discouraged them.

"How can we do business if there is no certainty?" he said.

Nyoman, however, pledged to meet the targets while demanding
the SOEs be given a conducive climate to operate.

"Just trust them (SOEs) and provide them with a good
environment to work in," he said.

Nyoman also said the trend of regional governments seeking to
benefit from the operation of SOEs in their areas, including
demanding free stakes in the SOEs, had added to the burden
shouldered by the SOEs.

He said it was not necessary for the regional administrations
to pressure the SOEs because they would benefit from their
operation in the end.

He said the contributions from SOEs to the state budget would
be distributed to the regional administrations in various forms
of financial aid.

"State-owned enterprises also make an important contribution
to regional governments by providing jobs," he said. (44)