JAKARTA — On an overcast Saturday in early January, the man in charge of modernizing Indonesian state companies suddenly lost control of his prototype electric sports car and plowed into the side of a mountain in East Java.
Dahlan Iskan, the Indonesian minister of state-owned enterprises, emerged from the crash unhurt. But his bright red, $300,000 Tucuxi, dubbed “Indonesia’s Ferrari” by the local news media, was totaled.
Now more than a year into his appointment, it is starting to look like Mr. Iskan’s efforts to pull off ambitious changes of his country’s bloated state sector are also hitting a wall.
Most of Mr. Iskan’s initiatives to fix state companies have either been revoked or blocked by the Indonesian Parliament, or remain stuck in ministries, according to government and parliamentary documents obtained by Reuters.
“The political challenge is still huge,” Mr. Iskan said in an interview. “Life is like that. It’s difficult to make this country better.”
Mr. Iskan, who started his career as a journalist and still writes a regular column in his newspaper, has abandoned plans to start mass production of the privately funded Tucuxi, named after a type of dolphin.
Criticism over the crash — he is being investigated by the police for driving an unlicensed car on public roads, although no charges have been filed — dented his reputation and further sapped his political capital, making it even tougher for him to battle powerful vested interests and champion overhauls.
It is a frustration that, according to those close to him, is motivating the media mogul to consider standing as a candidate in the presidential election next year despite being viewed as a rank outsider.
“I would lie if I say I don’t want to, I want to,” Mr. Iskan said, when asked if he wanted to run for the presidency.
He conceded he held only a small chance of winning, and declined to discuss his reasons for wanting to run because he is a serving minister. But several people close to Mr. Iskan said he saw the presidency as the only way to achieve change.
“Iskan is impatient over the lack of action just like any private sector guy,” said a person close to Mr. Iskan who declined to be identified because of the sensitivity of the issue. “He’s frustrated with the political pressure especially from the Parliament.”
President Susilo Bambang Yudhoyono, two-thirds of the way through his second and final five-year term, has made the overhaul of state companies a priority in developing the Indonesian economy. To this end, he turned for help to Mr. Iskan, who made his name turning the near-bankrupt Jawa Pos Group into one of the biggest Indonesian media companies.
But since his appointment in late 2011, Mr. Iskan has struggled to implement any of his plans. On Jan. 23, he announced that he might have to cancel all the initial public offerings he had planned for state companies.
It is not the first time that Mr. Yudhoyono has elevated a reformer and then failed to give them protection. His highly respected finance minister, Sri Mulyani Indrawati, became so exhausted by relentless political criticism that she stepped down in 2010.
Indeed, Mr. Iskan’s challenge was daunting enough before he came under fire for the car crash. Indonesia’s 140 state-controlled companies account for a huge chunk of the Indonesian economy, the largest in Southeast Asia. Their total revenues are estimated to have been 1,500 trillion rupiah, or about $154 billion, last year — nearly a fifth of the Indonesian gross domestic product. Several of the companies control major industries like energy, power and agriculture.
“There is an ownership fetish — the state wants to act as a entrepreneur,” said James Castle, chairman of CastleAsia, a consulting company working with foreign businesses in Indonesia. “They are everywhere, acting like private companies, and they crowd out the private sector.”
Even Mr. Iskan’s attempt to take control of the appointment of senior managers at state companies has largely failed.
Article source: http://www.nytimes.com/2013/02/23/business/global/23iht-rupiah23.html?partner=rss&emc=rss