Robert Go, Jakarta – Indonesia will sell assets cheaply, if necessary, to meet state-budget targets and to conform to the prescriptions of the International Monetary Fund (IMF), said the country's new minister of state-owned enterprises.
A day after assuming control over an estimated 70 per cent of the government's assets, Mr Laksamana Sukardi told The Straits Times: "Our first priority is to meet asset-sale targets that have been agreed to with the IMF. We have to support the budget, so we may have to take any pricing for assets to be offered before the end of the year."He added that the rupiah's drastic improvement over the last month and the generally optimistic mood that has marked President Megawati Sukarnoputri's first days in office could add up to higher prices for the government.
He declined to name companies that could be unloaded by the restructuring agency Ibra or his ministry in the next few months, but had earlier indicated that the state's lucrative telecommunications companies could be at the top of the list.
Mr Laksamana took charge of the state-owned enterprises (SOEs) with a total book valuation of more than 850 trillion rupiah (S$187 billion) last Thursday, and became Indonesia's assets czar on Monday after Ms Megawati handed him control of Ibra and its nearly 600 trillion rupiah in nationalised assets.
The state budget targeted to raise 6.5 trillion rupiah from the sale of 16 SOEs and 27 trillion rupiah from the sale of Ibra assets. But, by the end of July, no government-owned company had been sold. Ibra has managed to net only 12 trillion rupiah.
A key part of the problem has been Indonesia's nationalistic Parliament, which has scuttled or slowed down asset-sale plans due to concerns that prices were too low. SOEs also remain inefficient and relatively corrupt cash cows for some of the state-appointed officials who run them.
Despite some concerns over so much state assets coming under the control of one man, observers largely applauded Ms Megawati's decision to give Mr Laksamana, a respected former banker and corruption fighter, carte blanche on privatisation and Ibra. Mr Raden Pardede of Danareksa Research Institute said: "Privatisation and Ibra are closely related to the question of how to attract investors to Indonesia. It is not an easy task, but Mr Laksamana should be able to make progress."