Thorough assessment of state firms urged

JAKARTA (JP): Comprehensive assessment of the overall performances of state-owned companies is prerequisite to entering the free market era, a senior government official said yesterday.

Marzuki Usman, the chairman of the Educational and Training Agency of the Ministry of Finance, said here yesterday that the assessment should be conducted to determine the strengths and weaknesses of the state-owned firms and the opportunities and threats they could face.

Speaking at a workshop on the competitiveness of state-owned companies in global trade, Marzuki said such an assessment is the essential first step toward mapping out their business strategies.

In comparison to developed countries, Indonesia does not seem to be as serious about facing trade globalization, Marzuki, the former chairman of the Capital Market Supervisory Agency (Bapepam), said.

"Japan has been far ahead. For example, it has earmarked a large amount of funds for preparing its small- and medium-scale companies to face the free market era," he said.

"If we are late, how can we compete with other countries, moreover with developed countries such as Japan," he told the panel discussion chaired by Bambang Subianto, the Director General of Financial Institutions of the Ministry of Finance.

He said that each state-owned company should carry out a separate strength, weakness, opportunity and threat analysis forum to enable them to take an effective approach to improving their competitiveness.

The two-day workshop, officially opened by Director General for State Enterprises Martiono Hadianto on Thursday, was participated in by executives of state-owned companies operating in the financial and manufacturing sectors.

At the same workshop, Hasan Kartadjoemena, the government's former representative for the General Agreement on Tariffs and Trade (GATT), explained free trade arrangements under the principles of GATT and the ASEAN Free Trade Area (AFTA).

State-owned companies, which registered total assets of Rp 358 trillion (US$160 billion) as of last year, are often criticized for their poor performances.

The Commission for Trade and Finance of the House of Representatives recently questioned their low profitability.

Profits of state-owned companies, which reached a total of Rp 8 trillion in 1994-1995, were low in comparison to their assets, members of the commission said.

Hasan said yesterday that state-owned companies had no choice but to make concrete and applicable business plans to enable them to survive in the free market era.

He said that state-owned companies would have to be competitive not only overseas but also at home in the next 15 years when most tariff barriers will be totally abolished.

Establishing business alliances with other state-owned firms or with overseas companies is also important in enabling them to compete in the free trade era, he said.

Marzuki acknowledged that state-owned companies, which have a double function as profit-oriented entities and agents of development, will find it more difficult than private companies to improve their competitiveness.

He said that their role as agents of development should not become an excuse for operating unprofessionally. (hen)