Four key Ministries play a central role in economic governance. These are the Ministry of Finance, Ministry of Trade, Coordinating Ministry of Economic Affairs and Bappenas.

Through a variety of mechanisms, the GoA has worked closely with these Ministries. Significant reforms have been achieved and reform processes are ongoing. The findings of the 2008 OECD Economic Assessment Report and Analysis of GoI economic reforms match the GoI’s own economic reform program. However, reforms have not been evenly undertaken or achieved across or within Ministries, and ongoing support is required to contribute towards improved self-management. The following is a brief description of each of the four Ministries and some of the ongoing reform processes and challenges.


The Ministry of Finance (MoF) is the largest and perhaps the most significant of the four key agencies and also where the pace of reform has been most noticeable. MoF employs over 66,000 public servants and has strategic financial management responsibility. MoF collects the largest amount of revenue for the state budget. Since at least 2004 MoF has undergone several organizational reform processes which have included the formation of the Large Taxpayers Office. Ongoing reform processes in MoF include:

  1. Organizational restructuring,
  2. Improving businesses processes,
  3. Further developing management of human resources, and
  4. Improving remuneration.


Ministry of Trade (MoT) has overall responsibility in matters related to trade and its mandate overlaps somewhat with that of the MoF. In consultation with GoI’s other 34 ministries, MoT formulates and implements national trade policy. This includes internal and external trade, standards and weights and measures. MoT has a staff of approximately 3,000 public servants.
MoT’s main objectives include:

  1. Coordinating GoI’s multilateral, regional and bilateral trade position,
  2. improving effectiveness in pursuit of Indonesia’s international trade interests, and
  3. Working with other ministries to develop and implement policies which improve Indonesia’s capacity to export.


Coordinating Ministry of Economic Affairs (CMEA) is responsible for effectively coordinating and synchronizing economic development agencies within the GoI. It places emphasis on the coordination of planning and preparation of economic policies and on synchronizing implementation. As coordinating Ministry it plays an important role in Indonesia’s economic governance.

 

Bappenas is the National Development Planning Agency and has a wide ranging responsibility for development planning. This responsibility ranges from the coordination of five year development plans and coordination of all official development assistance (ODA) to coordination of macro-economic development. Bappenas’ roles and functions overlap with a number of other government agencies. It is an important agency in the provision of  infrastructure and public and private partnerships (PPP). Bappenas employs approximately 800 civil servants who have relatively high levels of academic qualifications and good planning skills.


Institutional Capacity Development Approach

The AIPEG Facility focuses evenly on the “governance” and economic aspects of “economic governance” by working with Ministries and Directorates General on their institutional development priorities. This does not mean that requests for specific policy and technical assistance in particular areas will not be considered, but these will be seen in the context of contributing to organisational strengthening rather than the primary/sole kind of contribution. Australia’s cooperation with GoI agencies will be framed within the GoI’s overall development and organisational strategies and plans.

 

The emphasis is on joint identification of priorities and work plans within each GoI agency and use of a range of institutional strengthening models and frameworks to suit the agency and its status and priorities. A range of activities are funded through the Facility selected from a “menu” of approaches including long-term or short-term advisers, mentoring, twinning relationships, support for task-focused or general professional networks within or outside particular agencies, scholarships, workplace exchanges, study tours, attendance at conferences, training, etc. Men and women will be expected to benefit equally from participation in these activities.

 

Emerging international thinking about institutional capacity development approaches are monitored by AusAID and AIPEG personnel and integrated with lessons learned within the Indonesian context generally and AIPEG Facility specifically. A key approach for all personnel involved in AIPEG-funded activities is to remain open to learning about appropriate ways of working in each specific context and not to assume that a universal or single approach is appropriate.


Facility Management

The Management Support Team (MST) is responsible for supporting all levels of Facility activity and for cross-facility coordination. The MST’s responsibilities include:

  • secretariat service for the Advisory Board (AB)
  • promoting high quality relationships at the cross-facility level, ensuring those between officials and Advisers within each partner Ministry or Directorate General are sound
  • promotion of agreed Facility principles and approaches, including consideration of gender integration across all Facility activities; and quality assurance and monitoring
  • support for Ministries and Directorates General, with their Advisers, to produce high quality activity designs and to implement activities through the activity cycle, to agreed standards, with responsibility shifting over time from MST management to GoI management


Technical Support Pool
The MST is also responsible for coordinating inputs of a Technical Support Pool (TSP) which will be built up and maintained over the life of the Facility. The TSP comprises preapproved selection of specialists in a variety of economic governance and public sector institutional strengthening areas (including gender analysis, capacity development, leadership coaching, monitoring and evaluation etc.), who can be drawn upon at relatively short notice if required for Partner agency activities. It is preferred that specialists be given repeat roles if appropriate, reflecting the value of continuity in ongoing relationships for effective capacity development. People in the pool are selected on the basis of a combination of specialist skills and their openness to learning new ways of working in Indonesia alongside Indonesian colleagues.