Markus Junianto Sihaloho – The government's plan to place the management of the military's cooperatives and foundations under the Ministry of Defense was criticized on Tuesday for not getting to the root of the problem.

Jaleswari Pramodhawardani, a military analyst from the Indonesian Institute of Sciences (LIPI), said that because most of the middle- and high-ranking officials at the ministry were also active members of the military, "a conflict of interest would persist."

A presidential decree expected before the end of the year plans to transfer all military businesses to the Ministry of Finance or the State Ministry for State-Owned Enterprises, but will allow the military to retain small, nonprofit cooperatives and foundations under the supervision of the Defense Ministry.

Jaleswari, however, said the government proposal would be "a backward step," because the ministry's personnel were not business-oriented and would therefore need significant outside assistance to run the assets, which were last year found to be worth a total of Rp 3.4 trillion ($360 million).

Instead, she suggested that the state-owned asset management company, PT Perusahaan Pengelolaan Aset, be entrusted with overhauling the 1,098 cooperatives and 23 foundations operated by the Armed Forces.

Separately, Batara Ibnu Reza, a senior researcher from Imparsial, a nongovernmental organization focusing on military issues, said that the Defense Ministry takeover could clash with its commitment to becoming more accountable and transparent.

He also said that taking over the management of the cooperatives and foundations could become a potential financial burden for the government, with the operational costs of the cooperatives and foundations being absorbed by the ministry's budget.

"The debts of the cooperatives and foundations are the responsibility of the institutions managing them," Batara said. "So it must first be stressed that it will not be the government that is responsible for paying back any debts."