Indonesia's State Enterprises: from State Leadership to International Consensus

Yasmin Sungkar
| Abstract views: 114 | views: 654

Abstract

The survival of state-owned enterprises and continued investment by the state was assisted by high rates of economic growth in Indonesia throughout the 1980s. The currency crisis in the region, which began in mid-1997, destroyed the expectation that rapid growth would continue. In this climate, the loss-making state companies were a serious financial burden, and privatisation has been promoted as a quick solution. It appears that the crisis 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. There was an urgent need to sell state-owned assets to relieve the state budget when economic recovery slowed. This paper examines the efforts to reform the state sector during ten years of Reformasi, including the debate over privatisation and the emergence of strong resistance to reform. It appears that the crisis has strengthened the hand of reformers seeking to privatise the state sector. However, despite the logic of government efforts to reform inefficient state companies, there has been a battle with each step towards privatisation.

Full Text:

PDF

References

Bery, SK. 1990. 'Economic Policy Reforms in Developing Countries: The Rule and Management of Political Factors'. World Development. Vol. 18. No. 8.

Bienen, Henry and Waterbury, John. 1989. 'The Political Economy of Privatization in Developing Countries'. World Development. Vol. 17. No. 5: 617-632.

Christiansen, Robert E. 1989. 'Introduction on Privatization'. World Development. Vol. 17. No. 5: 597-599.

De Walle, Nicolas Van. 1989. 'Privatization in Developing Countries: A Review of the Issues'. World Development. Vol. 17. No. 5: 601-15.

Gupta, Asha. 2000. Beyond Privatization. London: Macmillan Press.

Haggard, S and Kaufman, R. 1988. The Politics of Stabilization and Structural Adjustment. Prepared for the NBER Project on Developing Country Debt. Cambridge, MA: NBER.

Heald, David. 1990. 'The Relevance of Privatization to Developing Countries'. Public Administration and Development: 10.

Paauw, Douglas S. 1967. 'From Colonial to Guided Economy', in Ruth T. McVey (ed.). Indonesia. New Haven: Hraf Press.

Pangestu, Mari and Habir, Ahmad. 1989. 'Trends and prospects in Privatization and Deregulation in Indonesia'. ASEAN Economic Bulletin, March: 224-241.

Ramanadham, VV. 1987. Studies in public Enterprise: From Evaluation to Privatization. London: F Cass.

Reformasi BUMN yang Berorientasi pada Penciptaan Nilai Melalui Pendekatan Kesisteman. 1999. Jakarta: Kantor Menteri Negara Pendayagunaan BUMN/ Badan Pembina BUMN.

Starr. P. 1988. 'The Meaning of Privatization'. Yale Law and Policy Reviews. Vol. 6: 1101-36. Strategi, November 1999.

Sundaram, Jomo K (ed.). 1995. Privatizing Malaysia: Rents, Rhetoric, Realities. Boulder, Colorado: Westview Press.

Wortzel, Heidi Vernon and Wortzel, Lawrence H. 1989. 'Privatization: Not the Only Answer.'. World Development. Vol. 17. No. 5: 633-641.

Newspaper and Magazine Asiaweek, 22 January 1999.

Far Eastern Economic Review, 4 March 1999 and 15 November 2001.

Gatra, 25 April 1998.

Kompas, 27 April 1998.

Reuters, 13 December 2001.

Tempo, 23-29 October 2001.

The Asia Wall Street Journal, 31 March 1998.

The Jakarta Post, 2 July 2005.

The Nikkei Weekly, 10 November 1997.

Van Zorge Report on Indonesia. Vol. III. No. 20, 20 November 2001.

Van Zorge Report on Indonesia. Vol. IV. No. 17, 8 October 2002.

World Development Report. World Bank. 1993.

International Monetary Fund. 1998. Indonesia Memorandum of Economic and Financial Policies. (World Wide Web document, URL: http://www.imf.org/ external/np/loi/011598.HTM. 15 January 1998).

Ministry of State Enterprises (World Wide Web document, URL: http://www.bumn. go.id/masterplan.html)

Copyright (c) 2008 Journal of Indonesian Social Sciences and Humanities

Refbacks

  • There are currently no refbacks.