Robert Go, Jakarta – Employees of Bank Central Asia (BCA) staged protests nationwide against its impending sale to foreign bidders, signaling that whoever takes over could face a hostile reception from the staff.

The strike, involving as many as 4,000 employees, or almost one-fifth of its 21,000 workforce, was a further illustration of the difficulties faced by President Megawati Sukarnoputri's government as it tries to implement crucial economic reforms.

For the two bidding consortia, led by Standard Chartered Bank and US investment firm Farallon Capital respectively, it raises the problem of how to deal with a hostile workforce.

Workers appeared to be concerned mainly with how the deal would affect job security, salaries and benefits. Strikers' representative Bilal Idris said: "The sale will hurt both Indonesia and BCA's workers. The government has to take us seriously."

Branches throughout Jakarta, the East Java provincial capital of Surabaya, and Medan in north Sumatra remained closed yesterday.

Domestic opposition to selling BCA, the country's largest retail bank, had been subdued so far. But this could now pick up after the government indicated that it would announce a new owner as early as this week.

Jakarta is intent on inking a deal. Vice-President Hamzah Haz told reporters yesterday: "The sale won't be cancelled, as it is already promised in the letter of intent to the International Monetary Fund."

The BCA sale, first slated for December 2000, is a make-or-break test for the government. The US$450 million that Jakarta is expected to raise is sorely needed to finance the budget deficit and keep the country afloat.

But more than that, it is a chance for Jakarta to show foreign investors and creditors it can deliver reform pledges. Similar protests and nationalistic arguments from various parties have sabotaged or delayed other deals involving foreign investors in the past, costing the state dearly in potential revenue.

Failure to unload BCA, which restructuring-agency Ibra took over three years ago from the Salim Group, resulted in Indonesia being temporarily suspended from the IMF's US$5-billion loan programme during the term of former president Abdurrahman Wahid.

University of Indonesia economist Bambang Brodjonegoro said the BCA sale must serve as a signal that Jakarta remains committed to the privatisation process. But it must also ensure that future sales go through smoothly, without protest. Otherwise it would send a negative signal to potential investors.