Mon, 17 Apr 2000

State enterprises and conglomerates

Around the beginning of 1990 there emerged a controversial idea to recruit executives of certain prominent private companies to hold the positions of top management at certain strategic state enterprises (BUMN). At the time it was intensively blown up into a negative image that most BUMN employees were inefficient and the directors were in the style of typical bureaucrats and were deemed to have no business acumen.

Some people considered that most directors of BUMN lacked the courage and enthusiasm to enter into international competition because they had no self-confidence, trading networks, experience and so on. Certain entrepreneurial groups who were considered as powerful conglomerates took advantage of this condition.

In the New Order era, these entrepreneurs received a lot of praise for their success. Afterward, a dramatic change turned the table and the people became aware of the acrobatic show of these tycoons. They were successful as a result of grabbing and stealing a lot of money from certain banks by dealing in corruption, collusion and nepotism (KKN) with the corrupt officials. They themselves grow rich albeit their companies were declared insolvent or bankrupt while the banks suffered great losses because of bad debts as the result of KKN.

Affliction, misery, unemployment and poverty arising from the terrible behavioral performance of the pseudo conglomerates constitutes the tragic and gray history of this nation. In addition to the tragedy, this republic also has to bear an extraordinary amount of national debt. Indonesians do not wish for this catastrophe to appear and happen again in the future.

Although in the New Order era BUMN was considered the headquarters of kleptomaniacs, in comparison to companies owned by the pseudo conglomerates, certain major BUMN, including fertilizer companies have given established evidence that they not only have been surviving, but have made large profits from exports, even though Asian countries, including Indonesia, are still in the grips of an economic recession. It seems that the current government is restructuring BUMN in all aspects.

Nevertheless, some people are of the opinion that the government should not ask politicians or political leaders to join in such efforts by appointing them to hold the positions of BUMN directors. As profit making organizations and in order to face keen international competition, BUMN should be managed by executives whose professionalism, expertise and business acumen have been proven. Otherwise, we put the future and viability of BUMN in jeopardy. It is not wishful thinking to expect all of BUMN to be profit making by the end of 2002, provided that all state enterprises are managed by professional executives whose integrity and capability are in no doubt.

Last but not least, BUMN should be free from the influence of any political force. In the New Order era, BUMN were fully involved in disguised activities of fund raising in the interests of a certain political organization. Nowadays this should be avoided. The unfair game is over and should not be recommenced.