Robert Go, Jakarta – The hard-fought battle over the proposed sale of Indonesia's largest retail bank appears indicative of the concessions the Megawati Sukarnoputri government will have to continually make to win over supposedly friendly legislators.
Having used the nationalistic card to stymie the government's plans for a quick sale of PT Bank Central Asia (BCA), legislators appear set to play the populist card next week when her budget comes to the House for approval.
Flushed from the victory of getting approval for the BCA sale, legislators now talk of forcing a postponement of the unpopular, but essential, fuel price hikes next year.
On Wednesday night, several legislators argued till the last moment against government plans to sell a 51 per cent stake in BCA, warning that one of the country's healthiest banks should not be controlled by foreign investors.
Ms Megawati's Indonesian Democratic Party of Struggle (PDI-P) is the strongest in Parliament and leads the Finance Commission, but State-owned Enterprises Minister Laksamana Sukardi still needed more than three weeks of tough debate sessions to push through his BCA plans.
During the past year, Parliament had foiled several attempts by former president Abdurrahman Wahid's government to sell BCA and other "national assets", but had been expected to be more cooperative with the new government given the pre-impeachment pledges made by party leaders.
PDI-P legislator Aberson Marle Sihaloho described the continuing uphill fight thus: "Getting others to agree that we need to work with foreign investors was a tough process. Many needed days of talking to before finally agreeing that we need to sell BCA to any highest bidder." Finance Commission chairman Benny Pasaribu agreed: "It gives a good idea of the decision-making process that we have to deal with in future."
When the decision was finally handed down, it became clear what kinds of concessions Mr Laksamana and his PDI-P colleagues had to live with. With the country desperate to raise cash through asset sales, his proposal would see one bidder paying a premium price – around 5.2 trillion rupiah – for control of BCA.
Parliament has given the green light to the sale, but suggested that the offered stake be divided into two parcels of 30 per cent and 21 per cent. That way, argued one opposition legislator, it is possible that two different bidders would end up splitting control of BCA.
Ironically, legislators have no legal basis to veto the government's asset-sale plans. They told The Straits Times they might be overstepping the boundaries of their powers, but gave the justification that as representatives of the people, they had the right to accept or reject sales involving people's assets.