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Jakarta Post

Incoherence in the debate over ‘privatization’

  • Mohamad Mova Al’Afghani

Jakarta   /   Sun, July 22 2012   /  11:10 am

The term “privatization” is contentious and controversial but despite the controversy it causes, people often have no common understanding on what it actually means. As a result, debates on privatization are often misleading and incoherent.

When Law No. 7/2004 on Water was submitted for judicial review at the Constitutional Court, petitioners argued that the law was intended to privatize the water sector despite the fact that the term privatization is never mentioned in the law. Government representatives denied that the water law was a privatizing instrument since it did not regulate the transfer of shares from state-owned companies to the private sector.

Why is it that the government often denies privatization whereas NGO activists argue that privatization is occurring? It is because when the government says “privatization”, they often mean “divestiture”, i.e....