Febriamy Hutapea – The transfer of military-run businesses to government entities run by civil servants, as mandated by law, is expected to be completed by October, Defense Minister Juwono Sudarsono said.
"All the preparations are finished. God willing, by October it will be done," Juwono said.
In his State of the Nation address to the House of Representatives last Friday, President Susilo Bambang Yudhoyono said he expected the transfer of military businesses to be completed within the year.
"God willing, this year we will finalize the transfer of [military] businesses to the state," he said.
The transfer of the Armed Forces's (TNI) noncore activities is seen as a way of boosting institution's image.
Yudhoyono said he hoped the transfer of military businesses would improve the TNI's professionalism and enable it to focus on protecting the country, "so they can defend every inch of our homeland."
Following the fall of the authoritarian Suharto in May 1998, the military was forced to relinquish its seats in the House and eventually to agree to hand over its lucrative business ventures to the government.
The House passed a law in 2004 requiring the government to take over all military-owned businesses by the end of 2009.
An independent team assigned to verify the military's business interests reported that after auditing 1,098 military cooperatives and 23 foundations, it had found assets totaling Rp 3.4 trillion ($312.8 million).
The team uncovered extensive real estate holdings, including shopping malls, hotels and office buildings.
The move to force the military to sell its businesses was based on concerns that a financially independent military would undermine civilian control, contributing to further abuses of power and impeding reforms.
Yudhoyono said the country's massive democratic reforms had been made possible, in part, by the reform of the TNI, including the separation of its core functions and its other traditional social and political roles.
As the country celebrated its 64th year of independence, the president said he believed that the TNI had accomplished much in implementing the principles of good governance and aggressively eradicating corruption. "In this country, no one is immune from the law," he said.
Juwono said the Defense Ministry was preparing the core concept of the presidential decree that would outline in more detail plans for the transfer of the TNI's business interests. "I hope the presidential decree can be issued before October," he said.