Devi Asmarani, Jakarta – Indonesia's state-owned companies are being torn apart by internal rifts as employees fight against government attempts at privatisation.
In what could further undermine the country's investment climate, employees of several state-owned companies (SoE) have held strikes and demonstrations over the last few months to block the government's plan to sell its shares in the firms to foreign investors.
Tens of thousands of SoE employees, represented by various labour unions, have voiced nationalist sentiments and got strong backing from politicians and local community leaders.
Last week, telecommunications and postal workers threatened to go on a nationwide strike over plans to privatise international call operator PT Indosat, the biggest fish on the government's privatisation list for this year. Workers would cut off telephone services and stop delivering the mail if the government pressed on with the privatisation plan, the union said.
Earlier this year, the government delayed its plan to sell a 51-per-cent stake in state-run cement maker PT Semen Gresik to Mexico's Cemex SA de CV after the former's employees, with the supports of legislators, boycotted the plan, calling it a return to colonial rule.
The chairman of the Federation of State-Owned Companies Workers, Mr Bambang Syukur, said SoE employees feared they would lose their jobs. "People worked for the SoEs because they thought it would be safer to work for the government than in the private sector," he said. "But with foreign investors taking over, this sense of security is disrupted while the government has not at all appeased our concerns."
The long-delayed sale of leading retail bank Bank Central Asia to Farallon Capital last month was also marred by several protests and strikes.
Jakarta aims to raise some 6.5 trillion rupiah (S$1.3 billion) from the sale of 24 state companies this year to plug the gapping budget deficit from financing the bank-restructuring programme. It also expects to improve the performance of state companies, long infested with corruption and inefficiency, as part of the economic reform targets required for foreign aid.
But last year, it only managed to make 3.5 trillion rupiah from the sale of domestic phone operator PT Telkom, well below the target of 5 trillion rupiah. With the growing opposition of labour unions, many are sceptical that Jakarta can meet this year's target.
Economist Pande Radja Silalahi said: "The workers' unions have not offered any solutions, and the impact of their movement is very negative to the privatisation programme." He added that state companies have long been known as cash cows for political parties and high-ranking officials in the Indonesian armed forces. In addition, the strong political backing the unions get from major parties like Golkar show that groups with strong vested interests are reluctant to let go of their control on the companies.
Economist Sri Adiningsih noted: "The stakes in the state companies being privatised are too high for them. And they have the power and ability to mobilise the workers and the community to oppose the programmes." Mr Pande and labour leader Bambang said many of the workers and unions had also been "manipulated" by managers, who feared they would lose their positions under new shareholders.
State companies in trouble
Semen Gresik: Jakarta's plan to sell 51 per cent of its shares in the company to Mexico's Cemex has been delayed after the plan set off protests from employees, legislators and local community leaders who called the move neo-colonialistic.
PT Indosat: The 100,000 members of the Union of Post and Telecommunication Firms Workers threatened a massive strike to cut off telephone and mail services if the government did not cancel its plan to privatise the company.
The Indonesian Railway Company: Over the last month, employees have been expressing their opposition to newly appointed chief Omar Berto, and have threatened to go on strike. Analysts are worried it will affect the firm's service.
Telkom: Thousands of the telecommunication company's employees from Yogyakarta and Central Java rallied and held a strike against a planned deal to end Telkom's decades-long monopoly over the country's fixed-line phone service.