Sustainable infrastructure development

Sustainable infrastructure development

Giovanni Comparini, Jakarta

I have followed very closely the 100-day program of the
Indonesian government to find solutions to infrastructure
development, the importance of which has become even more topical
after the floods, which paralyzed Jakarta just a day after the
Infrastructure Summit's end. From the renowned guests' speeches
and significant articles/excerpts in The Jakarta Post, it clearly
emerges that this important and laudable initiative of Indonesian
central government is aimed at filling the huge gap between the
funds made available by the state budget and lenders, and those
necessary to finance the five-year development plan of basic
infrastructure.

To achieve this important objective, Indonesia central
government has promised to speed up regulatory reforms, and to
propose investment opportunities to the private sector,
particularly foreign investors. While this move seems to be
realistic and appropriate, there are certain aspects of the
private sector participation that merit careful analysis.

The effectiveness of the huge financial resources allotted to
any development plan will depend on many interrelated factors --
particularly the way the various projects are managed and
coordinated at central and local level by the involved
governmental institutions. Their management capability,
organization arrangement, human resources' know-how and
behavioral characteristics will play a fundamental role in the
initiative's final success.

This means, in other words, that the expected economic growth
of 6 percent cannot be considered a certainty. This target might
be reached and even exceeded, or it might be missed, based on
this institutional performance. A key-factor that will determine
the initiative's success or failure might be what is called the
"institutional culture" of the participating governmental
organizations, and the complex of internal rules, expressed or
not, which determine the actual way an institution functions and
performs. As a matter of fact, many project assessments have
shown that a gap between the "institutional culture", and the
culture implicit in the objectives/targets pursued, results in a
project failure.

At present, the "institutional culture" of Indonesian public
administration is often questioned, and the most questioned
aspects concern issues such as policy and legal uncertainty,
corruption and nepotism, and a general lack of good governance,
transparency and accountability. However, the present system,
like all established and consolidated systems, is reluctant to
change, and needs new incentives and pressures, which cannot be
found inside the system itself.

There is a clear need for new forces, able to induce the
system to move from the current paradigmatic positions, to those
of a system more transparent, flexible, and closely connected
with civil society. Local communities and the private sector
could act as the new stakeholders, able to activate this cultural
change.

With this purpose, the new partners could become active and
an integrating part of a renewed system for public infrastructure
management, which might replace the present monopolistic system,
and allow a more effective and fair service delivery. The private
sector, in particular, should act as a responsible and far-
sighted partner, going beyond what is the current stereotype of
the role of the business world.

This need of a more participative approach in public
infrastructure management has been concisely but very clearly
expressed during the Summit, in the presentation by the World
Bank Vice-President for East Asia and the Pacific, concerning a
reform in the process for supplying public services. The proposed
process introduces a Consultative Council, consisting of local
community and local institution representatives, which are
expected to act as mediators between civil society's requirements
and aspirations, and governmental policies and positions. As a
result, we can conclude that a new flexible and progressive
system needs to be institutionalized quickly, with the active
participation of the three stakeholders in the overall service
delivery process.

Therefore, an urgent question to be answered is how this
important institutional change can be supported and accelerated.
It is clear that a similar paradigmatic change cannot come only
from one side, but needs the collaboration and commitment of the
three involved parties: Government administration, local
communities, and the private sector.

A realistic path foresees a long collaboration between these
three partners, which would result in a progressive integration
of Indonesian civil society with the government administration.
Public and private sectors in particular, should start a long
process of collaboration, which would cover not only technical
and financial aspects, but also management capability, knowledge
sharing/dissemination, and other "soft"/behavioral matters.

If adopted, this collaboration should result in participation
schemes able to foster a process of progressive sharing,
integration and development.

A Build, Operate and Transfer (BOT) scheme could be
appropriate, if combined during the two preliminary steps (build
and operate) with institutional development. This long process,
if consistently implemented, would result in a progressive change
and development of the institutional frame and culture of
Indonesia's government administration, which manages service
infrastructure. Finally, through the effect of induction, these
paradigmatic changes would spread throughout all levels of
Indonesia's government -- central, provincial and local
government.

The writer is a member of the Italian Business Association in
Indonesia. He has a wealth of experience in Indonesia in the
field of institutional development and urban infrastructure
management. He can be reached at compa@bogor.wasantara.net.id.