the role of bappenas on overcoming indonesian national crisis

The Role of Bappenas on Overcoming Indonesian National Crisis

Country ReportFor the Regional Development Planning Course

Sapporo, Hokkaido March 30, 1999

Dadang Solihin

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Contents

Bappenas Position My Job Organization Chart of Bureau for Regional Development II The National Crisis Social Safety Net Expectations from the Course


Bappenas Position (1)

BAPPENAS stand for Badan Perencanaan Pembangunan Nasional or National Development Planning Agency

On one hand Bappenas is acquire to take more responsibility to solve the problem,

On the other hand Bappenas as one of the Indonesian governmental institutions face some obstacles to do these obligations due to the lack of public trust to the Government.


Bappenas Position (2) Bappenas is the governmental institutional which responsible for the

Indonesian development planning. As the plan of work in these functions, Bappenas develops the National Five Years Development Plan (REPELITA) based on the National State Guidelines (GBHN).

Currently Indonesia does not have the National REPELITA. Meanwhile we have the GBHN that is the result of the People’s Representative Special Meeting in last November. This GBHN is more considered as a short term National Guidelines.

In the condition of not having legal document in planning, Bappenas face the current economic crisis, which need right solutions. Every mistake in handling this economic crisis will put the country’s future in danger.


My Job (1)

I currently work for the Bureau for Regional Development II Bappenas.

The bureau is responsible for the development of 13 provinces in East Indonesia which covers Kalimantan, Sulawesi, Nusa Tenggara, East Timor, Maluku and Irian Jaya.


My Job (2) The main tasks of Bureau for Regional Development II are:

1. Supervising Provincial Development Planning Agency (BAPPEDA), particularly in the implementation of bottom up planning process;

2. Supporting the development of regional development data and information;

3. Programming and controlling the specific grant for regreening and reforestation;

4. Programming and controlling the specific grant for area development assistance;

5. Supporting and controlling foreign assisted area development programs;

6. Programming and controlling development programs implemented by the Ministry of Home Affairs.


My Job (3)

The bureau consists of three divisions. the division for Development of Eastern Region I. This division is

responsible for 8 provinces in Kalimantan and Sulawesi. the Division for Development of Eastern Region II that is responsible

for the rest of the islands in the eastern region. the division for developing development programs for East Indonesia

(one sub‐division), and providing data and information of the development achieved and planned (one sub‐division).


Organization Chart of Bureau for Regional Development II


Bureau forRegional Development

II

Division for Development of Eastern Region I

Division for Regional

Development II

Sub‐Divisio

n for P

rovincial

Developm

ent A

ssistance

Sub‐Divisio

n for D

istrict &

Ru

ral D

evelop

men

t Assistance

Sub‐Divisio

n for A

rea

Developm

ent P

rogram

Division for Development of Eastern Region II

Sub‐Divisio

n for P

rovincial

Developm

ent A

ssistance

Sub‐Divisio

n for D

istrict &

Ru

ral D

evelop

men

t Assistance

Sub‐Divisio

n for A

rea

Developm

ent P

rogram

Sub‐Divisio

n for R

egional

Developm

ent II

Sub‐Divisio

n for D

ata &

Inform

ation

The National Crisis

Several incidents in the last couple of years that include natural phenomena such as a very long drought seasons and the social and political crisis which lead to the economic crisis is believed to main sources in this national crisis.


The National Crisis (1)

These sources can be categorized into four: First the economic pressure, externally and internally. Since the middle

of 1997 several Asian countries including Indonesia face the economic and monetary crisis.

This crisis begins with the weakening of the Asian local currencies to foreign currencies, especially to the US dollar.

This pressure is very difficult to avoid due to the condition that the Indonesian economic establishment is not as strong as predicted especially when later we found out that most production sectors are neither independent nor competitive.


The National Crisis (2) These conditions lead to very serious financial problems for the

Government and business. Bappenas (1998) stated that for the 1998/1999 fiscal year these financial

problems force the Government to assign foreign aids to almost the entire regular and development budget.

On the other hand the government can not depend on the businesses contribution because they also face some serious problems in maintaining the economic movement, some of them even lost the business.


The National Crisis (3) As the result, Indonesia then encounters a very big and unavoidable

unemployment crisis in urban and rural areas that is predicted to become more than 13,4 millions people.

Meanwhile, people’s spending capacity is significantly decreasing that make difficult for them to fulfill their needs in housing, clothes, and even access to education and health services.

The number of people who live under poverty is increasing rapidly, and estimated to become 80 millions of people proportional to 40% of Indonesian.


The National Crisis (4) Second, the monetary and economic crisis is coexist with strong political

pressures due to the reform movement that demand all of the government officials to establish a transparent, honest, fair and accountable working conditions, to take more stand to the people especially to the less‐fortunate group.

