Selling privatization to workers

Selling privatization to workers

Strikingly different from the labor demonstrations and strikes
that took place earlier this year to demand higher minimum wages
and better working conditions, the current wave of industrial
action at a number of state companies seems to be unrelated to
basic worker rights.

Rather, the protests of state company workers appear more
driven by politics than they are against the government's
privatization policy and against foreign investors acquiring
stakes in state firms.

As stakeholders, state company employees have the right to
jointly determine management decisions and corporate policies.
That is what participatory management is all about. But opposing
corporate policies, which have been approved by the government
and the House of Representatives, as the legitimate
representatives of the shareholders, seems to be unreasonable.

The industrial action taken by state workers is irrational
because the privatization program is designed to further develop
state companies to be more competitive, hence more capable of
improving the welfare of their employees.

Given the fact that the government has been perceived as one
of the most corrupt in the world and even the most corrupt in
Asia, privatization should instead be welcomed as the divestment
will unshackle state enterprises from the complex web of
corruption, collusion and nepotism.

The program should especially be hailed as a magnanimous
admission on the part of the government that it, like most
governments in other countries, can never become a good manager,
and that its corruption-infested system will never be able to
develop good corporate governance at commercial entities.

Just look at the huge losses due to malfeasance and gross
inefficiency that were discovered recently by independent
auditors at such state companies as Pertamina, Garuda, Telkom,
Pelindo port management company and several others.

Don't state company employees realize that they, as taxpayers,
now have to carry the billions of dollars in losses caused by the
collapse of banks in 1998, in which the bulk of the losses
occurred at corrupt, collusion-ridden state banks?

Instead of mobilizing forces to oppose the privatization
program, state company employees should focus attention on seeing
that divestment is conducted under a fair and transparent system
and that basic worker rights be fully protected by new investors.

Opposing privatization now when the government has taken over
thousands of companies from closed and nationalized banks, in
addition to the more than 250 firms it already owns, does not
make any sense at all and could even sabotage the nascent
economic recovery.

Revolting against foreign investors acquiring stakes in state-
owned companies or distressed assets currently managed by the
Indonesian Bank Restructuring Agency would deprive the economy of
badly needed capital and better corporate governance. We should
remember that one of the main causes of the 1997 economic crisis
was poor corporate governance and corrupt government, and almost
all of the companies now languishing at the IBRA "hospital" for
bad debt restructuring are national ones, not foreign owned.

It is high time for the government, notably the Office of the
State Minister of State Enterprises and the management of state
firms to embark on nationwide, well-organized discourses with
labor unions to vigorously discuss the rationale and benefits of
the privatization program to the workers themselves and the
public in general.

In the current learning period of democratization, where labor
unions can easily flex their muscles to the point of being
radical, nothing is simple and easy anymore when it comes to
policy making and implementation, however rational it may be.

Moreover, the lack of understanding due to inadequate
communications, especially in the current political climate,
could make state company employees highly vulnerable to
exploitation by any party to advance their vested interests.

Succumbing to the workers' demands would hold state firms
hostage to corruption. Needless to remind that the cost of
failure in this area would be quite devastating: A fragile, weak
economic recovery and longer suffering for the millions of
children who cannot afford basic education and for the estimated
40 million workforce currently underemployed or unemployed.