Reorganizations at state firms await new rules

Reorganizations at state firms await new rules

Rendi A. Witular, The Jakarta Post/Jakarta

Criticism directed at President Susilo Bambang Yudhoyono on the
100th day of his administration continues to pour in, this time
from his own aide State Minister of State Enterprises, Sugiharto,
who claimed that the failure to revitalize state enterprises was
partly the fault of the President himself.

Sugiharto argued that the delay in the issuance of a new
government regulation on his office's new organizational
structure has effectively hampered the anticorruption drive in
state firms, despite the fact that these firms have been
systematically milked by bureaucrats for decades.

"Unless the President gives his approval for the new
regulation, I can't replace any key officials in my office or any
executives in state enterprises," he told reporters at the State
Palace recently. "I am still waiting for it (the regulation) so
that I can get to work."

The reshuffle plan for the state minister's office and heads
of state enterprises was part of Susilo's 100-day economic reform
agenda. The plan was considered a strategic move to help improve
the performance of state enterprises and to combat the rampant
corruption that occurs in these firms.

Most state enterprises have been poorly managed for a very
long time and suffer from very low rates of return on investment
due to the intervention of vested political interests, which
often use the companies as cash cows for political parties.

The state minister's office is currently facing the daunting
task of recruiting professionals to sit on the new board of
directors for national flag carrier Garuda Indonesia.

Garuda management has been in limbo for more than a year
following the failure of the previous government to appoint a
replacement board due to alleged collusion in the selection
process.

Susilo himself earlier this week urged executives of state
enterprises not to provide facilities for people claiming to be
members of his family or other key state officials, saying that
"such a practice is at the root of corruption and must be
stopped."

Despite the absence of the necessary regulation, Sugiharto was
optimistic that it would not discourage him from working to
improve the performance of state enterprises.

In his early days in power, Sugiharto had planned to replace
most of the incumbent key officials at his office, following
allegations from the business community and legislators that the
officials were involved in corrupt practices.

The changes are not critical because three of the state
minister's six deputies have resigned due to illness and
retirement. The posts have remained empty until now.

A high-ranking official at the state minister's office, who
requested anonymity, said many officials were reluctant to work
as their futures were shrouded with uncertainty following the
delay in the reshuffle program.

"The uncertainty has concerned the officials. They are always
wondering whether they are going to be replaced or not. Pak
Sugiharto must immediately make up his mind and appoint new
officials to end the uncertainty," he said.

However, Sugiharto said the management reshuffle at state
firms could only be done if his own office had already appointed
new people into the new structure.