What's wrong with RI's development planners?

What's wrong with RI's development planners?

Budhi Santoso, Jakarta

The Indonesian economic crisis of 1998 provoked a number of
practitioners and critics to review national development planning
systems that had been implemented for 30 years during the New
Order era.

Simple questions were raised: What has the planning institute
been doing to allow such a severe crisis to occur?

Some arguments have centered around theoretical debates
between centralistic and decentralistic approaches in the
implementation of national development programs.

It is argued that the centralistic method of development
planning tends to locate planning in the hands of the state and
technocrats, where growth is more important than equity.

As part of the economic development reform agenda, there are
some changes in the system of planning and the budgeting of
national development program that previously centered on sector
departments in Jakarta transferred to regions. The legalization
of this reform was been stipulated in Law No. 33/2004 on
budgetary matters and Law No. 32/ 2004 on regional
administrations.

Considering that the national and centralized development
system is regarded as old fashioned and out of date, the system
was replaced by the medium term expenditure term model (MTEF),
which was adopted in Law No. 17/2004 on state finance.

However, taking into consideration that the country needs
guidelines to adopt President Susilo Bambang Yudhoyono's vision
and mission in a national medium term development planning
program, the House of Representative enacted Law No. 25/2004 on
the National Development Planning System.

The House probably thought that Law No. 17/2004 did not
specify guidelines for the future of the country, but rather how
much money would be spent over a period of time.

Owen Podger wrote in this newspaper that the passing of Law
No. 25/2004 was a backward decision and against international
trends in national planning. He cited Law No. 17/2004 as the
correct way of planning. It is a pity that Podger did not mention
how many countries have successfully adopted the method and how
many countries were unsuccessful.

This opinion does not intend to respond to the criticism
raised by Podger to the National Development Planning Board
(Bappenas) who's existence is supported by Law No. 25/2004.
However, some interesting issues are worth raising.

First, we should agree that planning without budgeting is only
a dream. Budgeting without planning will result in wasteful
spending or widening the possibility of corruption by government
officers.

Good and correct planning will direct us where to go in the
future. It should have a clear vision and mission both in the
medium and long term. Planning of national development for the
sake of short term need results in unpredictability.

One can imagine a passenger on a plane intending to go to
Bali, but when the plane has landed he realizes that he is in
Manado. Law No. 25/2004 is not designed to allow exclusive
planning without adopting the elected president's vision and
mission. All of this should be written in an integrated planning
and budgeting document in conformity with the country's long term
goal.

The second issue is about coordination. Departments should be
given autonomy to coordinate their sectoral development plans.
Bappenas will not act as a super agency who pretends to know and
control everything.

Budgeting functions (budgeting power) is no longer Bappenas'
responsibility. Bappenas no longer coordinates how departments
formulate their own sector development program, but when there is
a program which in its implementation is the responsibility of
more than one ministry, a kind of planning coordination is
absolutely necessary so that there will not be duplication or
lack of synchronization.

The government has now adopted a development budget
administration process using a performance basis in which
Bappenas is only involved in planning, monitoring and the annual
evaluation. The task and function of planning and budgeting of
sector development is conducted by each department, the Ministry
of Finance and House of Representatives.

The problem of how to achieve significant economic growth
every year is merely a choice of either using the centralistic or
decentralistic approach.

As part of the reform agenda, the government has decided to
implement a decentralistic approach that is to involve as much as
possible regional governments and civil society in formulating
development plans and its budgeting so that economic recovery can
be achieved without ignoring the end users.

As we know Indonesia prior to the crisis was one of the seven
emerging Asia Pacific countries lead by Japan to have
continuously high economic growth and reducing poverty at the
same time for more than 25 years.

By making detailed observations of the root of the problem
that caused the Indonesian economic crash we can hopefully better
identify between causes in the public or financial sector.

We should also ask ourselves whether it is wise to blame
development planners in Bappenas while we know that by early 1998
the key decisions were in the hands of economic cabinet ministers
who were actually not economists?

It should also be understood that the country's economy does
not only depend on the public sector but also the private sector
which has a much bigger role in the national economy.

The judgment thus should not be based on how development
planning was formulated and implemented, but also what the
results were?

Finally, the importance of planning coordination is signified
in the ability to the government to secure a strategy which can
be adopted by all departments. Some departments, until today,
still implement a centralistic approach, a methodology closer to
the project approach (for multi sector projects) rather than a
programs approach.

There are many reasons behind this, but basically by
centralizing the program, this means budgeting power remains in
the hands of the department.

When you have budgetary power you can spend the money as you
like, and you can save some of it for your own pocket. This is
another reason why planning coordination is important, among
others, to give direction to departments to consistently
implement a new paradigm of development.

The writer is head of the irrigation sub-directorate at
Bappenas. The opinion's expressed here does not represent
Bappenas' view.