Better basic services for Indonesia

Menno Pradhan Jakarta

Indonesia's citizens deserve better services. Many Indonesians lack access to basic services and this impacts human development outcome. Three percent of primary school age children, that is almost 900,000 children, do not go to school; 25 percent of births, that is almost 900,000 births per year, are not attended by a health professional; and 21 percent of households, that is about 11,6 million households, do not have access to drinking water from a closed well or pipe.

When services are delivered, they often lack quality. A recent survey revealed that 18 percent of teachers and 42 percent of doctors in public facilities are absent during operating hours.

The supply driven approach of providing services that has been applied in the last decades is not always appropriate for dealing with today's problems. Indonesia can claim remarkable achievements in service delivery. Child immunization against measles, through a centralized managed program of delivery, increased from 58 percent in 1991 to 72 percent in 2002.

This one-size-fits-all approach is however not appropriate to reach those who remain without access to services, such as the very poor, people living in remote areas and socially excluded groups. Improving quality of service requires more than replicating existing models. Now that the low hanging fruits are taken, new approaches for dealing with the remaining problems are called for.

What is needed is a system where providing good services is rewarded. The tailor made solutions that are needed will only arise if innovation is rewarded. The principle holds on many fronts. Central government needs to provide space for district governments that are successful in improving services, and closely monitor those that do not perform.

Local governments need to reward doctors, teachers, and regulators that excel, and give penalties to those who do not. But most of all, those who use these services need to be empowered to demand better services. There are structural issues that hinder implementation of this principle.

Civil service regulations on hiring, firing and promotions insufficiently allow for rewarding good performance. Since many services are managed or delivered by civil servants, this directly impacts service delivery. Civil servants are often not rewarded for serving clients well, and equally, face few consequences if they don't. Whereas those working in the private sector receive more clients and higher pay if they perform well, workers in the public sector lack such incentives.

Promotion within the civil service is too dependent on seniority and relations within the bureaucracy and too little on job qualification and satisfaction of clients. School principals, for instance, are key to innovation of teaching practices in schools.

But selection of a school principal is conditional on the number of years of service making it very difficult for young bright teachers to be promoted. As a result, innovators do not get into positions of power and the public delivery system performs below capacity.

Government financing of services provision is very complex making it difficult to hold service providers accountable. Good performance is the best available service given an available budget. If the budget is fuzzy, so it becomes hard to define performance.

An average government health clinic has eight sources of cash income and 34 operational budgets, many of which are provided in kind by central or local government. With so little autonomy to manage its operations, it is not clear who should be held accountable if services fail.

Similarly, pharmaceuticals for local clinics and salaries of teachers for public schools appear both on central and district government budgets, creating ambiguity over who is responsible for delivering these basic services. With such complexity, it becomes very hard for service providers and policy makers to plan, for the public to monitor and easy for corrupters to hide their tracks.

Public resources and policy are still very much oriented towards the public sector while many of the poor obtain services from the non-public institutions or through community provision.

In urban areas for instance, many of the poor obtain water from local vendors while in rural areas, community, or self- provision is the norm. A multi-provider strategy that builds upon the relative strengths of community, local entrepreneurs and the public sector is needed. Working with local entrepreneurs and communities is not the same as leaving it all to the market.

Public financing can be directly channeled directly to users, through for example vouchers or block grants to poor communities. Government needs to monitor service quality of private providers and prevent block grants channeled to communities being captured by local elites.

Sometimes a combination of public and private sector service delivery works best, where a public provider contracts locally with private providers to deliver services that stretch beyond its immediate reach.

Now is a good time to address these structural issues in service delivery. Reforms such as these take many years and are best initiated in the beginning period of a government administration.

Indonesia needs a healthy and educated population. Access to basic services is an intrinsic part of human welfare. The Government's commitment to tackle the issue has been encouraging. Hopefully the debate during the conference on making services work for poor people on April 27-28 in Jakarta will contribute to bringing better services to Indonesia.

Menno Pradhan is Senior Poverty Specialist at the World Bank Office in Jakarta and a fellow at the Amsterdam Institute of International Development. Before joining the World Bank, he was a researcher at Vrije Universiteit, Amsterdam.