Jakarta, October 16 2014: A decade-long ‘cash management’ reform by the Government of Indonesia has resulted in reduced costs for taxpayers and better control of public ’cash’, according to a book launched today and jointly produced by the Finance Ministry and the World Bank, entitled Cash Management Reform.
“Cash management reforms were a pillar of public financial management reforms in Indonesia. Reform has allowed the Government to consolidate its cash balances into a treasury single account (TSA), streamline the receipt and payment processes, and improve accountability. The results are lower financing costs and improved control of both revenue and expenditures,” said Marwanto Harjowiryono, Director General of Treasury, Ministry of Finance.
The book focused on the importance of improved transparency and accountability in public financial management, in order to improve public understanding of how state funds are managed. The book outlines the various stages of reform, the successes achieved and the challenges faced in reforming the management of ‘state cash’. International practices on various aspects of cash management, and, wherever relevant, benchmarking the Indonesian experience against such practices, informed the book’s preparation.
“The Indonesian cash management story is one of success. This book provides lessons learned that can guide the next generation of reforms in Indonesia, in neighboring countries, and beyond the region,” said Rodrigo A. Chaves, World Bank Country Director for Indonesia.
The 1997 financial crisis in Asia prompted the initial idea for the book, as the crisis exposed entrenched institutional and structural weaknesses in the public management of most South East Asian countries. After the crisis subsided, the Government of Indonesia embarked on a range of reforms to improve the resilience of the economy and its ability to withstand shocks. The book is published in two languages, Indonesian and English, in order to appeal to audiences beyond Indonesia.
Not many books about public financial management are available to the general public. This book is not intended as a manual for cash managers. Instead, it was produced as reference material for university students and public finance specialists who wish to understand the fundamentals of cash management in Indonesia.
More than 1200 copies of the Indonesian version and 250 copies of the English version will be given to higher education institutions, financial audit institutions, banking institutions, and other relevant agencies. The preparation of this book was funded by the Multi Donor Trust Fund for Public Financial Management, with contributions from the governments of Canada, the European Union, the Netherlands, and Switzerland, and from USAID.