Building U.S.-Indonesia Mutual Understanding Since 1994

Ensuring Delivery of Government Development Programs – The View from UKP4

On January, 20, 2011, USINDO hosted a Special Event titled “Ensuring Delivery of Government Development Programs – The View from UKP4” with Dr. Kuntoro Mangkusubroto.

Dr. Mangkusubroto underscored the importance of the USINDO Special Event as a way to foster understanding of the Indonesian government’s challenges in implementing and monitoring development programs. He is the chair of UKP4, presidential working unit for development supervision and control. He began his presentation by highlighting UKP4’s three major responsibilities, which are: monitoring government programs; debottlenecking and policy monitoring; and establishing and operating the Bina Graha Situation Room.  He continued his presentation by emphasizing the need to involve the private sector in Indonesia’s development programs. He stated that IDR 2,400 trillion per year (approximately US $ 27 billion) is needed to achieve 7% economic growth by 2014, 80 % of which is expected to come from the private sector. This funding will be used largely for infrastructure development.

Dr. Mangkusubroto also presented a report on Indonesian government projects which predicted rapid development and improved economic indicators during 2010 – 2014. He mentioned that in 2010 the Indonesian GDP increased by 6% as planned by the government. He stated that Ministry of Finance data, show that by 2014, nominal GDP per capita is projected to increase by more than 50%, the unemployment rate is expected to decrease from 7.3% to 5.0%, and the poverty rate from 12.9 % to 8.0 % . Dr. Mangkusubroto maintained Indonesia is on the right path to development, but he also emphasized that speed is the critical factor for Indonesia to perform better than it did in 2010.

Dr. Mangkusubroto also identified several challenges to accelerating development.   The first is the issue of corruption. There is a need to improve Indonesia’s Corruption Perception Index (CPI) from 2.8 in 2010 to 5.0 by 2014 The priority areas that need to be addressed include issues related to permits, taxes and customs, land, and labor. Democracy is the second challenge — not the idea of democracy but rather its application in the Indonesian context. At the local government level, regional autonomy, which is a result of democracy, is still difficult to apply. the biggest hurdle in this regard is to synchronize coordination between the local and the central governments.  The third challenge is bureaucracy.

Dr. Mangkusubroto asserted that it is UKP4’s responsibly to maintain consistency and synchronize the government’s programs, even those planned years earlier that have not yet been realized. Although all Ministries have proposed strategic plans and development programs, the country needs someone on the ground to monitor, report, and verify that programs are being implemented. UKP4 has been mandated to play this role. The unit thus monitors policy, supervises projects and makes sure these programs run smoothly to achieve their assigned goals. This is the first time that the President and the country have developed a tightly focused set of priorities, called the 11+3 National Priorities, which are to be completed by the end of 2014. The 11+3 National Priorities are: Bureaucratic Reform and Governance; Education; Health; Poverty Reduction; Food Security; Infrastructure; Investment and Business Climate; Energy; Environmental and Post Disaster Management; Disadvantaged, Isolated, Post Conflict Areas;  Culture, Creativity, and Technological Innovation; and three additional policies — Political; Legal and Security Affairs; and People Welfare

Dr. Mangkusubroto noted the President has given UKP4 full authority to monitor each Ministry’s implementation of the President’s policies. UKP4 also monitors to what degree the local government applies the action plan designed by the central government. The results of monitoring activities are reported to the President and Vice President bi-monthly in order to facilitate more accurate decision-making. The Bina Graha Situation Room is designed to acquire reports on national project implementation and facilitate efficient decision making. The entire operation is Geographic Information System-based. He added that the Indonesian government will use the system in conjunction with Managing Resonance Imaging to conduct REDD++ activities.

Dr. Mangkusubroto noted that coordination of major projects that involve not only the central government, but local government, public and private agencies, and government contractors is particularly difficult, often becoming the primary bottleneck for completing projects on time. When problems implementing projects are encountered, local governments often inaccurately report projects are running as scheduled but instead relocate or redesign projects to avoid the appearance of implementation issues.  For those communities dependent on these projects, this can be deleterious to their quality of life. There are also environmental implications. For these reasons, UKP4’s monitoring is critical to ensuring projects are implemented correctly and timely. The high-tech system used in the Bina Graha Situation Room is essential for informing the President of the real status of government projects outside the capital. With regard to concerns whether UKP4 would result in any Cabinet reshuffling related to its highlighting of implementation issues, Dr. Mangkusubroto emphasized that the unit is strictly used to monitor project implementation.

Dr. Mangkusubroto maintained that, despite significant progress, UKP4 still faces many obstacles in executing its mandate. These include managing the vast bureaucracy that is part of the Indonesian culture; coordinating various levels of government; navigating the non-partisan unit through the complexities of an adolescent democracy; and maintaining the courage necessary to make major breakthroughs.

Following his presentation, Mangkusubroto took questions from the audience.

Q : It is very impressive that UKP4 was established to supervise project implementation.  What happens when you see things that have to be debottlenecked with the many entities involved? How do you go about debottlenecking?

We will request advice from the Vice President on how to proceed or hold a briefing for both the President and Vice President to determine the best way to move forward.  Since I do not have the authority to instruct the Ministers on how to conduct their projects, the President or Vice President will do so.  Ministers typically follow the advice of the administration.  However, Ministers carry their own authority and periodically diverge from the advice of the administration.  This can be problematic.  Resolving these “communication” issues often solves this problem.  Regulatory questions that require legal review occur as well and are often time- intensive.

Q: To what extent can you mandate the quality and integrity of the projects done by the Ministries?

Last year we concentrated on project performance and did not record quality or integrity.  We are going to use this first year as a learning experience; however, we do not intend to monitor integrity, meaning corruption.

Q:  Is there any general strategy to encourage local capacity?

Twelve years ago, Indonesia had only 300 hundred regencies, or kabupaten.  Now we have 500. Capacity building is the real challenge.  We recognize it is a problem, one that is important to resolve.  Projects occur whether or not an office has the capacity to support it.  We work with USAID, AUSAID, and others because we are dealing with thousands of people who need development and cannot do it themselves

Q: Recently, Indonesia experienced twin disasters of earthquake and volcanic eruption.  That must have really put the capacity of the Situation Room to the test.  How did the Situation Room perform?

Actually it was at least a triple disaster counting the tsunami and another event in that same time period – mudslides in Wasior, Papua.  With the three different catastrophes, we required three different approaches.  Regarding the eruption of Mt. Merapi, we coordinated with USAID and Japanese Government and Japanese aid agencies. Based on our modeling, we were able to forecast an eruption within 24 hours and would have had a major loss of life if we hadn’t evacuated residents before the eruption.  It was the first time we had a 20 km evacuation zone.  Despite some deaths, the evacuation was overall quite successful.

For the Mentawai tsunami, we quickly reported the situation to the President and Vice President for them to decide how to approach the relief effort. Mentawai was easy to map, so we did not have many problems.

Papua was more difficult.  The terrain is more rugged and we are less familiar with the area.  We were ultimately able to map Wasior, where the mudslides occurred, which allowed us to respond to the event more quickly.  The difficulty lay in how and when to relocate residents. This difficulty aside, the system still proved to be useful in identifying affected areas and speeding up the  pace at which government was able to respond.

Mangkusubroto, Kuntoro 1-20