The reform movements cause a very fast and fundamental change in terms of social and political conditions in Indonesia lately.


The National Crisis (5) Third, external factors cause by the abnormal climate phenomena. Since

1997, natural phenomena known as El Nino cause a very long drought season in Indonesia.

This not only leads to the decreasing of agricultural production and preservation, but also to a very serious food shortage in some areas.

El Nino also causes some very big scale natural disaster such as forest blazing and others. Indonesia still has to face some problems due to the increasing of rain cause by what known as La Nina.

La Nina contributes to flood that will affect the national agricultural production and infrastructure in urban and rural areas.


The National Crisis (6)

The last and the most unexpected conditions are the people’s crisis of confidence to the government due to the government wrongdoing in the past, and the lack of government capability in solving the current national crisis.

In terms of national development, the lack of public confidence to the government is very big obstacles because the development program will not be successful without public participation.


Social Safety Net (1)


98/99 99/00 00/01 01/02 02/03 03/040

5

-5

-10

-15

RescueRecovery

StabilizationDevelopment

There are four strategic stages of development planning determined by the Government in order to solve the problems, to fulfill the urgent, realistic, and operational needs, and to avoid the people social and economic condition to become worse.

Social Safety Net (2) The first stage is rescuemission that predicted to require 1 (one) to 2 (two)

years since the 1998/1999 fiscal year. In this stage, it is predicted that the economic growth is below zero (under

the sea), while the government predicts (and hopes) that by the end of 1999/2000 fiscal year, Indonesia will gain the 0 % annual economic growth.

• The second is recovery stage that has some overlapped characteristics with the previous stage and predicted to take time 1 to 2 years.


Social Safety Net (3)• Next is stabilization, which also needs 1 to 2 years after the rescue stage. • The development stage will be started after that. These stages will be used

as a guideline in national development policies and regional development that has to consider the regional specific characteristics.

• The strategy that put more emphasis on rescue and recovery policies is known as the Social Safety Net (SSN).


Social Safety Net (4) The Social Safety Net is a policy that can be achieved by some activities

and interventions in order to raise the level of public economy. This policy is implemented through four programs or intervention area

such as 1. Food security program; 2. Employment creation program; 3. Social protection program; 4. Program for supporting small and medium enterprises.


Social Safety Net (5) Food security program is planned to guarantee food supply for people. Based on some cases in several regions, the government should consider

the food consumption diversification that follows the culture and regional characteristics.

This policy is hoped to be achieved through increasing the local food production. On the other hand, the distribution aspect should also carefully consider.

Employment creation program is planned to reduce unemployment and to establish sustainable productive activities after this program.


Social Safety Net (6) Social protection program is to maintain access to education and health

service facilities. In the health aspect, this program will provide assistance on drug

supplies to every Public Health Center (Puskesmas) and other health facilities.

The focus of this program in education aspects is to avoid the decreasing of children’s level of participation and to maintain level that has been achieved by the government program.

This program is implemented through reducing education fee from secondary school to university.


Social Safety Net (7) Public economy enhancement through development and support to

small and medium scale enterprises. Small and medium scale enterprises also include household‐based

business, and even businesses in small villages that have local cultural content.

This program is implemented through training, promotional aids and partnership.


Expectations from the Course (1)

A few decades ago Japan had a lot of similar characteristics with Indonesia nowadays; regional disparity between Central Japan and the other areas (such as Hokkaido, Tohoku, Kyushu and Okinawa) is similar to the disparity between the West and East in Indonesia.

As Indonesia, the agricultural sector in rural area was the primary sector in Japan economy.

Currently, Japan has successfully reduced its regional disparity and the industrial sector becomes the prime mover of the development, but the agricultural sector in rural areas was also well developed to support its development.



The economic crisis experienced in Indonesia hit most the industrial, service, and financial sectors that forced us to look back to the nature‐based economy which was "forgotten" in the last 20 to 30 years.

From the regional aspects, the industries and services mostly developed in urban areas in Jawa, while the potential of natural resources mainly exists in the outer islands, East Indonesia in particular.

The challenge for us now is how to change this crisis to be a "blessing in disguise" for the development of East Indonesia.



The other relevance of this seminar is the transition of public administration for regional development in Indonesia that will be more decentralized in the future.

Although the conception is still under development at this moment, it is good to learn how Japan does.

Finally, the course is expected to broaden and enrich my knowledge and experiences to support the development of Indonesia, particularly its eastern part.


どうもありがとうございましたどうもありがとうございました


Terima KasihTerima Kasih

the role of bappenas on overcoming indonesian national crisis

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