Media Center

News Release

Email this   printer friendly format

Decentralizing Indonesia's Health Services Ensures Wider Reach

MANILA, PHILIPPINES (14 December 2000) - Moves to decentralize Indonesia's health sector to better address local health needs were given impetus today with the approval by the Asian Development Bank of a loan of US$65 million.

The Decentralized Health Services Project will strengthen local capacity in health services delivery, including planning and management, and bring in key reforms while improving quality health and family planning services especially for the poor. It will target the provinces of Aceh, Bali, Bengkulu, Central Sulawesi, North Sulawesi, Riau and Southeast Sulawesi.

"This is strongly geared towards the vulnerable by giving priority to the poor's access to health services and linking public subsidies to the poor and the services they most utilize," explains ADB senior social sector specialist Jacques Jeugmans.

Currently, the health system relies on a highly centralized public sector, which has difficulties adapting to local needs and circumstances. This results in duplication, inefficiency, and waste as well as low-quality services. But a rapidly implemented decentralization may result in a breakdown of health services, which will most affect the poor who cannot afford private treatment. The project will assist in the transition to decentralization and improve service efficiency and quality.

In addition to the loan, ADB will provide US$1 million as a technical assistance grant from the Japan Special Fund to finance operations research, advocacy and studies to support health sector reforms.

The project will be implemented in phases from next year. The focus of the first phase will be on developing local capacity to plan, manage and deliver health services. The second phase will implement programs to address the priority needs of the poor and vulnerable groups.

The ADB will finance 80 percent of the total project cost of US$87 million during the first three years. The ADB loan will come from its concessional Asian Development Fund. Repayment will be over 32 years, including a grace period of eight years. Interest will be one- percent interest during the grace period and 1.5 percent thereafter. The executing agency for the project, which is scheduled for completion in March 2006, is the Ministry of Health and Social Welfare.

Contacts