RI privatization too slow: Economist
RI privatization too slow: Economist
JAKARTA (JP): Privatization in Indonesia is very slow, leaving
most of the country's state-owned companies far from being market
oriented, a noted economist said yesterday.
"While the global privatization process has been proceeding
very quickly, privatization here is very slow," Djisman S.
Simandjuntak, the director of the Prasetia Mulya School of
Management, told a seminar on "Seeking a New Paradigm in
Indonesian Development".
The Indonesian government has frequently stated that it will
privatize several state-owned companies. But only four -- PT
Telkom, PT Indosat, PT Tambang Timah and PT Semen Gresik -- of
the more than 200 state-owned companies in Indonesia have been
privatized.
And despite the privatization of the four firms, the
government still holds the majority their shares.
"It means that the government still considers the existence of
the state-run companies as very important," he said at the one-
day seminar, which was organized by the Center for Strategic and
International Studies.
He said that the economy in Indonesia is still marked by many
anti-market forces. "The government, for example, controls the
prices of a number of commodities and services, such as fuel,
rice, cement, transportation fares and labor wages," he noted.
The government, Djisman said, should be friendly to the
market, which is an important element of good governance.
"And good governance is a must if we are to win against the
competition on the world market," he added.
According to the economist, companies will find it difficult
to win against the world competition if there is no good
governance in their own countries.
"We're still not good in governance. Problems concerning human
rights, labor rights and democratization are still concealed
rather than solved," he said.
Djisman said that it is companies which will compete in the
world market and it is the role of governments to create
conditions conducive for them to do business.
He noted that global comparative advantage is the ability of
companies to fulfill the demand of consumers all over the world.
"In this case many companies consider their local markets as
the 'area for training' to fulfill consumers' demands before
entering the international market," he said.
He said, however, that the very permissive attitude on the
part of Indonesian consumers is the weak point in trying to
improve many domestic firm's competitive edge.
He therefore suggested that Indonesian companies try to follow
the standards set by the International Standard Organization as a
way to prepare themselves for the increasingly tougher global
competition.
He said that any policy enabling Indonesian companies to
generate profit from lower-standard products and services should
be terminated. (13)