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.