Zaki Mubarak
Sekretaris Pimpinan Daerah Pemuda Muhammadiyah Jakarta Selatan
Backgrounds
In 1945, Indonesia proclaimed its independence. It was not an ultimate struggle; but rather a new chapter of long series to realize what society dreams; independence from any colonialism, peace, fairness, better life and welfare. As a new country, bundles of problems are waiting to be solved, from sovereignty to social and economic crises. One of the important problems in the integrity areas is West Papua’s claim. Besides that, colonialist companies still have deep influenced in national economic activities.
Those problems are closely related because they are covered in agreements in Round Table Conference. Indonesia wants to solve West Papua problem using diplomacy. One of the clauses was government of Indonesia must respect the legality of foreign companies existence, especially Dutch companies.
As time goes by, negotiation became worst, so did the relationship between Indonesia and Netherland. In November 1957, President Soekarno announced West Papua integration to Indonesia, because United Nation failed to make resolution to appeal Dutch to make negotiation with Indonesia for the problem (Moeljono, 2004: 3). On December 1st 1957, government of Indonesia officially announced 24 hours strike against Dutch companies in Indonesia. This action was the beginning of a massive nationalization of Dutch companies (Kanumoyoso, 2001: 31).
In order to develop national economic, government started to establish some companies to overcome Dutch companies domination as well as taking over Dutch companies which have related to public utilities. Its process was also an implementation of political sovereignty that has already been reached (Kanumoyoso, 2001: 45). State-Owned Enterprises (SOEs) taken over came from UK, Malaysia and Singapore companies (Diah, 2003: 10). According to Oey Beng To, besides taking over, anti Dutch was also implemented by Dutch citizen eviction. In early December, Minister of Justice announced that 50.000 Dutch citizens would be evicted or returned in three steps (Kanumoyoso, 2001: 65).
Up to now, there have been two perspectives in evaluating background and process of Dutch companies taking over. First, an opinion according to Audrey R. Kahim and George McT. Kahim, which states that taking over phenomenon of Dutch companies is a case which is unplanned before. This perspective followed with no government regular programs in the actions. Second, is according to Paul F. Gardner, starting that government was behind the action. A scenario was arranged, where angry people were taken away by force whereas the facilities later on placed under the government in protection. Quoted from Louis Fischer, this perspective was strengthened by President Soekarno stating, that those take over were initiated by people themselves (Kanumoyoso, 2001: 68-69). The strongest support to take over came from labour class. Moreover, there has appraisal that actions not to distinct as nationalization action because it showed vague attitude from government (Kanumoyoso, 2001: 80).
According to Bisuk Siahaan, those companies, then, were grouped according to the mission. The companies that deem important for public was taken over by central government (Kanumoyoso, 2001: 94). With the new companies, state began to take more parts to determine the way of economic life. But the action did not guaranty to fix the economic directly, because the challenge was quite big. Nation Planning Bureau reports about five years development realization showed national income decreased up to 12,9% in 1958 (Kanumoyoso, 2001: 99-100).
Basically, SOEs were established as implementation of The Constitution of 1945 article 33 about national economic system. The certainty in The Constitution article 33 about national economic system was reflection of nationalism and curiosity of the nation based on spirit and original culture of the nation (Diah, 2003: 60). The Constitution of 1945 state that national economic actors consist of three business forms; private, SOEs and cooperative (Moeljono, 2004: 1). The aim was to make social welfare based on national economic systems that run with spirit of family atmosphere without individual monopoly except state monopoly of public utilities.
The man behind the scene of that article was Mohammad Hatta. According to Ruslan Abdulgani, as Indonesia independence proclaimer with Bung Karno, Mohammad Hatta formulated The Constitution 45… Especially article 33 was his thought and formulation… (Diah, 2003: 77). The characteristic of Indonesia economic system that has the quality of socialism was stated in his speech in Bukit Tinggi in 1932 (Diah, 2003: 78).
In 1969, at Soeharto’s regime, the government issued Decree number 9 which groups the SOEs into three forms:
a. State Corporation (PERJAN) is SOEs which operate in public services supply. The capitalization includes in National Budget and managed by related Department and also the status has correlation to public law Indonesische Bedrijven Wet (IBW) and Indonesische Compabliteits Wet (ICW).
b. Public Corporation (PERUM) is SOEs which operate in services supply to public utilities and also to gain profit. All capitalization from state rich came from the state’s wealth that is separated and also legal body status of the firm and arranged based on Decree.
c. Limited Liability Company (PERSERO) is profit oriented SOEs, operated in many fields propelled grow of private sectors or cooperative, outside of State Corporation (PERJAN and Public Corporation (PERUM) fields. All capital or some from state rich came from the state’s wealth that is separated and divided from shares and also civil legal status of the firm which is Limited Liability Company (PERSERO) formed (Diah, 2003: 184-185).
