SOEs better to be led by business professionals

Fitri Wulandari, The Jakarta Post, Jakarta

The government should use business professionals instead of bureaucrats to manage and lead state-owned enterprises (SOEs) as they had a better understanding of business operations, a former minister said

Tanri Abeng, former minister of state enterprises and once dubbed as the country's most expensive business executive, said that many SOEs were underperforming because they were not supported by real business professionals.

"State enterprises should act like a business entity, but our bureaucrats are truly bureaucrats who don't have a grasp of business. They make moves based on power not market mechanisms and there is not a culture of democracy," Tanri told a press conference held on Tuesday to promote the start-up of his business school called the Executive Center For Global Leadership (ECGL).

President Megawati Soekarnoputri is slated to preside over the opening ceremony for the ECGL on Feb. 2 in Bali.

"As long as SOEs are bureaucratic entities and not business entities, they will never progress," Tanri stressed.

One of the solutions, he said, was for bureaucrats in the SOEs to be educated as true business professionals.

"They need training to update their skills and knowledge in leadership and business and open them up to new perspectives," Tanri added.

With training, they could change their old-fashioned bureaucratic culture when it comes to SOEs, he stressed.

Indonesia has some 150 SOEs, most of which are considered inefficient, money-losing operations.