A critical enquiry into privatisation of state-owned enterprises: the case of PT Semen Gresik (Persero) TBK. Indonesia

Privatisation has been interpreted in a variety of ways. It encompasses a variety of aspects such as ideology, politics, the economy, financial, as well as social implications and the global context. Above all, privatisation is conclusively understood as a medium of ‘reality’ construction. It is a policy that does create a newly constructed distribution of wealth and power and reveals conflicts of interests among various parties. The fundamental determinant of privatisation is ideological, which is the government’s inclination to praise laissez faire (liberalism/neo-liberalism) rather than interventionist systems. The other central issue of privatisation is about efficiency or performance of state ownership vis-à-vis private ownership. Beyond these aspects, privatisation is commonly exercised by countries that are in the middle of a deep economic crisis, facing soaring foreign debt, dealing with a widening budget deficit and dependent on international agencies, particularly the IMF and the World Bank (Ramamurty, 1992). Considering the nature of privatisation, a study on privatisation of stateowned enterprises is argued to be best placed in such a context. Such a study is parallel to the call to study accounting within its environment. Whilst a variety of theoretical frameworks of critical accounting studies are available, this study utilises one of them which is the political economy of accounting (PEA), a theoretical framework pioneered by Tinker (1980), advanced in the works of Cooper and Sherer (1984) and others and ‘applied’ in the case of privatisation, such as, in the works of Shaoul (1997a, 1997b), Arnold and Cooper (1999), and Uddin and Hopper (2001, 2003). Grounded in such a framework, this study is an enquiry into the privatisation of PT Semen Gresik (Persero) Tbk., a state-owned enterprise in Indonesia which operates in the cement industry. The privatisation of this company was carried out as part of broader policy reforms and executed at three consecutive times in 1991, 1995, and 1998. These gradual divestments have been completed within different contexts. The latest partial divestment sparked heavy opposition to the hegemonic nature of MNCs from various stakeholders. A variety of issues ranging from justice and fairness, job security, financial aspects, to the economic sovereignty have been raised. Accounting and accountants are at the nerve centre of such discourse. Whilst various deficiencies are apparent in the ‘construction’ of such policy, above all, the case raises the fundamental issue of the distribution of wealth and power, which, unlike that in Malaysia, the Indonesian government has failed to address.