'Government targets more ambitious than MDGs'

'Government targets more ambitious than MDGs'

Ministers from Asia Pacific countries are gathering here for
three days starting Wednesday to speed up progress toward the
achievement of the Millennium Development Goals (MDGs). The
Jakarta Post's Riyadi Suparno and Zakki P. Hakim talked to
State Minister of National Development Planning Sri Mulyani
Indrawati on Indonesia's part in the ministerial meeting.
Excerpts follow:

Question: How does our progress rate in meeting the MDGs?

Answer: The country's poverty alleviation programs in our Mid-
Term Development Plan are in line with seven of the eight goals.
In fact, the government's target is more ambitious compared to
those of the MDGs.

We have put quantitative targets on reducing poverty, infant
and maternity mortality rates, school attendance, gender and
environmental issues and job creation.

Our overall economy is improving, but we have had problems in
the last 10 months, such as the tsunamis in Aceh and the global
oil price increase that forced the government to raise fuel
prices ...

Basic services, such as health, education and basic
infrastructure, which should have been delegated to local
administrations (under the new regional autonomy law) have been
somewhat neglected.

The government is now quite aggressive about spending more on
programs related to the above basic services. Our expectation is
also to cover our development needs, as we have lagged behind in
the last few years due to the monetary crisis.

Critics say our MDG report is too aggregate in its coverage
and fails to address cases such as malnutrition and polio. How
would you, in the future, produce a report that shows regional-
based performance?

In general we are on track but Indonesia also has pockets of
poverty, which could be said to derive from our vast geographical
condition and our historical legacy of regional disparities.

This was made worse with the lack of infrastructure on other
islands and the loosening relationship (less hierarchical -- Ed.)
between national and local governments.

Nevertheless, to disaggregate our MDG report into a regional-
based report should not be a problem.

Now the governors have become quite competitive in providing
better and more accurate data and achieving the targets.

We need the most detailed as well as aggregate data, to be
able to monitor which intervention policies work and which don't.

Facing current cases such as avian flu, the polio outbreak and
malnutrition, how is the government overcoming these in order to
keep Indonesia on track in achieving the goals?

To be consistent with our commitment of decentralization, we
can apply a bridging mechanism for regions with relatively poor
performance where they would be responsible for the fund and the
central government would maintain a monitoring system.

Authorities have been delegated, but basic services (at the
local level) have not been up to par. Multilateral institutions
have thus been promoting (the concept) of the central government
coming up with a minimum basic services standard.

And if local administrations fail to meet the standard then
the central government may intervene, in the form of more funds
or other measures. However, the most immediate and easiest
solution is to disburse more deconcentration funds, with which we
could pursue more intervention policies.

Is there any penalty for local governments that fail to meet
the targets?

They wouldn't be reelected if they failed.

We used to pursue high growth hoping for a trickle down
effect, but today how would the government apply quality growth
that would reduce poverty, inequality and disparity?

Yes, we are now pursuing quality growth with equality ...

We're talking about disparity, not only between income groups
but also between regions, and quality ...

But today, we are facing growth with massive unemployment. So
people now identify that we need to implement exactly what
president Soeharto did, to invest in labor investment sectors
such as the manufacturing and agricultural sectors.

However, the focus then was on the expenditure side, while the
redistribution policy was neglected in terms of tax.

Now the revenue side is the tool to redistribute income; tax
improvement has been our priority. If we want to spend more for
the poor, we must collect more tax revenues and spend more for
projects affecting the poor or redistribute targeted subsidies.

Soeharto indeed succeeded in reducing the number of poor and
unemployment. But on the revenue side it did not work so well,
causing the disparity. We had less poor people but the rich
became far richer and were not taxed properly.

Now some fundamental laws have been changed that reduce the
government's degree of maneuverability. For one, we want to have
growth supported by labor-intensive activities, but our labor
policy has changed so much, becoming too populist. So we need to
work much harder to have growth with labor-intensive activities.

In the Soeharto era, the government got its resources from
debts, so there was no need for higher taxes and no public
accountability; the only problem was "leakage". But back then,
they succeeded in coming up with real results.

Now we still have leakage and there are less debt resources,
and if there are any, lenders now are far more demanding. So we
must rely more on our own resources.

Does this ministerial meeting have a particular target?

The international political target would be to produce the
"Jakarta Declaration" to unify and strengthen the voice of the
Asia Pacific on MDG achievements and financing for development.