House OKs law on economic planning

Dadan Wijaksana, The Jakarta Post/Jakarta

A law on national development planning was endorsed at a plenary session of the House of Representatives on Tuesday, outlining the role of the National Development Planning Agency (Bappenas) in formulating the nation's economic development programs.

Under the law, a draft of which was initiated by the House Commission IX on financial affairs, Bappenas will have an active role in drawing up the economic development planning for one, five and 10-year periods.

State Minister for Development Planning and Bappenas chairman Kwik Kian Gie told legislators the law was crucial as the State Policy Guidelines (locally known as GBHN) made no mention of Bappenas' role and the wider authority of regional governments under the Regional Autonomy Law.

The new law would allow Bappenas to formulate guidelines for the president before the government set out its economic agenda.

The range of powers gained by the regions under regional autonomy meant there was a need for tighter coordination and regulations to harmonize development programs -- be it on a national, regional, or inter-regional level, Kwik said.

The one-year economic plan will now be the main guide to the creation of the annual state budget, dissipating concerns that Bappenas would no longer have a say in the budget following the enactment of the State Finance Law last year.

The law had created uncertainty over the fate of the once- powerful Bappenas, as it gives the Ministry of Finance almost total control over the drafting of the annual budget.

The national development planning law obliges Bappenas to actively participate in the drawing up of macroeconomic targets, yearly state budget figures, the five-yearly national development program (to replace the abolished "Propenas" program usually written by Bappenas), and the 20-year program -- the country's long-term economic road map.

Regulations to coordinate Bappenas and Ministry of Finance in these tasks would soon be issued, so as to avoid overlap or confusion in implementation.

Established more than 40 years ago, Bappenas during the administration of president Soeharto was extremely powerful, with all key development projects having to pass through the office for approval.