State firms should lead economic recovery: Minister

YOGYAKARTA (JP): The 164 state firms should become the powerhouse to propel the country through its worst economic crisis in decades, a minister said on Monday.

State Minister of the Empowerment of State Enterprises Tanri Abeng said hopes of economic recovery now hinged on the state firms following the collapse of major conglomerates.

"At the moment when our conglomerates have gone bankrupt, we must empower our state firms so that they can become a powerhouse or locomotive to drive our economy out of the crisis," Tanri told journalists after officiating at a meeting of the Committee for Public Policy.

Tanri said the assets of all state firms, excluding the oil and gas giant Pertamina, totaled Rp 500 trillion (US$45 billion), up from a mere $500,000 in 1967.

According to Pertamina's reports, its total assets were Rp 32 trillion as of March 1996, excluding the assets of its contractors.

Tanri acknowledged that not all the firms were profitable -- about 54 percent are categorized as less healthy or unhealthy -- but said they still needed to be taken into consideration.

"Although many of them are not healthy, they are assets which we must empower."

His efforts, he said, were to restructure and privatize state firms to make all of the enterprises profitable.

He promised that all efforts to restructure and privatize state firms would be conducted transparently.

Tanri faced a public outcry when he moved to privatize steel producer PT Krakatau Steel and cementmaker PT Semen Gresik.

He was accused of not being transparent by offering a stake in Krakatau Steel to Ispat International without an open tender. He subsequently promised to publicly tender the sale of the stake in the firm.

The minister also met public opposition when he wanted to sell the majority stake in Semen Gresik to foreign investors. The West Sumatran community petitioned Tanri to refrain from selling PT Semen Padang, a subsidiary of Semen Gresik, to any foreign investor. Tanri bowed to the demand and revised the deal in Semen Gresik to ensure the government retains the controlling interest.

Tanri called on the public, especially critics, to continue to monitor the process of state firm restructurization and privatization.

He said the Committee for Public Policy would also give input to his office on how to restructure and privatize state firms.

Members of the committee include economists Anwar Nasution of the University of Indonesia, Bambang Sudibyo of Gadjah Mada University, Didik J. Rachbini of the Institute for the Development of Economics and Finance, Moslem scholar Nurcholish Madjid and Sultan Hamengkubuwono X of Yogyakarta. (23)