Catalog

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p. 19 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 IV. ADB's Development Experience V. ADB's Strategy A. Thematic Priorities B. Regional Cooperation C. Indicative Levels and Nonlending Activities D. Participation of Civil Society and Local Governments E. Strengthening Government Capacity VI. Risks, Performance, and Monitoring

Country Operational Strategy Studies - Indonesia

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V. ADB's Strategy

121. The vision guiding ADB’s proposed COS is a soundly governed Indonesia with an economy that operates in an environmentally sustainable, equitable fashion to reduce poverty. Reflecting developmental needs and emerging social and economic conditions, reducing poverty and regional inequity are proposed as the central objectives of the COS. To meet these objectives it will be necessary to improve governance, the main anchor of this 3-5 year strategy. Following poverty analysis, the objectives of the COS are to be met through an integrated program of projects concentrating on five focal points.

1. Creating basic institutions and strengthening them by improving the many relevant dimensions of governance.
2. Supporting sustainable recovery and pro-poor growth by enabling and encouraging private sector development. In addition to enhancing the still-tentative recovery and investing in the potential for long-term growth, this will demand focusing our support on infrastructure, continuing ADB’s lead efforts in strengthening the financial sector, supporting competition and SMEs, and promoting good corporate governance.
3. Improving regional equity through balanced regional development, especially targeting more directly the rural areas and less developed islands or areas. Meeting this goal will demand a wide range of actions, including enhancing urban development and transport systems.
4. Human and social development: investing in and improving education, health, and social protection; and enhancing the role of women.
5. Mainstreaming environment management to ensure sustainable use of natural resources and prevention of adverse environmental impacts associated with the development process.

122. As noted, the objectives and strategic priorities of the COS are based on ADB’s poverty assessment for Indonesia, the Government’s planning directions, particularly as expressed in PROPENAS, and the broader analysis of the economy. The outlines of ADB’s COS and PROPENAS are particularly close (compare Box 2 and para. 75). The framework in Box 2 is also consistent with the main elements of most other aid agency’s efforts (para. 90). Social and economic development is, however, not a static target. Dynamically shifting fields of operations, reflecting institutional development and evolving public priorities, demand constant reexamination. The strategy must be implemented through project design and administration conducted in a strongly participatory manner, with a wide range of stakeholders constructively engaged. This demands commitment of ADB staff resources, innovation, better external communication, and, in some cases, flexible business practices.

123. The emphasis on poverty reduction in the COS demands that ADB target operations directly and indirectly at the poor. The allied goal of supporting more balanced regional development will provide geographic guidelines for ADB operations, toward less developed areas and islands and rural regions. The COS proposes a decentralized pro-poor and "bottom up" approach to future development. As the discussion makes clear, decentralization is a crucial conditioning element in nearly all ADB activities over the envisioned time horizon.

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