Ary Hermawan, Jakarta – The replacement of Sugiharto as state minister for state enterprises by Sofyan Djalil, who previously served as information and communications minister, in the recent Cabinet shake-up by President Susilo Bambang Yudhoyono has been cheered by some analysts and condemned by others.
"Under Sugiharto's leadership over the last two years, the total revenues of state enterprises rose from Rp 10 trillion in 2004 to Rp 15 trillion in 2006," respected Gadjah Mada University economist Sri Adiningsih was quoted as saying Tuesday by Antara.
She criticized the President for lacking a clear agenda in his latest Cabinet reshuffle, saying Sugiharto's dismissal was "unreasonable". "We don't know whether his successor will do any better," she said.
"He may have succeeded in increasing state revenues from nationalized firms, but he definitely failed to create good governance in the SOEs," argued Fadhil Hasan of the Institute for Development of Economics and Finance (Indef), adding that Sugiharto had "terrible communication skills."
He referred to Sugiharto's inability to prevent the free fall of the price of state-owned gas distribution company, PT Perusahaan Gas Negara's stocks, when slumped by 23.3 percent from Rp 9,650 to Rp 7,400 in January due to its failure to immediately disclose material information concerning a delay in one of its pipeline projects.
The scandal also caused a fall in the prices of other SOE shares on the stock exchange as investors were spooked by fears that other SOEs were also not being transparently managed.
There were rumors that Sugiharto was involved in the case, but he has denied the accusations. "I'm ready to be questioned. But I know that I have never done anything wrong against this country," he was quoted by the Detik.com newsportal when asked if he would be summoned by the authorities to answer the allegations against him.
The BUMN Watch organization and a number of NGOs welcomed the replacement of Sugiharto, saying they were pleased with the President's decision.
"We are thankful as the President has listened to our views. We don't care who replaces him, as long as he is a professional and not driven by particular political interests," said the watchdog's chairman, Naldy Nazar Haroen.
He said Sugiharto was guilty of what he claimed were acts of illegally replacing top officials in some SOEs, including the suspension of the entire board of directors of state-owned coal mining firm PT Bukit Asam.
The manner in which he dealt with a leadership crisis in state-owned social security firm PT Jamsostek also disappointed the firm's labor union.
Fadhil said Sofyan would now need to be able to promote good corporate governance in SOE management. "He should clarify the roles of the ministry as a regulator, cut ineffective bureaucracy and dare to give autonomy to those SOEs that are healthy," Fadhil told The Jakarta Post on Tuesday.
He added that Sofyan would also need to speed up the efforts to restructure debt-ridden state firms that were continuously bleeding red ink. While welcoming Sofyan's suggestion that all SOEs be privatized, Fadhil said that what mattered in the short term was making the SOEs more transparent and efficient.