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ASIAN DEVELOPMENT BANK
COUNTRY STRATEGY AND PROGRAM UPDATE
(2002–2004)
INDONESIA
July 2001
CURRENCY EQUIVALENTS(as of 16 July 2001)
Currency Unit – Rupiah (Rp)Rp1.00 = 0.000088$1.00 = Rp11,360
ABBREVIATIONS
ACCSF – Asian Currency Crisis Support FacilityADB – Asian Development BankADF – Asian Development FundASEAN – Association of Southeast Asian NationsBAPPENAS – Badan Perencanaan Pembangunan Nasional
(National Development Planning Agency)BIMP–EAGA – Brunei Darussalam-Indonesia-Malaysia and
Philippines East ASEAN Growth AreaCDM – clean development mechanismCGI – Consultative Group for IndonesiaCOS – country operational strategyCPM – country programming missionCPRM – country portfolio review missionESW – economic and sector workFGRSDP – Financial Governance Reforms Sector
Development ProgramGDP – gross domestic productHDI – human development indexICSMEDP – Industrial Competitiveness and Small and Medium
Enterprises Development ProgramIMF – International Monetary FundIMF–EFF – IMF Extended Fund FacilityIMT–GT – Indonesia-Malaysia-Thailand Growth TriangleJBIC – Japan Bank for International CooperationNGO – nongovernment organizationOCR – Ordinary Capital ResourcesPPA – poverty partnership agreementPPTA – project preparatory technical assistancePROPENAS – Program Pembangunan Nasional
(National Development Plan)PSG – Private Sector GroupRETA – regional technical assistanceSME – small- and medium-scale enterpriseSOE – state-owned enterpriseSUSENAS – Survei Sosial Ekonomi Nasional
(National Socioeconomic Survey)TA – technical assistanceUNDP – United Nations Development Programme
NOTES
(i) The fiscal year (FY) of the Government ends on 31 December.(ii) In this report, "$" refers to US dollars.
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CONTENTS
Page
I. Development Situation 1
A. Recent Political and Social Developments 1
B. Economic Assessment and Outlook 1
C. Implications for the Country Strategy and Program 1
II. Implementation of the Country Strategy and Program 2
A. Poverty Reduction 2
B. Thematic Priorities in Country Strategy 2
C. Private Sector Development 6
D. Subregional Cooperation 6
III. Portfolio Management Issues 7
A. Portfolio Performance 7
B. Counterpart Funding 7
C. Monitoring and Evaluation 8
IV. Country Performance and Lending Levels 8
A. Performance Indicators 8
B. Lending Level Proposed 8
C. Loan Program 9
D. Technical Assistance and Economic and Sector Work Program 9
E. Summary of Changes 9
APPENDIXES 10
I. DEVELOPMENT SITUATION
A. Recent Political and Social Developments
1. Although the first half of the year was affected by political uncertainties, caused by thedeteriorating relations between the ex-President and Parliament, the appointment of a newPresident in late July 2001 created expectations of an improvement in the general political andeconomic environment. Political violence exists in many areas, especially the Moluccas, CentralKalimantan, West Timor, Irian Jaya, Aceh, Jakarta, and East Java. The Government estimatesthat the civil disturbance created over 1 million internal refugees. The situation is a barrier todevelopment and discourages investment. The Government has started a wide-ranging processof decentralization, transferring major administrative and fiscal responsibilities to localgovernments, largely to the districts. While much of the initial changeover has gone relativelysmoothly, the process faces challenges, including how to channel foreign aid to local levels.
B. Economic Assessment and Outlook
2. This year’s growth will likely be 3–3.5 percent, less than 2000’s 4.8 percent. First quartergross domestic product (GDP) growth was only 2.6 percent. Exports, strong in 2000, will faceweaker markets. Private investment is unlikely to recover, and public sector spending isconstrained by the large public sector debt, falling world oil and gas prices, a depreciatingcurrency, and higher domestic interest rates. A serious budgetary shortfall and differences overthe Central Bank Law have delayed agreement with the International Monetary Fund on therelease of the latest tranche from the Extended Fund Facility, putting at risk the Paris Clubagreement and heightening investor concerns. Addressing this will be amongst the first tasks ofthe new administration.
