Indonesia

The National Program for Community Empowerment (PNPM) Mandiri program is the key component of the Indonesian Government's cluster two poverty alleviation program. The... Show More + work of the PNPM Support Facility (PSF) goes beyond coordination. The PSF provides technical assistance in the continuous effort to build capacities of communities, governments at the local, provincial and national level, and civil society. It assists the development of a very robust monitoring and evaluation framework which supports continuous improvements to the program. It makes sure that donor funds are used appropriately. The PSF also facilitates the implementation of analytical work that forms the foundation for the planning, management, and improvement of government poverty-reduction programs. A key element of the PSF approach is innovation: it provides space for explorations and experimentation. PSF's pilot initiatives are highly innovative and carry the potential for high rewards. The PSF has various comparative advantages. By tapping into the World Bank's global knowledge base, it can facilitate access to international best practices across a range of development areas. The success of the PSF has not gone unnoticed. In recent years, PNPM has served as a model for the development of similar community-driven development programs, such as in Afghanistan. The PSF plays a direct role in this. Knowledge sharing continues to expand between the PSF and parties interested in emulating the success of PNPM. Show Less -

The National Program for Community Empowerment or PNPM Support Facility (PSF) was established in 2007 to support the management and technical implementation of the Government... Show More + of Indonesia's (GOI) flagship community-based poverty alleviation program, the PNPM, or Program Nasional Pemberdayaan Masyarakat Mandiri (PNPM Mandiri). PNPM Mandiri is the GOI's operational umbrella for all poverty programs that use a community empowerment approach to ensure the poor benefit from improved socioeconomic and governance conditions. Through the PSF, development partners provide high-quality, coordinated technical assistance, policy and planning advice, as well as targeted financial assistance to the GOI to support PNPM Mandiri. The overarching objective of the PSF is to assist the GOI in providing effective leadership and management of PNPM Mandiri. Its specific objectives are to: a) ensure better coordination amongst development partners and across grants supporting PNPM Mandiri; b) develop capacity at all levels to plan, manage, and improve poverty reduction programs; c) reduce poverty through government and civil society partnerships; and d) support high quality monitoring and evaluation efforts. The governments of the Netherlands, Denmark, Australia, and the United Kingdom have contributed more than US$67 million to the Facility. The GOI and the World Bank are also engaged in discussions with other prospective development partners, such as the European Commission and USAID, regarding additional contributions to support PNPM Mandiri. Show Less -

Indonesia is an oil producing country and is the only East Asian member of the Organization of Petroleum Exporting Countries (OPEC). Over the years, this endowment of... Show More + oil resources has been steadily exploited with substantial rents flowing to the government from production and exports of crude oil. The country is also one of the world's largest exporters of another petroleum resource, liquefied natural gas. The introduction of a new oil and gas law in 2001 (the law) provides the policy and legal basis for moving away from the present ineffective and fiscally inefficient fuel pricing and subsidy regime, towards the goal of an independent, reliable, transparent, competitive, efficient, and environmentally friendly petroleum sector that encourages the growth of the national potential and role and at the same time does not exclude the Government of Indonesia (GoI) fully meeting its social responsibility towards certain community groups. Implementation towards achieving the goals set out in the Law has been slow and hesitant. The Indonesian treasury is still saddled with a rather inefficient and ineffective fuel pricing and subsidies regime. This present report identifies a way forward for Indonesia to meet the requirements of the Law. That way forward will progressively eliminate the waste inherent in the present system, signal correct market behaviors to consumers, achieve large fiscal savings and help the economy grow while the any negative impact on the poor and vulnerable are cushioned. Chapter one tracks the recent history to the present situation in terms of petroleum fuels utilization, supply, pricing and subsidies, and identifies some of the key impacts of the prevailing policies. Chapter two identifies the target petroleum fuel market regime based on the goals established in the law, evaluates where the present policy falls short, and proposes measures that will help Indonesia achieve the outcomes that are consistent with the law. Chapter three proposes a step-wise transition that will be required to transform the present regime and at the same time opening the oil products market to the beneficial forces of competition and restructuring Pertamina's downstream operations. Show Less -

