Indonesia Aid Effectiveness

Indonesia Road Map for Aid Effectiveness Lukita D. Tuwo Deputy Minister/Chairman for Development Funding Ministry of National Development Planning/Bappenas

Manila, 24-25 August 2009

… only for Health sector

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Milestones in Aid Effectiveness In late 1990s, international movements of AID realized that transaction cost of aid was significant, began working to harmonize Monterey (2002),

International Conference on Financing for Development, agreed to provide more financing for development, and aid effectiveness

Rome (2003) High-Level Forum on Harmonization, committed to take action to improve the manageme and effectiveness of aid, and to take stock of concrete progress Paris (2005), High-Level Forum endorsed the Paris Declaration on Aid Effectiveness to promote the effective use of aid funds.

Accra (Sept 2008), High-Level Forum Doha (Nov 2008), Follow-up International Conference endorsed Accra Agenda of Action/AAA on Financing for Development to accelerate progress in Aid Effectiveness ndorsed Doha Declaration on Financing for Development, reaffirming the Monterrey Consensus

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he Jakarta Commitment: Aid For Development Effectiveness, Indonesia’s Road Map To 20

Indonesia’s Development Challenge 

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Indonesia is a middle income countries, with a 230 million of population. Yet, Indonesia continues to face significant development challenges, especially in the areas of poverty reduction, service delivery and decentralization. Poverty rates have fallen to 14.1% in 2009, yet large numbers of Indonesians remain poor and vulnerable. Regional disparities are a key feature of poverty in the country, given the vast size and varying conditions in different parts of the country. Further efforts is still needed for Indonesia to meet all the MDG targets. The implementation of decentralization remains complex and continues to pose challenges. Enormous efforts is still needed to address climate change issues (mitigation and adaption) 4

ODA Contribution to Development Effectiveness 

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The main constraint : not the lack of financial resources but the need to translate the existing resources into better development outcomes  to maximize the effectiveness of all its resources committed to development, including external assistance. Total all grants and loans less than 5% of government spending; How can ODA contribute to development effectiveness? • To ensure more effective and efficient utilization of domestic resources  to access international knowledge and best practice, and to enhance institutional capacity, • To establish systems that are up to standards of international best practice. It is about putting the right systems in place. Indonesia would like to : • Participate in and influence international aid architecture from a MIC perspective • Maximize impact of declining Official Development Assistance for development effectiveness • Expand partnerships with alternative forms of finance 5

ODA Contribution to Development Effectiveness Sound Program

Development Effectiveness

Instruments (Budget, Procurement, etc)

Resources (Fund, Human Capital, etc)

AID EFFECTIVENESS

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Indonesian Road Map to Development Effectiveness 

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Paris Declaration (2005) and Accra Agenda for Action (2008) – taking it further Jakarta Commitments: • Joint aspirations (not legally binding) regularly reviewed • Three areas of commitments

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Action plan and Targets to 2010 and vision to 2014

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Paris Declaration (2005) From donorship to ownership Develop ment Eff ec ti ven ess

Al ig nment 2 (Donors - Partner)

3 Harmo ni sation (Donors - Donors)

Par tners set the ag enda

Ali gning with partner s’ agend a Estab li shi ng co mmo n arrang ements

Us ing par tn ers ’ sys tems

Si mpli fyi ng proce du res

Shar ing infor matio n

4. Results, & 5. Mutual accountability

hip 1 Owners (Partner countries)

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Accra Agenda for Action/AAA (September 2-4, 2008) PDA Making progress, but not enough, and will take action to accelerate progress  

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Strengthening Country Ownership over Development Building More Effective and Inclusive Partnerships for Development Delivering and Accounting for Development Results Looking Forward • encourage developing countries to design—with active support from donors—country-based action plans that set out time-bound and monitorable proposals to implement the Paris Declaration and the Accra Agenda for Action

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Areas of Commitments

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Commitment 1: Strengthening Country Ownership over Development • Improving the international governance of aid and strengthening south-south cooperation • Strengthening capacities and using stronger government systems  Development partners will align their programming cycles with those of government, use the government format for reporting their assistance, and increasingly use government's financial management and procurement systems. In the spirit of partnership, we will also encourage development partners to fully, sincerely and transparently untie their aid.

