Returning power to development planners

Owen Podger, Jakarta

One of the last deeds of the House of Representatives (DPR) for the 1999-2004 period was to pass Law 25/2004 on the national system of development planning. While this is not the return of the new order, it is a return to national development planning of the wrong order altogether. The new planning system however works against international trends in national planning. It contrasts with Law 17/2003 on state finances which is close to state of the art.

The purpose of long term planning should not be to constrain a President Susilo Bambang Yudhoyono's reforms plan.

Long term planning should be to determine what policy and action is needed now -- not in the long term -- to avoid undesirable future scenarios. Long term planners uses science to help politicians determine priorities on specific complex issues.

Bappenas (National Development Planning Agency) has already drafted a long term plan. But this draft plan has no projection of population growth, no projection of land needed for food crops to feed future generations, and no projection of urbanization or projection of how much irrigated land will need to be converted to urban uses. There is no mention of the greenhouse effect.

The purpose of medium term planning should not be to spend just three months in every five years preparing strategic plans -- or limit ministers to less than two months to finish their strategic plans. And why should we call a strategic plan a development plan? Is the current title of Bappenas so important? Why not forget the old term development planning, and have strategic planning that will look at every aspect of planning needed to perform? Not just development, but also human resources, outsourcing and insourcing, alternative financing, risk, application of technology.

And why not make Bappenas into a strategic institution, that helps the President? Which is more important, a new law which hinders the President in being strategic in running the country, or using all that expertise in Bappenas to help a new President fulfill his promises to the people?

Bappenas has also already drafted a medium term plan. It is terrible. It plans a reduction in the share of funds for regions, for government investment, and even for civil servant salaries. It plans a 10 percent budget surplus for 2009. But the sectoral plans show no less responsibility of regions, no frugality in investment, and no plan to cut salaries or staff. There is no connection between the opposite sides of the balance sheet. This is not a plan, but a dream. From cover to cover there is no strategy.

Modern medium term planning focuses on continual improvement. The starting point of medium term planning should be the President's own strategy, that will evolve throughout his presidency, demanding each minister's plan also to push the limits of corporate performance. If Bappenas is given the job to help elucidate his policy, that is a wise application of his prerogative, provided that responsibility for the development of planning in each sector is handed over to the ministers who are responsible.

Each minister needs his or her own time to develop detailed strategies and policies. Two months for strategic planning are ridiculous.

For example, the law on the national system of education is over a year old, and the ministry has still not announced how finances are to be shared between the three levels of government. It is a complex issue that the new minister will not be able to resolve within two months, and maybe not for another year.

A strategic plan allows time to develop policy. This new law, by not giving time, is not strategic, and compliance with it will result in bad plans, and bad performance.

In strategic planning, development planning is not separated from other policy. The minister for education, for example, should have not have half his policy in education legislation and the other half in a separate piece of legislation. All education policy, beneath the guiding strategy of the President, should be stipulated in education legislation.

There is no need for Bappenas to coordinate planning. Ministers should do their own coordination, and should be held accountable for it. Bappenas would be more successful in achieving coordination for the President if it gave advice to the President when sectoral ministers fail to perform.

For example, the minister for education should be responsible for integrating education policy with the policies of related industries, isolated regions, agriculture, and so on, negotiating with those ministries as required to continually improve effectiveness and efficiency.

Each minister should also be responsible for assuring that his or her policies are acceptable to stakeholders. This requires far more than holding one multi-sector mass gathering of stakeholders in a national planning conference once every five years. It requires packaging of concepts into public announcements, consultations across the country over time, research into user needs, professional policy impact assessments, on a continual basis so that the minister always knows how his policies respond to community needs.

The third type of plan in the new planning law are the annual development plans. These are prepared before the annual budget process starts. No argument is provided why the Medium Term Expenditure Framework used successfully in so many other countries and adopted in Law 17/2003 cannot work on its own in Indonesia. In other countries, the type of annual planning in this law is just not needed. What is needed is a statement by the government on general policy linked to the budget of each ministry. This is already covered by Law 17/2003 on state finances, which calls for such a policy to be agreed with the House and the Council of Regional Representatives (DPD).

The driving force of change is the process of continual performance review. This process starts with every public official reviewing his or her own performance. This will lead to program reviews to update strategic plans. Cabinet reviews will keep the President's strategy on target. And at the top of the review process, the House and DPD reviews will lead to better budgets and better performance. This happens at least once a year. And nothing less is good planning.

The new minister of planning hopefully will recognize that behind this dreadful display of ignorance of good planning, Bappenas is still a national treasure of brilliant people, and should not be judged by this law.

The writer is a free-lance consultant on governance reform, and co-author of ADB's Country Governance Assessment Report of the Republic of Indonesia. He can be contacted at micah68@centrin.net.id