"Indonesia's State Enterprises: From State Leadership to International Consensus"
Date: Tuesday, April 22, 2003 13:00 - 15:00
Venue: Room E207, 2nd Floor, East Wing, The Center for Southeast
Asian Studies (CSEAS), Kyoto University
By Dr. Yasmin Sungkar, CSEAS Visiting Fellow
The survival of state-owned enterprises and continued investment by the state were assisted by high rates of economic growth in Indonesia throughout the 1980s. But the 1997 currency crisis in the region had destroyed the expectation that rapid growth would continue. It appears that the crisis has reintroduced momentum for reform in the huge state-enterprise sector. In response to IMF pressure and its own fiscal difficulties, the government took several measures to reform the state sector. The economic crisis provided a catalyst because it forced the government to assess more seriously the value of state companies. With Indonesia in its fifth year of crisis, there is an urgent need to sell state-owned assets to relieve the state budget. The special seminar examines the impact of the crisis on these state enterprises, including the debate over privatization and the emergence of strong resistance against reform. It appears that the crisis has strengthened the hand of reformers seeking to privatize the state sector. However, despite the logic of government efforts to reform inefficient state companies, there has been a battle with every step towards privatization.