Multiplicities in governing telecommunications corporations in Indonesia : an analysis of post privatization corporate governance practices
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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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