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.