Indonesia: Initiatives to Improve Transparency, Accountability and Public Participation at Local
Government
                                                                                                             94583
Last updated: Sept, 2009                                                                                   September 17, 2009

    Initiatives for Local Governance Reform (2005 - 2011)

                                                                   ARTICLE:
                                                                   - Story from Regency of Kebumen
                                                                   (Tempo, August 2009. pdf)
                                                                   - Story from Regency of Lebak (Tempo,
                                                                   August 2009. pdf)




                                                                   LEARN MORE:
                                                                   - Project Details
                                                                   - Project Documents
                                                                   - World Bank in Indonesia
                                                                   - Country Partnership Strategy




   Initiatives for Local Governance Reform (ILGRP) Project or Program Prakarsa Pembaruan
   Tata Pemerintahan Daerah (P2TPD) objective is to pilot support to district (kabupaten)
   governments in improving transparency, accountability and public participatory practices and in
   undertaking reforms in financial management and procurement.

   The project also provides incremental poverty targeted investment funds to kabupaten that
   complete a predefined set of the minimum reforms, which is used to finance priority rural
   infrastructure identified in the Poverty Reducation Strategy and Action Plans (PRSAP) that brings
   the cross-cutting reform elements together, including more pro-poor budget allocations.




   The ILGRP investment component uses two principles as the basis for investment financing linked
   to improvements in governance:

        The PRSAP, which is financed by the Regional Government Budget (APBD), provides the
        overall policy framework for kabupaten to reduce poverty. The ILGRP's investment funds
        provide only partial financing of the strategy.
        The ILGRP investment decision-making process is fully integrated into the regular kabupaten
        planning and budgeting system, with enhancement in transparency and participation.

   The financing of sub-projects provides an incentive for implementing governance
   improvements. The way in which the money is allocated, managed, used and monitored is a
   process through which local governments increase transparency, responsiveness, effectiveness,
   and accountability to their citizens. The project use provision of general facilitation, technical
assistance and capacity building.

This project is located in fourteen districts within nine provinces throughout Indonesia. The current
participating districts are Solok, Tanah Datar (West Sumatera), Lebak (Banten), Bandung (West
Java), Kebumen, Magelang (Central Java), Bantul (Yogyakarta), Ngawi, Lamongan (East Java),
Bulukumba, Gowa, Takalar (South Sulawesi), Boalemo (Gorontalo), and Bolaang Mongondow
(North Sulawesi).




Implementation of the governance reform program has been slower than initially
expected. However, recent progress has been promising and the project is in the process of being
restructured and extended, with the goal of consolidating and enhancing the improvements
achieved in the 14 current participating districts. All of the participating districts have completed the
first phase of reforms, and 11 of them have fully implemented phase two and are more than
halfway through phase three (final phase).

As a result of the reforms implemented, most kabupaten have achieved significant progress in
participatory planning, financial management, and procurement capacity. In general, kabupaten
have been able to complete substantially more investment subprojects than originally
planned. Subprojects implemented include road and bridge rehabilitation, irrigation canals, water
supply distribution systems, and school rehabilitation for post-earthquake reconstruction.




The total financing of this project is USD 46.2 million. The World Bank Group through International
Reconstruction and Development (IBRD) and International and Development Association (IDA) are
committing funds of USD 14.5 million and USD 15 million.

Other sources of financing also comes from UK Department for International Development with the
amount of USD 12 million. The rest of financing is from regional government budget (APBD) and
central government budget (APBN)




Following the project's restructuring and the two-year extension until September 2011, the
project provide additional rewards to the good performing districts, in the form of
additional investments. This will send a strong signal that good performance is rewarded.
It is estimated that at least nine performing districts will receive additional investment
funds. These funds are expected to be disbursed starting in mid-2010, and will be
additional to their already allocated third investment funds, which ranges from Rp. 4.5 – 9
Billion per district.