Multiplicities in governing telecommunications corporations in Indonesia : an analysis of post privatization corporate governance practices
- Publication Type:
- Thesis
- Issue Date:
- 2007
Closed Access
Filename | Description | Size | |||
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01Front.pdf | contents and abstract | 893.97 kB | |||
02Whole.pdf | thesis | 36.08 MB |
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NO FULL TEXT AVAILABLE. Access is restricted indefinitely. ----- This thesis sets out to examine the rationale for and changes in the corporate
governance structure in Indonesia over the last decade. The Asian financial crisis of 1997
has changed the fate of Indonesia from being a 'miracle economy' to a 'near economic
collapse'. The crisis however was a wakeup call and a catalyst for reforming the country's
corporate governance practices. Devastated by the severity of the impact of the crisis, the
government of Indonesia has sought financial assistance from international donors which
imposed regulatory and policy reforms as preconditions for assistance. The preconditions
included reforms in corporate governance.
Yet a decade on from the aftermath of the financial crisis and after an effective
seven years following prescribed reforms including the introduction of a corporate
governance code, the perception of international investors and global financial institutions
about Indonesia's corporate governance regime and its viability for investment has hardly
improved. Thus this thesis argues that the internalization of basic domestic socio-cultural
and political values is an important precondition for effective legal reform including
corporate governance. The failure to take account of Indonesia's peculiar social and
cultural predispositions and political values are likely to undermine any reform efforts and
make any introduced code an empty slogan.
In the wake of the crisis, a number of Indonesian key state-owned corporations
including those of telecommunications were privatised necessitating important
implications for governance practice relating to these companies. The core objective of
the thesis is therefore to analyse post privatisation corporate governance practices in the
country with particular reference to the selected telecommunications sector. In pursuance
of this objective the thesis first examines the impetus for reforming corporate governance
in Indonesia amidst the country's economic development demands. Second, the thesis
investigates whether the catalyst for change applies globally and if there is any reform
model that can be used by Indonesia as an archetype for reform. Third, it traces and
analyses the regulatory and quasi-regulatory changes in Indonesia post the reform
initiatives. Fourth, the thesis assesses whether corporate governance models in western
countries fit into the domestic legal system of Indonesia. Finally, the thesis provides a
general overview and insights into corporate governance practices m the
telecommunications industry as a key industrial sector in Indonesia.
With a focus on the telecommunications sector, this thesis argues that the Asian
financial crisis, along with investors' consistent poor perception against Indonesia's
corporate governance practices and the international donors' preconditions for financial
assistance constitute main catalysts for the Indonesian corporate governance reform.
Indonesia has been keen to adopt models for reform borrowed from western countries. But
the reality is that there is no such model because any reform should be based on a specific
'legal culture'. Thus even though the government of the Republic of Indonesia has
ventured to implement the donors' prescribed reform policies, the results of the reform
have been fragmented. This is because the transplanted model is riddled with major
specific western legal attributes which are alien to the domestic contexts. The selected case
studies of the two Indonesian telecommunications incumbents further affirm this
argument.
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