International financial markets remain turbulent, dominated by the political and economic challenges of the Euro zone debt crisis and signs of weakening global growth.... Show More + However, to date, although portfolio outflows have been seen, Indonesia's domestic economy continues to perform strongly. The economy remains relatively well-positioned to weather future external shocks and steps have been taken to improve crisis preparedness, for example, by increasing the flexibility of any fiscal response. The Euro zone continues to grapple with the policy responses to stem the crisis. The political and policy responses to the Euro zone debt crisis have been evolving on an almost daily basis, influencing global financial markets, risk appetite and capital flows to emerging economies such as Indonesia. Increased funding stress for European financial institutions was followed by a coordinated announcement of liquidity swap arrangements by central banks including the Federal Reserve and European Central Bank. In addition to putting in place policies to address the near-term impacts of any future shocks, with a protracted weakness in external demand likely, it is an opportune time to move forward with investments and reforms which can enhance domestic productivity and growth and attract more stable and longer-term capital flows. Indeed, the 2012 budget again significantly boosts capital expenditure, although ongoing budget execution challenges could hinder the effectiveness of the increased allocation on infrastructure improved infrastructure and investment climate can help to promote further the positive recent performance of Indonesia's manufacturing sector, after its weakness in the decade following the Asian crisis. The scope for productivity growth within manufacturing and other sectors through technology adoption and adaption can also be enhanced by further improvements in the quality of education of the labor force and the institutional environment for research and development. Show Less -

This paper estimates average and marginal returns to schooling in Indonesia using a non-parametric selection model estimated by local instrumental variables, and data... Show More + from the Indonesia Family Life Survey. The analysis finds that the return to upper secondary schooling varies widely across individual: it can be as high as 50 percent per year of schooling for those very likely to enroll in upper secondary schooling, or as low as -10 percent for those very unlikely to do so. Returns to the marginal student (14 percent) are well below those for the average student attending upper secondary schooling (27 percent). Show Less -

A decade of implementation of decentralization and regional autonomy in Indonesia has produced a mixture of positive and negative results. Indonesia has made much progress... Show More + in implementing regional autonomy, but urgent problems remain to be solved (USAID, 2009; Dwiyanto et al., 2007). In an attempt to address various issues surrounding functional assignment, research and public consultations have been undertaken with the following two strategic purposes: (1) in the short-term, to gather input to revise and improve the national policy on decentralization and regional autonomy as stated in Law No. 32 Year 2004; and (2) in the long-term, to formulate a Grand Design for Regional Autonomy (GDRA). This study focuses on the assignment of governmental functions due to the topic's widespread and extensive implications on government administration in the regions. As has frequently been documented, the implementation of regional autonomy in Indonesia still leaves many problems related to functional assignment among central, provincial, and district/city governments (Ferrazzi, 2008; Ministry of Home Affairs, 2009). This paper will explain the findings of the research conducted in the three aforementioned provinces. The elaborations in this paper constitute problems and obstacles in functional assignment, implications of the lack of clarity in functional assignment toward various aspects of regional government, and recommended actions to rectify and reform functional assignment across government levels. Recommendations are classified based on recommendations for the revision of Law No. 32 Year 2004 and the formulation of GDRA. Show Less -

