Catalog

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p. 11 of 27 BACK | NEXT Executive Summary I. Background II. The Government's Development Priorities and Outlook III. Strategies and Programs of Other International Funding Agencies A. Coordination Mechanisms and Forums B. Strategies of Major Aid Agencies C. Implications for ADB’s Program of Assistance IV. ADB's Development Experience V. ADB's Strategy VI. Risks, Performance, and Monitoring

Country Operational Strategy Studies - Indonesia : III. Strategies and Programs of Other International Funding Agencies

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A. Coordination Mechanisms and Forums

86. Total official development assistance (ODA) commitments to Indonesia were $7.2 billion in FY1998/99, $5.9 billion in FY1999/2000, and $4.7 billion in the nine-month FY2000. Effective aid coordination is essential, given the large number of multilateral and bilateral agencies active in Indonesia. IMF, World Bank, and ADB are the three largest multilateral financial institutions. Significant bilateral sources include Australia, Germany, Japan, and the United States. The principal coordination mechanism is the meetings of the Consultative Group for Indonesia (CGI). The tenth CGI Meeting was held in Tokyo in October 2000. The aid agencies stressed the need for macroeconomic stability, deepening structural reforms, a sound antipoverty strategy, improving governance, and smoothly implementing the decentralization agenda. The agencies pledged to disburse up to $4.8 billion in FY2001.

87. Other forms of aid coordination are regular meetings by local representatives of agencies in Jakarta and special forums to address specific macro and sectoral policy issues. As part of the aid-supported economic reform and recovery program, ADB has been taking the lead in coordinating assistance in corporate governance. The World Bank has taken the lead in coordinating assistance in strengthening social safety net programs. Major aid agencies including ADB, World Bank, and Japan Bank for International Cooperation (JBIC) have collaborated to undertake joint country portfolio reviews and to address common implementation issues.

88. The recent creation of a Partnership for Governance Reform, sponsored jointly by ADB, World Bank, and UNDP, represents an innovative structure for focusing the international community’s efforts. Among the basic elements are:

• a trust fund for activities that are best supported from a multilateral basis, either because of their sensitive nature or because of the size or complexity;
• a Board of Governors composed of Indonesian nationals from Government and civil society as well as representatives from the international community; and
• a secretariat to provide “real time” support to the Government.

89. The adoption of this institutional arrangement for coordinating assistance carries some risk. In particular, the development of an institutional bureaucracy can force activities into an aid-driven, aid-determined mold without sufficient local ownership. Recent moves by the partnership to ensure local leadership are a mitigating measure.

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