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	Table of Contents
p. 24 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 : V. ADB's Strategy

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E. Strengthening Government Capacity

219. This COS is firmly rooted in strengthening government capacity. The focus on governance reform includes target after target for institutional capacity building. In the same manner, each area of the indicative work program in the COS has explicit suggestions for capacity building:

1. strengthening the attorney general’s office to conduct anticorruption work;
2. building the capacity of both the Central Government and local governments to plan and implement decentralization;
3. enhancing local government capacity to provide more effective social services, social protection, and urban development;
4. improving the ability of local agriculture agencies to move away from blueprint project processes to utilizing more participatory mechanisms;
5. supporting effective regulation in financial sectors; and
6. improving governance and decentralization in managing environment and natural resources.

220. Much of the challenge is to move beyond project-oriented capacity building. One lesson from a number of sectors is that ADB’s capacity building TA has tended to concentrate on project management as opposed to policy development. This supports project administration, but not national program development. This problem is particularly important as, looking forward, the responsibility of government agencies becomes less administrative and more regulatory, more market-oriented and less directive.

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