State enterprises and conglomerates

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.

HASAN BASRI MUCHTAR

Jakarta