Minimum Service Standards (MSS) in Indonesia is a measurement for evaluation of the local government performance in the implementation of obligatory functions related... Show More + to basic services. The combination of obligatory functions, accompanied by MSS, aim to provide access for citizens at the minimum level of quality at a given time. The frameworks of MSS were developed started in early 2000 in respond then Law 32/2004 been intensively developed in Indonesia following the issuance of Law 32/2004 which stated in Articles 11 and 12 that while measuring the performance of obligatory functions government will refer to a MSS. These provisions are elaborated, which is defines MSS as a measurement of a type and quality of basic public service that all citizens have the right to receive. The program is a Government of Indonesia (Directorate General Bangda, MoHA) initiative, supported in its implementation by Decentralization Support Facility (DSF)/World Bank. With a view to improving the accessibility and quality of basic public services, the program supports the implementation of the minimum service standards by building government capacity to cost and implement MSS in the regions. The objectives of the program are to: strengthen MoHA capacity to work with other ministries, to cost MSS for selected sectors; improve central and provincial government support to district/city for MSS implementation; develop local government capacity for implementing MSS for selected sectors; and analyze factors underlying the successful implementation of MSS and possible relationships with the achievement of the Millennium Development Goals (MDGs). Show Less -

Statistics from the UN Joint Monitoring Program show sanitation progress in Indonesia to be off-track coverage has to increase by more than 13 percentage points nationally... Show More + from 2008 to 2015 to meet the sanitation target of the Millennium Development Goals, which the Government of Indonesia committed to in 2002. However, after being a largely forgotten issue in the 15 years following the Asian financial crisis of 1997-98, sanitation is now receiving increasing attention from all levels of government in Indonesia. Recently the Government of Indonesia has made considerable efforts to mobilize additional resources in order to finance the country's needs for infrastructure projects. The purpose of the Economics of Sanitation Initiative (ESI) is to promote evidence-based decision making using improved methodologies and data sets, thus increasing the effectiveness and sustainability of public and private sanitation spending. Better decision making techniques and economic evidence themselves are also expected to stimulate additional spending on sanitation to meet and surpass national coverage targets. The specific purpose of the ESI phase two studies is to generate robust evidence on the costs and benefits of sanitation improvements in different programmatic and geographic contexts in Indonesia, leading to information about which are more efficient and sustainable sanitation interventions and programs. Basic hygiene aspects are also included, insofar as they affect health outcomes. Show Less -

This brief includes the following headings: international evidence on School Based Management (SBM), decentralization, and student learning outcomes; Pak Fasli, Deputy... Show More + Minister for National Education, on SBM; key recommendations on advancing SBM; thematic education dialog workshop and seminar update; good practice information on the web; managing schools for better student results in Gorontalo; beyond project support for SBM in Banten; community participation in Kupang; what can schools do better? School autonomy and accountability in Bogor; and a role for the province in supporting SBM in Aceh. Show Less -

Papua has abundant natural and fiscal resources but also faces great development challenges. On the one hand, Papua currently has the largest per capita fiscal capacity... Show More + after West Papua. Papua is rich in natural resources such as non-oil-and-gas minerals and forest products. On the other hand, development challenges in Papua are significant, including geography, terrain and demography. In general, Papua is still underdeveloped both socially and in economic terms compared to other regions in Indonesia. This underdevelopment is evident in most poverty, education, health, and infrastructure indicators. The economy and investment in Papua are dominated by the mining sector and, in a distant second place, the agricultural sector. Between 2004 and 2007, the mining sector accounted for more than 50 percent of the Papua's gross regional domestic product (GRDP). As a consequence, economic growth was determined by fluctuations in mineral commodity prices. The second largest sector is agriculture, which accounts for about 14-18 percent of GRDP. This sector absorbed the most workers in Papua province until 2008. Meanwhile, industry continues to lag and contributed less than 10 percent to GRDP. The PEA is a part of the PEACH (Public Expenditure Analysis and Capacity Harmonization) program. This program is an initiative of the Government of Papua to continuously improve its public financial management performance. Consequently, the analysis contained in this report addresses issues that are the region's main focus. Today, the Government of Papua is trying actively to achieve a 'New Papua' through implementing the following agenda: a) restructuring the local government; b) developing a prosperous Papua; c) developing a safe and peaceful Papua; and d) improving and accelerating the development of basic infrastructure and facilities. Show Less -