Union marches to protest planned Indosat sale

Union marches to protest planned Indosat sale

Dadan Wijaksana, The Jakarta Post, Jakarta

Around 700 ISP Postel union members from various state-owned post
and telecommunications companies staged a rally on Thursday to
protest against government plans to sell a majority stake in
international telecommunications operator PT Indosat to foreign
investors.

The demonstrators also called for the dismissal of State
Minister of State Owned Enterprises Laksamana Sukardi, who is in
charge of the government privatization program and the
restructuring of inefficient and loss-making state-owned
enterprises (SOEs).

Laksamana, whose reforms have led to the firing of some top-
ranking SOE executives, is also reportedly planning to replace
powerful Indonesian Bank Restructuring Agency (IBRA) chairman I
Putu Gede Ary Suta.

The protesters marched from the National Monument to
Laksamana's office but failed to meet him.

ISP Postel head Abu Syukur Nasution said that the 100,000-
member union would seek the support of legislators to block the
planned sale of Indosat, which he described as one of the
country's most valuable assets which must not be sold to
foreigners.

"We need to convince the parliament that the divestment is not
suitable under the current strained business climate," he said.

At a previous press conference, Abu Syukur said that around
10,000 union members would show up for Thursday's rally. There
was no explanation for the low turn out.

Laksamana said earlier this week that he would press ahead
with the privatization program, including the sale of its Indosat
shares despite the union protest.

He admitted the protest could slow the sale but said it would
not be significant.

Analysts have said the privatization program is needed to
raise cash to help finance the state budget deficit -- projected
at 2.5 percent of gross domestic product (GDP) this year -- and
to help revive the confidence of international lenders and
foreign investors in the country.

Laksamana has said that privatization was also one way to
boost good corporate governance in SOEs long treated as cash cows
by corrupt bureaucrats and politicians.

Some 24 SOEs had been listed for privatization this year in a
bid to raise some Rp 6.5 trillion.

The government, which owns a majority 65 percent stake in
Indosat, plans to sell a 15 percent stake on the stock market in
June this year, and another 30 percent stake in October to a
strategic investor. The sale program is expected to raise about
Rp 5 trillion.

There has been concern from various parties that growing
protests from labor unions would seriously hinder government
efforts to speed up the "crucial" privatization program.

Last year, the government failed to complete plans to sell a
majority stake in cement maker PT Semen Gresik to Mexico's Cemex
SA de CV due to opposition from various quarters, including the
company's union.

Labor experts have urged the government to intensify public-
awareness campaigns on the policy to gain more support from the
people and workers of the SOEs.