In 2003, government issued Decree number 19 which groups the SOEs into two forms; Public Corporation (PERUM) and Limited Liability Company (PERSERO). According to Cristianto Wibisono, basically, the growth of SOEs is divided into four periods:
a. Before Independence
In this period, SOEs are managed by IBW and ICW regulations. This period has 20 SOEs submitting to IBW that operate in many economic fields including electricity, coal, lead, harbor, pawnshop, salt, plantation, limited liability company, railway and topography.
b. 1945-1960
Besides SOEs above, in this period there were some SOEs that include State Bank Industry, Sera, Vaksin, PT. Natour Ltd. Considering the important of SOEs existence in development and West Papua liberation from Dutch colonialism, based on Government Regulation number 23 year 1958 was nationalization action to ex Dutch private companies in Indonesia. Companies that nationalized were operated in almost state economic sectors including banking, plantation, trade and service.
c. 1960-1969
As result of nationalization, in 1960-1969 all SOEs totally 822 companies. That total was rearranged, until 1989 the decrease became around 200 companies.
d. 1969 until present
After 1969, SOEs have the role to support National Development more and to increase the development activity since five years development (PELITA) I… (Diah, 2003: 186-187).
Phases were through by SOEs in order to adapt the world dynamics. The government has made some policies to make ideal SOEs form to make them involve and give significant contribution in development process that spur with world changes.
The changes in the world have been influenced by human being activities. The growth of technology makes everything easy now: transportation, communication, economic transaction, etc. The effect is that the world become borderless and economic activities more aggressive. Some classic economic theories have transformed to new methods in order to adapt to globalization era. Battles of two mainstream ideologies, socialism and capitalism, have done along with collapse of Soviet Union. The collapse of Soviet Union and almost all socialist countries was a sign that the capitalism was single choice for world economic system, such statement is accordance with Francis Fukuyama premise in 1992 (Moeljono, 2004: 52).
The globalization of the economy propelled government all over the world to resort to structural adjustments at the political level. Various measures toward liberalization, deregulation and privatization aim at facilitating the shrinkage of the state on the other hand, and empowering of citizens on the other. The purpose of these reforms is to shift the focus from a bureaucratic model of public management to a market model (Gupta, 2000: 2).
Privatization can be defined broadly as relying more on the private institutions of society and lees on government to satisfy people’s needs. It is the act of reducing the role of government or increasing the role of the other institutions of society in producing goods and services and in owning property (Savas, 2000: 3). The intellectual for privatization was laid by Milton Freidman. Privatization was first suggested in 1969 (and the word, in the form reprivatize, was first used) by the Austrian-born American management professor Peter F. Drucker (Savas, 2000: 15).
The elections of Margaret Thatcher as prime minister of Britain and Ronald Reagan as president of the United States, in 1979 and 1980 respectively, gave high visibility and a pronounced ideological impetus to what became the privatization movement (Savas, 2000: 15). In the 1980s many industrialized Western nations, stimulated by the British example, embarked on privatization programs and so did many developing nations, the latter pushed in part by Western donor nations and by international agencies that had grown impatient with the poor performance of state-owned enterprises that they had previously financed (Savas, 2000: 16). The same very instructions are now keeping on developing countries to privatize their public sector enterprises before applying for loans (Gupta, 2000: 4-5). In this case, Indonesia is one of developing countries which bagging and did what the instruction to get some loans from International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB), etc.
In 1996, Indonesia government debt reached US$ 55,3 billion, increase by 75,5% from government debt in 1986 (US$ 31,5 billion). President Soeharto was driven some ideas to pay it. One of his ideas was make good use of SOEs. He said that Indonesia shouldn’t worry with the international debts because SOEs values were bigger than government debts (Moeljono, 2004: 8).