3. The failure of real wages to rise suggests that poverty reduction, which began as thecrisis ended, has not continued. Yet, Indonesia has a relatively flexible labor market and sawaggregate employment increase by 2 percent in 2000 over 1999. Inflation, however, continuesto rise at roughly 1 percent per month, considerably higher than the 5–7 percent annual targetlevels, due to the rupiah’s renewed weakness and higher fuel and electricity costs resulting fromreduction of subsidies. Higher energy tariffs are likely to push prices up further.
C. Implications for the Country Strategy and Program
4. The weakening of the recovery process and the Government’s ongoing fiscal difficultiesimply that protecting poverty gains, and providing for sustainable recovery will remain majorchallenges. In the current context, this likely translates into a continued need for budgetarysupport through program lending. However, the gridlock between Parliament and the Presidenthad stalled reforms, including in areas of particular importance to the Asian Development Bank(ADB), such as power, transport, the financial sector, and small and medium-size enterprises(SMEs), and constrained private sector development, especially foreign investment. ADB mustbe flexible in its support of reform but also aware of the country’s political and economicweaknesses. The program must emphasize poverty reduction. Decentralization provides anopportunity to support ongoing reforms. The challenge is to build capacity in a sustainablefashion and in coordination with the international community. Political uncertainty, policy drift,and implementation problems associated with decentralization will obstruct the program andlikely introduce considerable variability in the annual lending levels for the next few years.
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II. IMPLEMENTATION OF THE COUNTRY STRATEGY AND PROGRAM
A. Poverty Reduction
5. Poverty incidence was last estimated in August 1999 at 18.2 percent. Since then, theimpact of recovery on poverty was affected by various influences such as rising inflation and itsimpact on real wages; aggregate employment growth, encouraged by modest GDP growth; andavailability and disposition of public resources. Decentralization could also greatly reducepoverty by bringing governance nearer to the people; participatory methods would allow thepeople to make their needs known and help the Government address them.
6. The Government entered into the Poverty Partnership Agreement (PPA) with ADB on 4April 2001. An important action mentioned in the PPA that has been fulfilled is the formalestablishment of the Poverty Reduction Coordination Agency, which intends to involve the poorand local governments in developing a new strategy. The PPA provides for a review of themedium-term targets and long-term objectives of the agency’s poverty reduction strategy.
7. The program emphasizes poverty reduction. Projects categorized as either core povertyinterventions or poverty interventions constitute 50 percent by number and 54 percent byamount in the 2002-2004 program. The program’s strategy for poverty reduction is to (i) help theGovernment accelerate a pro-jobs pro-poor economic recovery, (ii) provide basic services in thedecentralized environment, and (iii) aid the process of decentralization. ADB is also developinga geographical focus in country operations to increase the impact of ADB’s operations inIndonesia. Sharper targeting of poor areas and better synergies arising from complementaryproject investments will allow the Government to reduce poverty and attain other strategicdevelopment goals more efficiently. The geographical focus is being prepared and will beimplemented gradually beginning in 2002.
B. Thematic Priorities in Country Strategy
1. Good Governance
8. Reforms, particularly in the judiciary, civil service, and corporate governance will provethe seriousness of the Government’s intent. However, while progress in improving governanceand combating corruption continues at the policy level, implementation is slow, and politicaluncertainty is likely to exacerbate delays.
9. A governance study for Indonesia is scheduled for 2001. The study is expected to takestock of ADB efforts and develop new initiatives. ADB is striving to raise its profile within theGovernance Partnership, of which it is a founding member, and actively support activities in linewith the Country Operational Strategy (COS). The partnership is a good conduit for ADBinvolvement in projects that are too large, diverse, or contentious for a single funder toundertake. For example, the partnership is launching several new initiatives, including extensionof activities to the regional level, which will include support for regional offices of theOmbudsman and Human Rights Commission, and work on police reform.
