Better basic services for Indonesia

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.