Tulisan sim kuring di The Jakarta Post poe Senen kamari. Intina, ngeunaan 
korupsi.
   
  Politics behind disputes at state companies 
  Opinion and Editorial - February 12, 2007        Tata Mustasya, Jakarta
   
  The ongoing disputes among top-level managements in the two giant state-owned 
enterprises -- PT Telekomunikasi Indonesia (Telkom) and PT Jaminan Sosial 
Tenaga Kerja (Jamsostek) -- should not be seen merely as management problems. 
Instead, these show the mounted attempt by Indonesia's main political groups to 
seek economic rents by exploiting state-owned enterprises. In reality, this 
kind of "competition" also often takes place at most other state companies, 
even those that constantly lose money.
   
  Both the CEO of Telkom, Arwin Rasjid, and the CEO of Jamsostek, Iwan 
Pontjowinoto, have been accused by their respective boards of commissioners of 
having failed to manage the companies properly. However, that issue is likely 
only a cover. The real issue is the CEOs have failed to accommodate the 
interests of some influential political groups, which have asked for special 
favors.      For politicians, Telkom and Jamsostek are too big and too 
cash-rich to be ignored. Telkom is the biggest telecommunications firm in 
Indonesia. Meanwhile, Jamsostek -- which manages the labor insurance and 
savings scheme -- raised over Rp 35 trillion in new funds in 2005 alone.      
This ongoing phenomena really matters to Indonesia's economic and political 
climate. It maintains an unhealthy culture and rampant corruption in political 
life. No wonder, based on the most recent survey on the corruption perception 
index (CPI), the House of Representatives, bastion of politicians, has been seen
 as one of the most corrupt public institutions in Indonesia.      The root 
problem is that political parties have never been able to build a permanent 
source of adequate funds to finance their operations. In mature democratic 
countries, citizens who support programs offered by any political party would 
not only vote for the party in elections but also would provide financial 
support. It means there are "legal exchanges" between favorable programs from 
political parties and donations from constituents.      However, in Indonesia, 
most people are not willing yet to financially contribute to political parties. 
Compulsory dues by members of political parties are considered odd. As a 
consequence, political parties seek alternative sources of funding, which in 
many cases are questionable and are sometimes illegal.      One of the 
financing sources often tapped by political parties or politicians is rents 
from state-owned enterprises. This opportunity has been created by the fact
 that politicians often have strong bargaining power vis a vis the top-level 
management of those enterprises by, at least, using two ways.      First, they 
could strongly influence the selection process of commissioners and top 
executives. They propose and struggle for certain candidates and, in turn, 
these candidates promise donations after they get the positions. As political 
parties also already have power over appointments to the Cabinet, intervening 
in the selection of the management and supervisory boards of state companies is 
much easier.      Second, House members could engage in the "monitoring and 
evaluation" of incumbent commissioners and top executives. If the management 
"satisfies" the political parties, they will survive and vice versa. The 
management, therefore, should always maintain good rapport with major political 
parties and this process certainly involves financial donations.      Most of 
the top management at state companies have no power to resist the
 pressures from political parties or political leaders. This has even been 
experienced by State Minister for State Enterprises Sugiharto.      A few 
months ago, some political parties urged President Susilo Bambang Yudhoyono to 
replace Sugiharto for some unobvious reasons. But this demand eventually 
disappeared and Sugiharto survived. This might be related to a win-win deal 
among the vested interest groups.      As the political cost in Indonesia have 
been rising steadily state enterprises have been seen as potential cash cows by 
most political parties. Direct elections -- both general elections and regional 
elections -- require huge amounts of funds.      Coming up to the 2009 general 
election, the years 2007 and 2008 could be the climax of political parties' 
campaign to raise as funds from state-owned enterprises. As a consequence, 
similar conflicts like those in Telkom and Jamsostek could hit other state 
companies as more parties compete to raise funds.      State
 company managements certainly find it quite difficult to implement good 
corporate governance and at the same time satisfy political parties' hunger for 
funds, especially as the number of parties is quite big now and looks set to 
increase.      Even managements that get full support from a political party 
could not rest assured of their positions because other parties might still 
jump in for a share and make a lot of noises to have their demand fulfilled. 
This is likely what Arwin Rasjid of Telkom and Iwan Pontjowinoto of Jamsostek 
are facing.      Privatization -- which will abolish the opportunities for 
political parties to seek rents -- is the simplest solution. However, this is 
not feasible yet as most of those enterprises have core operations in strategic 
and vital industries like electricity, oil and gas, transportation and 
telecommunications.      The government has an obligation to control these 
economic sectors to maintain reliable public service obligation (PSO)
 for financially disadvantaged citizens.      Anyway, House members also have 
always been known to be the strong opponents of privatization as they are 
afraid of losing cash cows.      Hopefully, civil society groups or 
organizations can be the vanguard in exposing subtefurges by political parties 
to collect rents from state companies and inform the general public of the 
quality of the financial accountability of political parties.   The writer is 
an analyst with The Indonesian Institute, Center for Public Policy Research. He 
can be reached at [EMAIL PROTECTED] 

 
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