The Pertamina expose

Although in Jakarta it was an open secret that corruption was rampant in state-owned oil company Pertamina during Soeharto's 32-year New Order regime, it still came as a shock, if not a surprise, to many that the firm suffered a staggering US$6.1 billion in losses from corruption and gross inefficiency in the past two years.

The finding, based on a recent independent audit by Price Waterhouse Coopers, is all the more disturbing because a previous audit by the Development Finance Comptroller, the state agency assigned to audit state-owned companies, gave an "unqualified" rating to the firm's financial reports for the period April 1996 through March 1998, meaning that no irregularities were uncovered.

The public has the International Monetary Fund to thank for bringing the losses to light. The independent audit, after all, was part of the reform measures agreed upon between the government and the fund as a precondition for its much needed assistance.

In the meantime, the expose raises a few disturbing points. First of all, $6.1 billion is no small amount of money, especially in these crisis-ridden times. According to a report released by the Central Bureau of Statistics last week, 49.5 million Indonesians, or 24.2 percent of the country's population, lived in poverty at the end of 1998. The tidy sum of $6.1 billion would have gone a long way in helping to better the lives of our country's poor.

With living below the poverty line defined as monthly income of Rp 96,959 or less for residents of urban areas and Rp 72,780 or less for rural dwellers, it would take about Rp 12,748,000,000, equivalent to about $1,902,686, to help almost 50 million poor Indonesians to subsist for a month. It takes simple arithmetic to realize that $6.1 billion in stolen and squandered money constitutes an obscene amount.

A second point raised by the recent audit findings is that if the huge incidence of graft, incurred over a span of two years, could have remained undetected in one state company but for a change in circumstances, it would be disconcerting to think of the total amount lost to corruption and inefficiency in all the state companies over that same period. And one hardly dares imagine the magnitude of the losses incurred through corruption and inefficiency throughout the New Order's long rule.

In the final analysis, this case should serve as a strong reminder of the urgency of a thorough cleanup in all our state enterprises. At the same time, it is bound to ignite more skepticism concerning the efficacy of our audit agencies. The best of our analysts and experts have reminded us of the need to put in order our state enterprises -- and warned of the risks and dangers of failing to do so. Given the state of our business and government agencies at present, it will be the honorable but unenviable task of the new government to set the matter straight.