Privatization is one familiar word in the last two decades in SOEs management in many countries including Indonesia. Because of those reason above, privatization policy invited many polemic and resistant in the society. In fact, government already did it in many strategic SOEs and still arrange to the other. Under President Megawati Soekarnoputri government was issued Decree number 19 years 2003 about SOEs… It was first Decree in Indonesia which gave explicit basic law to privatization implementation (Rais, 2008: 188). Like possessed by an evil spirit, signs of SOEs privatization in 2008 are more real. SOEs privatization committee already made list of 44 SOEs are going to sale… (Rais, 2008: 226). It does not make sense, how could the government take the policy?
Based on the illustration, privatization is a policy which betrays the aim and spirit of The Constitution article 33. Next questions are; why did government did it and still does it? What are the objectives behind the policy?
A Bundle of Problems
Our history showed how our founding fathers were very concerned to realize the purpose of the state, fair and wealth society, through their thought and heroic actions. By SOEs establishment, every strategic source of public utilities must be managed under state management and use it for the society prosperity. Besides that, the aim is to avoid monopoly by private or foreign company that lead the make society suffer because the orientation is profit to enrich individual or group.
The world dynamic and the reality have been weakening the purposes. SOEs management was not capable at bringing and giving the best service to society and gaining profit for state treasury. In fact, many SOEs become the state’s burden with the subsidies and debts because of the failure of the management. More than three decades from national independence in the growing world, enterprises which owned by state already was made confused of subsidy cost, burden for the government. SOEs that made loan to international market substantially increasing whole national debts (Wahyuni, …: 6). There are some factors which caused it, such as management failure, intervention and corruption.
From the beginning, there have been a lot of management problems from recruitment mechanism, red tape, accountability, corporate culture, etc. In management, human resource is key factor in order to improve the companies. Quality and quantity influence the achievement of vision and mission. What if it is weak? Surely, vision and mission of the enterprise never been reached. Ironically, many of new employees accept to work in SOEs without proper mechanism. They become employee by recommendation from their relatives or the senior official government that already work there. They joined without test even though it has just formality. So the enterprises had no idea of their own employees capability.
Red tape was one of many management problems that gave bad influence to SOEs. Because of it, there have a lot of inefficient and ineffective work that made low performance. Bureaucracy chain also made any policy hard to implement because it must go through many mechanism. That’s why SOEs are often late to take decision to adapt to the environmental changes and to compete in tight competition. Besides that, innovation could not grow because the mechanism inhibits it. With that performance, it is impossible for SOEs to gain amount of profit.
To make SOEs compete and grow to be multinational enterprises, one of the key is accountability. It is obligatory in globalization era to reach people’s trust. In the past, even nowadays, people haven’t had access about information the SOEs profit or loss. They just knew that SOEs always get subsidy from state for operational budget or they have loan to international organization. It also prevents from and avoids SOEs from corruption.
Besides vision and mission, a good enterprise, in this case SOEs, must have corporate or enterprise culture and some SOEs already have it like BRI, Telkom, etc. Based on it, whole activities in the enterprise must relate to it. According to Lawrence E. Harrison and Samuel P. Huntington, culture determine progress of every society, state, and nation in the world, either consider from politic, social or economic, without exception (Moeljono, 2004: 78). Generally, corporate culture is philosophy question, functioning as pursuit which fasten the employees because formally it is formulated in every company regulation and stipulation (Moeljono, 2004: 80).
Corporate culture is one of the important factors for a company, in this case SOEs, to reach productive performance (Diah, 2000: 173). Long bureaucracy chain and feudalism are still formal structure in SOEs environment (Diah, 2000: 174). That’s why SOEs are hard to get maximum performance. That culture grows in the former regime and is integrated in SOEs employee and management paradigm and attitude then become characteristic. The core of corporate culture is a guidance to act in order to reach vision and support the mission.
Moving from some SOEs management problems, next problem are intervention and corruption. It comes from the regime which manages the state. Those tends to break the rules, for individual or group interest and later on weaken SOEs. With the power that they have, government and political party where they come from, misuse it and make SOEs as their cash cows. Automatically, the authority of SOEs management was hijacked by them and made SOEs weak day by day. The worst was in the privation policy. They involved and used their power to gain profit.
For instance, an analysis of privatization programs and policies in ASEAN (Thailand, Philippines, Indonesia, Malaysia, and Singapore) reveals the role played by the government in changing the pattern of the ownership in these societies. In these countries more and more politicians got into the business of privatization, and business terminology began to permeate the political horizon. Privatization became a means toward personal enrichment. For instance, we find an alliance between the political leaders and conglomerates in Indonesia – the former supplying licenses, import monopolies and contracts to the letter (Gupta, 2000: 7).
