Modernisator Indonesia
Oleh : Lin Che Wei
Dikirim : 10/12/2008
Rapid changes in Indonesia's democratic system and business environment have had mixed effects on the acceleration of the nation's infrastructure development.
While the government has clearly recognized the importance of debottlenecking infrastructure development by launching various fast-track initiatives such as Infrastructure Summit 1 & 2 and the 10,000 MW electricity program, these programs have yet to yield clear results.
The so-called "fast-track infrastructure" has failed to resolve the very pressing infrastructure problem in Indonesia because often it is not supported by thorough implementation that complies with the existing regulatory framework or with current, medium or long-term plans. The fast-track program normally involves the creation of an ad hoc team to take the place of the more established government agencies.
The fast-track program frequently exposes an "instant" mentality, that is, seeking shortcuts to achieve quick gains without first calculating the overall consequences. This has been illustrated by recent debacles such as the "Blue Energy" program and "Supertoy" rice variety, where ad hoc initiatives from the private sector seemed to receive government support but without the involvement of the relevant regulatory bodies.
Learning from the failure of the fast-track program, it is critical that Indonesia search for a different framework to accelerate its infrastructure provision. The framework should not only be transparent enough to withstand public scrutiny but also, and more importantly, it should provide clear distinctions between the roles and responsibilities of the public sector and the private sector.
The existing model of delegating provisions to state-owned enterprises (SOEs) or to the private sector through public-private partnerships has resulted in meager efficiency gains. A very complex process combined with a poor investment climate has dampened private sector enthusiasm for investing in infrastructure projects.
Moreover, the unwillingness of SOE executives to spearhead any accelerated project is due to the potential judicial backlash which has resulted in the slowing down of the infrastructure program. The problem is characterized by lack of clarity over public authorities' responsibilities and weak coordination capacity. These combine to ensure there is a lengthy and complex process for completing any project transaction.
So, what is the solution to this problem? We believe there is a need to redefine the role of the planning agency, improve coordination among various bodies and reemphasize the essential fact that the provision of infrastructure is the main responsibility of every government.
International projects show us that improving coordination among agencies appears to be the most critical aspect to focus on.
Let's take China for example, where state planning has become strategic and flexible while market forces play an important role in its national infrastructure delivery.
Although authority has been extensively decentralized to the local level, the central government remains pivotal in developing the core strategic vision that binds the system together. The National Development and Reform Commission remains powerful and its role has never been undermined.
In Thailand, the planning and coordination system has been flexible and adaptive in deal with crises thanks to its long-term strategy. The system is still evolving effectively despite changes to its political context, as its strategic vision continues to play a central role.
In our context, the redistribution of power to local government has diffused the power of the planning and coordinating agency. The agency is now left with only its planning advisory role, while its coordination role is mainly limited to dealing with short-term implementation issues. The establishment of ad hoc institutions can only be part of the solution on a short-term basis. The issue of ensuring the sustainability of infrastructure delivery remains unresolved.
At the sectoral level, the challenges appear in redefining the roles and functions of some of the key institutions in the current era of less direct control over investment and operating decisions. These institutions need to align their structures so they operate within the current environment, as many of their functions have been distributed to other entities.
The integration and implementation of planning and coordination pose formidable challenges. We believe the central government needs to play a more assertive role in this area. It is of great urgency to rethink the responsibilities of key institutions and the consistency of their assignment according to the relevant laws and regulations.
Some key sectoral institutions need to transform their missions, reorganize their staff/skills and readjust their organizational structures. Institutional reconfigurations need to be considered for more effective coordination and planning. This can materialize only if one infrastructure subsector/sector is highly dependent on the presence of another infrastructure sector.
If we want infrastructure provision in Indonesia to be accelerated, it is paramount to realize that infrastructure provision should remain in the public domain and the role of the planning agency should be reinstated so it provides coordination rather than being just an ad hoc entity that is expected to deliver instant solutions.
At the end of the day, there is no shortcut to success. Instead, a clear and well-designed plan, backed by a solid framework for execution, will always be superior to any ad hoc or instant solution.
Jakarta Post, Mon, 09/15/2008
The writer is from Independent Research & Advisory Indonesia and is a co-founder of Modernisator. He can be reached at lin_chewei@pacific.net.sg
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