Australia Indonesia Partnership for Decentralisation (aipd) Delivery Strategy 2010 2015 Contents

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2.4Key stakeholders

The key stakeholders who can influence the more effective allocation and management of public resources (and thus improved service delivery) are profiled in Figure 3.

Figure 3 – Profile of key stakeholders

The following main points are worth highlighting:

Supply side

  • National government plays a critical role given its influence over allocating the bulk of financial resources available to P/LGs, its legislative and regulatory powers and the fact that it retains significant control over government staffing structures, numbers and performance incentives. Ministry of Home Affairs, BAPPENAS and the Ministry of Finance are the key central government agencies with respect to decision making on decentralisation and resource allocation issues.

  • Provincial governments have lost most of their direct authority over districts (although they have regained some), but nevertheless retain important support, capacity building and monitoring functions. They also retain close links to National Government (as de-concentrated agents of National Government).22

  • Districts have primary responsibility for the delivery of those key social services that can impact most directly on the welfare of citizens (and particularly the poor), namely health, education and infrastructure. The Bupati/Walikota, the Sekda (the most senior civil servant) and BAPPEDA are key players in coordinating resource allocation and management decisions at the district level.
  • Village government is where the ‘day to day’ concerns of village people are mostly addressed. Village governments access financial resources both from District and Provincial Government budgets as well as directly from nationally managed programs such as PNPM. However, they do not have any formal responsibility for managing the delivery of key public services.

  • ‘Other’ service providers include religious-based organisations. As previously noted, these cover a significant proportion of primary schools and/or madrasahs in the targeted provinces, as well as the provision of primary health care.

Demand side

  • Local parliaments have a key role to play on the ‘supply side’ of service delivery, but also on the ‘demand-side’ as the elected representatives of the people and given their role as a ‘watchdog’ over the activities of the executive. Parliamentary Secretariats are also a key stakeholder, given their important role in providing support services to parliamentary members, as well as providing a conduit for communication/information exchange with the executive and the public in general.

  • CSO/NGOs include a broad range of organisational ‘types’, including those advocating on governance reform issues, membership organisations (e.g. for women, farmers, small business, health workers, teachers, etc), professional associations, business organisations, universities and religious organisations. Such groups have a key role to play in helping governments to frame more effective policies, monitoring service delivery and lobbying/advocating for improvements.

  • The private sector depends on government to provide a supportive ‘enabling’ environment in which to do business, for example with respect to levies and taxes, issuance of business licences and regulations regarding environmental protection, occupational health and safety, etc. They can also have significant lobbying power, given the financial resources at their disposal.
  • A free (and effective) press/media is a cornerstone of a healthy democracy. It can provide independent scrutiny over the actions of government (politicians and public servants), influence public opinion, and deliver information to a mass audience. The press/media should therefore be seen as a key partner in promoting demand side pressures for improved service delivery and government accountability.

The role of AIPD

Figure 3 highlights the fact that AIPD is designed as a mechanism to support demand driven capacity building initiatives, working through the organisational structures and systems of both demand and supply-side stakeholders. It will not ‘directly’ or unilaterally undertake any activities, and will not set up new or parallel implementation structures. AIPD will also play a key role in ‘bridging’ communication gaps between key stakeholders, and helping to ‘broker’ differences in interests/perceptions (e.g. through providing support for evidence-based decision making and through facilitating dialogue).

AIPD will also support more coordinated and coherent GOA engagement at P/LG levels. This is described further below in section 2.5.1.

2.5Scope and coherence of donor support

Over the past decade, donors have started to change the way they do business in order to make their aid more effective.23 The Paris Declaration on Aid Effectiveness (2005) and the Accra Agenda for Action (2008) aim to increase aid effectiveness through promoting partner government ownership of the development agenda, aligning the management/allocation of aid monies with partner systems, enhancing country led coordination donor mechanisms, and strengthening mutual accountability for achieving development results. The Jakarta Commitment (2008) reflects a specific commitment by the GOI and donors to apply these principles in Indonesia. Progress is being made, but much remains to be done, with donor support efforts often still lacking adequate coherence and coordination.