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Commitment 2: Delivering and Accounting Development Results • Strengthening a focus on, and capacity to manage by, development results • Working together to review progress across development partnerships

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Commitment 3: Building More Effective and Inclusive Partnerships for Development • Developing a new partnership paradigm • Strengthening existing aid instruments and shaping new ones • Expanding dialogue to include new actors

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Indonesian Roadmap for Aid Effectiveness (Jakarta Commitments) – Progress 

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Of the total 30 partner of development, 26 partners have signed the document. We have established Secretariat for A4DE, including donor trust fund to support it’s activities. There are still reservations on issues on untying aid, budget alignment and using procurement systems. Only some donor has a roadmap to increase untying aid Most DP interventions/responses on the action matrix, eager to see the first steps to be taken by GOI 11

A4DES Coordination Mechanism Ministerial policy guidance Reporting

Policy Guidance

Aid for Development Effectiveness Secretariat

Steering Committee

Management Office

Management Committee

Reporting to Chair of Management Committee

Thematic Working Groups

Supporting all levels

Funding Mechanism A4DE Trust Fund

Development partner

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Flow of funds

Working Groups Unit/Working Group

Participating DP *)

WG Procurement

WB, ADB, JICA, Netherland, Ausaid

WG Public Financial Management

WB, JICA, Netherland, Ausaid, Switzerland, DFID

WG on Dialogue Mechanism

WB, JICA, Netherland, Ausaid, Switzerland, DFID, CIDA, Germany, Usaid

WG Development of Financing Mechanism

JICA, Netherland, Ausaid, Switzerland, DFID

WG Planning, Monitoring & Evaluation

WB, JICA, Netherland, Ausaid, Switzerland, Germany, DFID, Usaid

WG Cap. Building & Knowledge Management

WB, JICA, Ausaid, Switzerland, DFID, CIDA, UNDP, USaid

*) Other Development Partners are invited to join the Working

Groups

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PA RIS D ECL ARATI ON : G OVERN MEN T PR OCUR EME NT S TRATEG Y Di ag no st ic Works (2009 -201 0)

Baseline Indicator & Compliance Performance Indicator Gap Analysis and Recommendation (country system - dev. partners’ system)

Strategic Plan : GP Reform (Phase 2)

St ra tegy

Imp rovem ent on Co un try Syst em

Improvement of the GP’s System Government – Dev. Partners Dialogues Government – Dev. Partners Action Plan

Alig nmen t

Using Country’s Procurement System

NATIO NAL REFO RM on GOV ER NMEN T PR OCUR EMEN T  Government Procurement Reform started in year 2000 following the “national reform 1998”. GP reform is a part of bureaucratic and financial reform.

 3 Aspects in GP Reform : 1. Le gi slati on an d Reg ul atory F ra mewo rk. The current national regulation is Presidential Decree Number 80 Year 2003. PD 80/2003 is a national regulation and guidelines to carry out public procurement by central/local government institutions and state-owned enterprises.

1. Streng then ing the Pra ct ition ers. Since 2005, procurement practitioners have to hold national procurement certification.

1. Re form on I nst itution al Framew ork .

Presidential Decree Number 106 Year 2007 concerning Establishment of National Public Procurement Agency (NPPA). The NPPA is aimed particularly to : develop strategic, policy and regulation; Conduct monitoring-evaluation and developing eprocurement; develop and improve capacity of procurement practitioners; and provide advice and recommendation.

Dare to Do… "Vision without action is merely a dream. Action without vision just passes the time. Vision with action can change the world." Joel Barker

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Thank you