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)