According to the GOPAC Handbook on Controlling Corruption, corruption is seen as the abuse of public position for private, individual or group to whom one owes allegiance. It occurs when public official accepts, solicits, or extorts payments, or when private agents offer a payment to circumvent the law for competitive or personal advantage (Rais, 2008: 178). …corruption type which super destructive and state scale is state-captured corruption. It runs by state, the state pawning to foreign corporate power by the government that in charge (Rais, 2008: 180).
Foreign enterprise was intervened made of any blueprint script of Decree, Governmental Regulation, Presidential Regulation, etc. That is the most sophisticated way and does not seem vulgar because they are rarely detected by public or mass media… Once again, this is what called state-captured corruption (Rais, 2008: 214). Revrisond Baswir said “That the majority of our Decrees are created by them. For instance Decree of Oil and Natural Gas, there clearly shows the role of World Bank, Decree of SOEs in which Price Waterhouse Cooper plays part, Decree of Electricity – here again we can be find Asian Development Bank’s part. Here, they also play part (Rais, 2008: 214). Ironically, SOEs was interventions by government and the government was interventions by international power, either organizations or corporations.
Basically, privatization policy was IMF, World Bank and WTO recommendation that known as Washington Consensus. According to John Williamson, he formulated the similarity of that view into ten steps of economic improvement to countries which have crisis and then those steps or the recommendation known as Washington Consensus. Ten economic recommendations which popular as Washington Consensus (Rais, 2008: 15):
1. free trade
2. stock market liberalization
3. flow exchange rate
4. interest nominal determined by market
5. market deregulation
6. transfer asset from public sector to private sector
7. tight focus in public expenditure in many social development target
8. balanced budget
9. tax reformation
10. protection of proprietary rights and creation rights
Now we know why government did privatization program and still does that. What about the objectives behind the policy?
If the privatization program was conducted in a right and proper way, it could make significant change to better off SOEs management. But the fact is very terrible. Privatization become the way to reach individual or group interest, enrichment, international acknowledgement in international relation, prove the loyalty to international economic mainstream or the worst it is just as a servant of global economic and politic power.
Fuad Bawazier shows our less of intelligence, which is: foreignization process impression as globalization and modernization achievement (Rais, 2008: 160). Government realizes that as a developing country, especially as a country that has a lot of debts to international donor, Indonesia must ponder and obey the rule and requirement to get another loan.
How could it happen? It means the government runs and strengthens that policy which already has betrayed society mandate and The Constitution 1945. The result is that government sells the state gradually from SOEs to foreign company. Tragically, the target of the privatization is strategic and prospective SOEs that manage public utilities and state needs. That has an opportunity to harm the society life and sovereignty of the state.
Paradigm and Work Frame Change
The establishment of SOEs has been through a long process until now. Our founding fathers took over colonialist companies and changed them to SOEs to avoid monopoly and domination of foreign companies in public utilities. So they are managed only by the state. SOEs also established to gain profit to treasury state. Those aims also support The Constitution of 1945 especially article 33. With all instruments, state must fulfill society needs of goods and services. Above of all, SOEs established as instrument to realize welfare society and state and also to avoid capitalism effect.
As time goes by, the aim of SOEs become blurred because of many factors: like management failure, intervention and corruption. Every regime couldn’t develop SOEs to professional enterprise but use it as their money machine. The result is SOEs management become worst and state burden. Tragically, President Soeharto said that SOEs can be used to pay state debts.
After economic crisis, Indonesia wound of debts to international donor. The donor (IMF, World Bank, WTO, known as Washington Consensus) have some criteria and requirements to give loan for every country, including Indonesia. One of that is privatization program. Beginning from that, many prospective and strategic SOEs already sold to foreign company in irrational price without limitation of share owning.
Besides the loss the SOEs, state sovereignty was ripped because government has not had the authority to take of a decision and manage the state. All conditions must be appropriate to the donor economic formulation to cure the crises. Besides selling the SOEs, government must stop subsidy for some vital commodities and liquidate Logistic Body (BULOG). After few years, the result was disappointing, social and economic sectors never cure even worst.
Privatization is committing of treason of The Constitution article 33. From the beginning, Decree number 19 year 2003 was made to support liberalization and globalization trade that agreed by international community, including Indonesia, such as agreement of WTO, ASEAN Free Trade Area (AFTA), ASEAN Framework Agreement on Service and Asia Pacific Economic Cooperation (APEC). In Chapter One, Article Two, Point One states that all or at least 51% shares of SOEs in limited liability company (PERSERO) firm is state own. But in point twelve stated that privatization is sells of limited liability company (PERSERO) share, even a part or all to other side in order to increase the performance and the corporate value… also to spread the share ownership to society.
