The Role of Bappenas on Overcoming Indonesian National Crisis

The Role of Bappenas on Overcoming Indonesian
National Crisis

Dadang Solihin

Country Report
For the Regional Development Planning Course
Sapporo, Hokkaido March 30, 1999

dadang-solihin.blogspot.com 2

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).


Sub‐Division for Provincial
Development Assistance

Sub‐Division for District &
Rural Development
Assistance

Division for

Eastern Region I
Sub‐Division for Area Development of
Development Program

Sub‐Division for Regional
Development II
II
Bureau for

Regional
Division for

Sub‐Division for Data &
Development II

Information
Regional Development

dadang-solihin.blogspot.com Sub‐Division for Provincial
Development Assistance

Sub‐Division for District &
Rural Development
Assistance
Division for

Eastern Region II
Development of

Sub‐Division for Area
Development Program
9
Organization Chart of Bureau for Regional Development II

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.


 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.


 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.


 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.


 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 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)
Rescue  There are four strategic stages of
Recovery development planning determined by
Stabilization the Government in order to solve the
5
Development
problems, to fulfill the urgent, realistic,
and operational needs, and to avoid
the people social and economic
0
98/99 99/00 00/01 01/02 02/03 03/04 condition to become worse.

-5

-10

-15


 The first stage is rescue mission 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.


• 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).


 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.


 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 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.


 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

Terima Kasih


The Role of Bappenas on Overcoming Indonesian National Crisis

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