2.5.1GOA policy and programs

The Australia Indonesia Country Strategy aims to strategically support sustainable poverty reduction in Indonesia. The goal is for the Governments of Indonesia and Australia to work in partnership to achieve a more prosperous, democratic and safe Indonesia by implementing Indonesia’s National Medium Term Development Plan. The Strategy’s key pillars are:

  • Pillar 1: Sustainable growth and economic management

  • Pillar 2: Investing in people

  • Pillar 3: Democracy, justice and good governance

  • Pillar 4: Safety and peace

The proposed AIPD delivery strategy focuses specifically on supporting Pillar 3, and in particular the objective of ‘improved local government and public financial management, responding to local demand’. It is also consistent with the principle of ‘investing in people’ and should indirectly contribute to sustainable growth and economic management at the local government level.

There is a particular imperative for AusAID to invest in strengthening P/LG capacities, as Australia’s substantial development assistance investments in Indonesia (including in health, education, infrastructure, and to the GOI’s own poverty reduction program PNPM) will increasingly rely on the ability of LGs to manage resources and implement policy.

AIPD will directly contribute to improved coordination and coherence of GOA investments at the LG level (particularly in the targeted provinces) through:

  • Supporting development of P/LG capacity to better allocate and manage resources from any source, including the coordination of donor investments.

  • The AIPD Program Director taking a proactive role in convening regular coordination/information sharing meetings with the managers and operational staff of other development programs working on improving LG service delivery in the four targeted provinces, such as ACCESS, AIBEP, AIPMNH and SADI 2.

  • Providing a source of lessons and guidance to AusAID on how it can better design and manage its ‘sectoral’ programs (primarily regarding who should be engaged and how), so they are supportive of decentralisation policies and local capacity building.

  • Helping to establish what the basic ‘parameters’ (or conditions) are for providing effective support to improved decentralised service delivery.

  • Supporting development of a common results framework for all AusAID programs working at the P/LG level (e.g. a set of ‘horizontal indicators’).

  • Providing a central point(s) of contact in the four targeted provinces (and targeted districts) for other AusAID sectoral programs (e.g. to link into/engage with P/LG governments in a more coordinated and coherent manner); and

  • Helping ensure provincial and district authorities in the four targeted provinces are better informed about AusAID’s overall program of support.

2.5.2Other agencies/donors

There have been, and still are, a large number of donor supported programs aimed at supporting decentralisation, good governance and improved service delivery. It is therefore imperative that AIPD assistance be delivered in close collaboration with these donor partners.

Key donor partners will include (but not be limited to):

  • The World Bank, which continues to play a key role in managing the Decentralisation Support Facility, as well as supporting various initiatives aimed at improving PFM (including PEAs and PFM assessments).

  • The Asian Development Bank, which is involved in financing the development and implementation of sustainable capacity building plans for local governments.

  • CIDA, which is supporting a program of incentives for LGs to improve service provision in Sulawesi, and have recently expressed interest in supporting the AIPD delivery strategy.

  • USAID which has been financing a Local Government Support Program.

  • GTZ, which has supported decentralisation initiatives both at the policy and implementation levels (including in NTT and NTB); and

  • The Asia Foundation (TAF), which has a long track record of supporting good governance initiatives in Indonesia, and has recently produced a draft document outlining its ‘Programming scenarios for the next phase of democratic local governance in Indonesia’ (July 2009). TAF’s proposed program strategy in many ways mirrors the AIPD strategy and, given their well established networks of local non-government partners, will themselves be a particularly important partner for AIPD to collaborate with.

The existing Decentralisation Support Facility (DSF) is also a key ‘player’ (initially established by five main donors, namely ADB, DfID, the Netherlands, UNDP and the World Bank, to support improved coordination and effectiveness of donor support to decentralisation).

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