10. The forward program will support governance reform, with interventions mainstreamedinto all areas of COS focus. The program stresses decentralization and treats it separately(para. 20). Integral to ADB’s support for the corporate and financial sectors is promoting goodgovernance in them (para. 11). The ADB program also supports anticorruption activities, legaland judicial reforms, and civil society. Anticorruption initiatives include (i) support for auditreform, particularly in the context of decentralization; (ii) continued support for improvingprocurement; (iii) support for the attorney-general’s office; and (iv) effective anticorruption efforts
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in ADB’s own projects. ADB will also support the World Bank/ADB Country FinancialAccountability Assessment. In legal and judicial reform, apart from legislation in critical sectors,an important need is access of the poor to legal services and right to fair treatment under thejudicial system. To strengthen ADB’s constructive relationship with the Non-GovernmentOrganization (NGO) community and to develop more participatory processes in ADB’soperations, ADB’s Indonesia Resident Mission is strengthening its linkages with civil society byestablishing a consultative group of NGOs. An important area of partnership with NGOs is theoversight of ADB projects.
2. Economic Growth - Encouraging Sustainable Recovery
11. Economic structural weaknesses slow down recovery and threaten long-term growth,and program loan support depends upon the success of much-delayed reforms. A program loancluster to develop the nonbank financial sector and capital markets and to improve theirgovernance practices has thus been scheduled for 2001 and 2002. Technical Assistance (TA) toincrease competition in the financial and industrial sectors has also been programmed. A projectis planned to give SMEs financial, nonfinancial, and infrastructure support. Economic andSector Work (ESW) to develop strategies for corporate governance and SME development, andpension and insurance reform is also planned.
12. Delays in infrastructure reforms seriously affect private investment, particularly inenergy. ADB urged the Government to pass the Electricity Bill within 2001 as it is important tothe ADB-supported reform program. Should progress in reforms be made, ADB will helpconsolidate the restructuring process through program and project lending and address thetransmission needs of the geographically focused area. Better energy use for rural developmentwill be explored through ESW. Two projects are programmed to rehabilitate national and localroads and build new local roads. Local road development and more effective interislandtransport links are major challenges in the decentralized context. Strategies to handle thesechallenges will be explored through ESW. To encourage private sector participation ininfrastructure, the Government is employing TA in three priority areas: (i) establishing a watersupply regulatory authority; (ii) developing a law for private sector participation in infrastructure;and (iii) establishing a national infrastructure information center. ESW to explore private sectorparticipation in transport is also planned, and a TA loan for Local Government InfrastructureDevelopment Facility is programmed for 2003 to enable local governments to prepare feasibilitystudies for Build-Operate-Transfer type projects.
13. Project preparatory TA support to develop technical and vocational skills for globalizationand advisory TA support for an information technology development strategy, are planned.
3. Human and Social Development
a. Health, Education and Social Protection
14. Emergency social protection programs implemented during the crisis period haveprotected the most vulnerable (children under five, pregnant and lactating women, and junior-secondary students). The 2000 National Socioeconomic Survey (SUSENAS) shows that morechildren are in junior secondary school than in 1999, more mothers and children are usingintegrated health posts, and more women use trained midwives and doctors to give birth. Thus,focused safety-net programs appear to be doing well.
15. Budgetary difficulties, however, impact on social service delivery, and nutrition levels areparticularly low. Basic service provision must be monitored for signs of disruption caused bydecentralization. The 2000 SUSENAS also indicates a decline in the net enrollment in
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elementary education and a significant decrease in the use of public health centers, perhapsdue to poor quality, in favor of doctors and hospitals.
16. The regional dimensions of these changes need to be explored and weak localgovernments supported. Capacity of health and education personnel needs upgrading. Themerging of central and local government offices requires comprehensive organizationalrestructuring. Continued ethnic strife has displaced over a million people, putting pressure onthe receiving communities. The 2000 national census shows that population growth ratedeclined to 1.35 percent for 1990–2000 compared to 1.97 percent in the previous decade.Better reproductive health services are needed if this trend is to continue and allow the countryto meet its population targets. Despite increased interisland migration, 59.2 percent of thepopulation still resides in Java.
