“We have finished the preparation stages. In the near future, we will enter the implementation controlling phase,” Sjafrie told a seminar at the Defense Ministry office.

The current hand over processes are being carried out by the TNI business transfer supervision team, comprising officials from the TNI and Defense Ministry.

Representatives from the Finance Ministry, Cooperatives and Small and Medium Enterprises Ministry, State-Owned Enterprises Ministry, and Justice and Human Rights Ministry, are also in the team.

Secretary to the team, Brig. Gen. Ali Yusuf, expressed optimism that the transfers would finish in August.

“However, if we fail to meet the deadline, the Finance Ministry would take over remaining businesses. We will leave them under Finance Ministry authority,” Ali said.

The decision to end military businesses was made in October 2004 when the House of Representatives issued a law to end  TNI businesses.

The law stipulated a five-year deadline to implement this.

In 2009, then defense minister Juwono Sudarsono said the pro-cesses would finish by October last year.
The government failed to do this.

President Susilo Bambang Yudhoyono later issued a decree five days before the deadline, postponing the date for an indefinite period.

Most military businesses, set up since the New Order era, are cooperatives or foundations.

According to Ali, the team has so far made a list of 1,321 cooperatives, 53 firms, 23 foundations, and 1,175 other subsidiaries leasing state properties for commercial  purposes.

The Defense Ministry shows the total gross assets of these business units totaled up to Rp 3.2 trillion (US$355.2 million) with an annual profit of about Rp 268 million.

However, Ali said the total assets being transferred to the government would be lower than these figures.

“It will depend on the ownership status of each asset. For example, the government will not take over assets of some cooperatives and foundations which belong to individual TNI members, not to the TNI as an institution.

“We will ensure these cooperatives and foundations are in compliance with existing regulations,” he explained.

Critics have said that military businesses were a vehicle for members of the military to amass personal wealth.

But, Sjafrie denied that the transfers of these businesses  would slash the gross income of TNI officers.

“The welfare of military personnel is the responsibility of the state,” he said.

Sjafrie admitted that current salary of military officers were relatively low. “We hope the program to increase remuneration will end the problem soon.

In the TNI, the lowest level personnel are prioritized to benefit from the improved remuneration program,” Sjafrie said.

Critics have said that military businesses were a vehicle for members of the military to amass personal wealth.

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