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Indonesia
>> Regional Overview >> Indonesia Overview Program Data Sheet
497-010
USAID MISSION: Indonesia
PROGRAM TITLE: Strengthening Local Government (Pillar: Democracy, Conflict, and Humanitarian Assistance)
STRATEGIC OBJECTIVE AND NUMBER: Decentralized and Participatory Local Government, 497-010
STATUS: Continuing
PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE: $7,451,000 DA, $7,000,000 ESF
PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE: $6,951,000 DA, $7,000,000 ESF
INITIAL OBLIGATION: FY 2000 ESTIMATED COMPLETION DATE: FY 2004Summary: On January 1, 2001, Indonesia launched a rapid and deep devolution of authority to local levels of government, many of which lack the skills needed to manage functions, services, and resources in an effective, transparent, and participatory manner. Successful decentralization is a key factor in maintaining Indonesia's territorial integrity by responding to local demand for more equitable political and fiscal relations between the center and the regions. Local governments must develop the capacity to deal with a number of issues important in the post-September 11 environment in Indonesia. These include conflict prevention to counter ongoing ethnic and religious conflict that often involves extremist militant forces, effective budget planning, service delivery, economic development to minimize the effects of rising poverty and absorb the growing number of internally-displaced persons, and transparent decision-making to open clear channels for citizens to participate in their government. USAID's program to support the establishment of effective local government in a new era of decentralization includes technical assistance and training to-
- adopt fiscal and administrative decentralization policy;
- improve local governments' participatory planning and budgeting capacity;
- restructure local water utilities into profit-making entities;
- strengthen independent local government associations; and
- link Indonesian and U.S. local governments under the Resource Cities program.
Inputs, Outputs, and Activities: FY 2002 Program: Through technical assistance and training, USAID programs are building the capacity of more than 60 Indonesian local governments to carry out their new responsibilities under decentralization. USAID programs will lead to the adoption of improved local budget and planning processes which reflect community priorities in areas such as basic education, health, natural resource management, financially viable water services, and associations of local governments. USAID programs generate models, such as participatory development plans, that can be replicated by Indonesia's 400 local governments. USAID will facilitate the central government's transition to a policy-making role in support of decentralization. FY 2002 activities will also include facilitating the transition to decentralization by launching a resource center for local governments that will serve as a mechanism for disseminating replicable models and innovative practices of good governance, and developing local capacity to quickly monitor and assess the decentralization process to better inform key decision-makers.
USAID's local government participatory planning model, now being implemented in 30 locations, offers Indonesians their first real opportunity to have a voice in local government decision-making. Planned FY 2003 Program: USAID plans to use FY 2003 resources to continue capacity-building activities for local governments in the areas of budget, planning, and water services. USAID will place increased priority on further development of sustainable independent local institutions (associations and a local government resource center). These institutions will ensure that, as packages of models and skills for improved local governance flow from USAID capacity-building programs, they are disseminated and adopted widely by Indonesian local governments. USAID will help develop a local-government finance policy framework outlining the steps to enable local governments to access private credit markets to meet infrastructure and other long-term financing needs. USAID may also expand its planning and budgeting technical assistance and training to local governments in West Papua, Indonesia's least-developed region that was recently given special autonomy status under decentralization.
SUBMISSION OF THIS PROGRAM DATA SHEET CONSTITUTES FORMAL RENOTIFICATION OF USAID'S INTENT TO OBLIGATE FY 2002 RESOURCES FOR THE ACTIVITIES DESCRIBED ABOVE. Performance and Results: USAID policy assistance has played a critical role in assisting the Government of Indonesia (GOI) to develop national revenue-sharing formulas, revise local tax policy, and adopt regulations that clarify the roles and functions of local government. USAID is the only donor with substantial programs at both the local and central levels of government-its policy advice is valued by the GOI because it is informed by the realities of local situations.
USAID assistance directly reaches more than 60 local governments (15% of all local governments): 30 are preparing multiyear investment plans that feature meaningful community participation; nine are developing performance budgets and four are making other financial management improvements. All these local governments have committed financial resources to cooperate with USAID. Twelve local governments are successfully restructuring water enterprises to increase profitability and improve
service delivery. USAID assistance to local water utilities in 2001 expanded access to piped water for 370,000 people and led to $5 million in subsidy reductions. Four local governments and three associations are now partnered with U.S. cities and associations in Oregon through the Resource Cities program that promotes information exchanges on improving local government. USAID-assisted associations of local government play a critical role in the current debate on revising the two foundation laws governing decentralization, and help ensure that views of local government and the public are channeled to decision-makers in Parliament and GOI ministries.
USAID assistance helped the city of Jember's water utility overcome bankruptcy and win an award as "best public service enterprise in Indonesia." Principal Contractors, Grantees, or Agencies: USAID anticipates the continued involvement of Research Triangle Institute, the International City/County Management Association, the Asia Foundation, the Urban Institute (prime), and Chemonics International (sub). USAID also works with key GOI ministries and local associations. USAID will select new implementing organizations for activities on municipal finance and monitoring local government performance.
US Financing in Thousands of Dollars
497-010 Decentralized and Participatory Local Government DA ESF Through September 30, 2000 Obligations 58,404 0 Expenditures 46,954 0 Unliquidated 11,450 0 Fiscal Year 2001 Obligations 9,496 2,500 Expenditures 5,915 0 Through September 30, 2001 Obligations 67,900 2,500 Expenditures 52,869 0 Unliquidated 15,031 2,500 Prior Year Unobligated Funds Obligations 0 0 Planned Fiscal Year 2002 NOA Obligations 7,451 7,000 Total Planned Fiscal Year 2002 Obligations 7,451 7,000 Proposed Fiscal Year 2003 NOA Obligations 6,951 7,000 Future Obligations 0 0 Est. Total Cost 82,302 16,500
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Last Updated on: May 29, 2002 |