17. In response to these concerns, ADB has just begun implementing a decentralized healthproject and two more have been programmed. A decentralized basic education project iscurrently under processing and support for two more have been indicated in the program. Theseloans and TA interventions will help build up capacity of education and health services at thelocal level. Decentralization will be monitored through advisory TA. Improved nutrition is apriority and will be supported through advisory TA. Provision of basic services for vulnerablegroups, including internal refugees, will be addressed through ESW to develop a socialprotection strategy followed by a project that will build on the earlier crisis response safety netprograms and develop a comprehensive and sustainable social protection system.
b. Gender and Development
18. The Government increasingly emphasizes its support for gender equality and equitythrough measures such as the restructuring of the State Ministry for Women’s Empowerment topromote gender mainstreaming, and introduction of gender equality as a development goal inthe 1999 Broad Guidelines for State Policies. The 2000 Presidential Decree on GenderMainstreaming requires all government agencies to mainstream gender into governmentpolicies, legislation, and programs. This initiative is supported by the National DevelopmentProgram (PROPENAS), which especially addresses gender equity and equality. TheGovernment has introduced a zero-tolerance policy and adopted the National Plan of Action forthe Elimination of Violence against Women, which recognizes state and military violence inconflict areas.
19. To strengthen ADB’s Gender and Development policy, a gender study was completedlast year resulting in the Gender Briefing Paper. To further gender mainstreaming, the StateMinistry for Women’s Empowerment, the National Planning Agency (BAPPENAS), and ADB arecollaborating to develop a mechanism, supported by advisory TA, to better monitor gendermainstreaming in ADB projects. Crucial changes in public policy and administration to achievegender equality and equity will be assisted. ESW has been programmed in 2002 to help developan advisory TA, which is in the forward program, and to indicate other possible areas of support.
4. Regional Development and Regional Equity
a. Decentralization
20. Decentralization, formally initiated on 1 January 2001, is well underway. Of 1.9 millionGovernment staff transfers to local governments, 1.6 million had been achieved by end-April2001. The main laws and regulations governing the administrative and financial aspects ofdecentralization have been issued, but revisions are expected. The ADB program supports themassive national effort by aiding policy formulation and capacity building. Advisory TA is
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planned to support the Regional Advisory Council, bring changes in public financialarrangements, and improve center-local financial relations. Assistance is programmed toencourage private sector participation in infrastructure development in local areas, and amendthe policy and regulatory environment. Support for capacity building will be sectoral and cross-sectoral. For sectoral support, loans exceeding a total of $100 million have been provided toprojects in education, health, environment, road transport, agriculture, etc. More assistance isplanned in the forward program. Project assistance is planned for 2002 to draw up institutionalarrangements to address cross-sectoral needs such as planning and financial managementcapacities, public procurement, project implementation, general administration, etc. in asustainable manner. As the program period covers the difficult initial post decentralizationyears, almost all projects in the program will address issues in areas of policy, capacity building,or implementation related to decentralization.
b. Rural Development
21. With continuing high poverty incidence in rural areas, where around two thirds of thepoor live, support for agriculture and rural development is a key instrument of poverty reduction.The need to increase farm incomes is critical, but policy deficiencies pose an importantbottleneck. The sector also needs to gear itself up for foreign competition resulting fromIndonesia’s compliance with World Trade Organization agreements. Accordingly, an agriculturesector strategy study will review the necessary policy and institutional changes. The study couldbe the basis for an investment loan later, if necessary. ADB will continue support for communityempowerment, focusing especially on the needs of the rural poor, irrigation, and provision ofmicrofinance through four separate projects. Project preparatory TA to tackle deficiencies in thetree crops sector; and advisory TA to support research and extension in the decentralizedcontext have also been programmed.
c. Urban Development
22. Major issues in urban development and provision of urban services for the poor are (i)increased urbanization, (ii) weakness of local utilities and local governments in general, and (iii)lack of adequate private sector investments. ADB’s program addresses these problemssquarely. ADB will provide TA in 2001 to deal with problems of water utilities. Continuingdialogue with the Government includes (i) water tariff policy to reflect cost recovery for services,(ii) private sector participation, and (iii) financial and corporate autonomy. Providing basic urbanservices for the poor is a priority, with loans programmed for each forward program year from2002 to 2004. These projects will focus on urban poverty reduction; urban services delivery andmanagement issues for secondary cities; and slum upgrading and shelter for the urban poor.The program also encourages private sector participation in urban infrastructure development(paras. 12 and 26).