Privatization by salling SOEs share is without limit and irrational prices are not the only solution to cure SOEs illnesses. If we take example from development countries, the society is already wealthy so they can buy the share. But for Indonesian, it is impossible because the society must survive from the crises. That’s why SOEs share bought by foreign company.
Tragically, political elites have different perspective of privatization. They though by sell the majority share of SOEs, the ownership change to foreign company that absolutely has many expert and better management than local company. That is clearly astray thought. The case of Indosat and Telkomsel is factual prove. The government sold it to Tamasek, Singapore’s company, with low price on the other side those company in good performance and very strategic for telecommunication and state defend. They promised that they would bring it to become better company with good management and would local employees take training in Singapore to increase they ability. The fact, Tamasek makes monopoly telecommunication price, the management never changes to become a good management and never sends employees to take training in Singapore.
Government must be wise and not be in hurried to take decision. Like a doctor, government must diagnose the illnesses, find the cause, categorize the illnesses and then give the prescription. After that, the government explains how to use the dose that must be consumed and it also monitors the progress. That action must cure the SOEs illnesses with less cost rather than trust and obey the psychopath doctor from Washington.
It shouldn’t happen if the government implements serious and has professional paradigm to managed SOEs. Radical way to change that condition its a must. As we discussed previously, there are three main SOEs illnesses that already diagnosed: management failure, intervention and corruption. To cure the illnesses SOEs in management failure is change of old management with implement good corporate governance which is include the structure, system, infrastructure, human resources, technology, culture, etc. The government also can hire some expert to help the management to improve performance.
Good corporate governance already proved empirically to improve company performance in many countries. The frame work of good corporate governance is effective, efficient, transparent and professional to reach the goal. So, the management failure could solve it if the government serious, strict and consistent in implement it.
For intervention problem, even from inside or outside the state, the government must take resolute step for it. First of all, the government must have good political will and brave hart to face all intervention form. Exactly, it comes from leadership quality from first man in this country with his related minister and all political elites in Indonesian Legislative Assembly (DPR) which produce the decrees. Besides that, the government and Indonesian Legislative Assembly (DPR) should make strict regulation or decree that clearly arrange the indicators of intervention and the punishment for that action, including foreign side.
In order to restore state credibility and sovereignty, government must be brave and firm to any intervention from foreign sides, even a company, state or donor. By doing so, government has authority to take the best policy in order to develop society and state to become developed and prestigious country.
Corruption is problem that already became a culture. Like intervention problem, this problem must take serious action and good political will from all elements that related with SOEs. To eliminate it, SOEs must have strict regulation to control finance circulation. In order to prove the validity of finance report, it must investigate by Finance Investigation Bureau (BPK). It is prevented action to avoid corruption because the main action to cure this illness is prevention. Besides that, SOEs must make cooperation with Corruption Abolishment Commission (KPK) as super body to investigate and to get the evidence of corruption indication, even in the past.
If all run well, SOEs could reach people’s trust and get the credibility back. The important one, SOEs would grow and can compete in global competition. On top of that, SOEs can give the best goods and services to society and also become the source of the state treasury. When it all becomes reality, our founding fathers spirit would smile and be proud because their struggle will already pay off.
References:
· Asha Gupta, Beyond Privatization, London: Macmillan Press Ltd, 2000.
· Bondan Kanumoyoso, Nasionalisasi Perusahaan Belanda di Indonesia, Jakarta: Pustaka Sinar Harapan, 2001.
· Djokosusanto Moeljono, Reinvensi BUMN, Jakarta: PT. Alex Media Komputindo, 2004.
· Erma Wahyuni, et.al., Kebijakan dan Manajemen Privatisasi BUMN/BUMN, Yogyakarta: YPAPI, …
· E.S. Savas, Privatization and Public-Private Partnerships, New York: Seven Bridges Press, 2000.
· Marwah M. Diah, Restrukturisasi BUMN di Indonesia (Privatisasi atau Korporisasi), Jakarta: Literata Lintas Media, 2003.
· Mohammad Amien Rais, Agenda Mendesak Bangsa Selamatkan Indonesia!, Yogyakarta: PPSK Press, 2008.
Tidak ada komentar:
Posting Komentar