5. Environmental Protection and Natural Resources Management
23. Major concerns regarding natural resources and environmental management havearisen due to lack of enforcement and regulation after decentralization. While decentralizationbrings citizens closer to vital decision making, unless local capacity and willingness to addresspolicy and governance issues are adequate, resources might be used only for short-term gain,with serious implications for long-term viability. Although legislation is adequate, enforcement isnot. The multiplicity of agencies and confusion over jurisdiction have contributed to severeenvironmental problems such as forest fires, which have affected Southeast Asia, andmeasures to prevent them are weak. These problems are compounded by decentralization.Emerging global cooperation in environmental management could lead to countries
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institutionalizing the Clean Development Mechanism (CDM) by adopting cleaner productionapproaches to meet international environmental standards.
24. All ADB loans will pay heed to potential environmental impacts. An advisory TA will helpimprove decentralized management of natural resources. The forestry sector faces majorproblems relating to governance, forest fires, and haze. ADB has extended considerable TA toaddress policy issues, and focus will be on monitoring progress and rehabilitation of degradedareas. ADB will help improve management of natural resources and rehabilitation through aproject to be posed for financing by the Global Environment Facility, and through projects forcoral reef rehabilitation, coastal resources management and fisheries. Government efforts toimprove air quality will be supported through a project for cleaner energy use as part of the“Blue Skies” program, while efforts to reduce pollution will be supported through TA for adoptionof cleaner production approaches. TA for urban waste management, institutionalizing the CDM,and generating gas from waste will help clean up the environment and improve management ofdepleting natural resources. The program will be supported by ESW to prevent land degradationand implement ADB’s water policy.
C. Private Sector Development
25. Private investors remain cautious in the face of political uncertainty, irregularities intrading of shares, slow resolution and disposal of distressed debt, and ineffective courts. Someimprovements in the business environment have been made under ADB’s IndustrialCompetitiveness and Small and Medium Enterprise Program Loan approved in 2000, althoughthe introduction of an investment policy and other key measures are delayed. The public isincreasingly aware that unethical business practices and lack of transparency in governancecontributed to the crisis and is affecting recovery. Among the efforts to rectify the situation is theestablishment of the National Committee for Corporate Governance, with members drawn fromthe private and public sectors. The committee issued the Code of Good Corporate Governancein March 2001, drawing on best international practices.
26. Private sector development continues to be a key goal of the forward program and ispursued through (i) financial and capital market reforms, (ii) support for private sectorparticipation in infrastructure in local government areas, and (iii) institutional and regulatoryreform. As many as 30 percent of loans by number and as much as 33 percent by amount of thetotal 2002-2004 program have private sector development as a cross-cutting operationalpriority. Lack of a conducive environment has hindered development of a pipeline of prospectiveprojects of the Private Sector Group (PSG). However, the risk-mitigating role of ADB under thepolitical risk guarantee is a potentially valuable tool for privatizing infrastructure facilities andservices. The deal to privatize the Kota Depok solid waste management is complete anddiscussions are ongoing on the Pekanbaru municipal water supply project for possible ADBassistance. Similar projects will be pursued. Support to establish a private hospital inKalimantan is under evaluation. Consideration has also been given to support the establishmentof an equity investment fund to target SMEs, drawing on PSG’s Thailand experience.
D. Subregional Cooperation
27. The prospects for regional cooperation in the Brunei-Indonesia-Malaysia-PhilippinesEast Asian Growth Area (BIMP-EAGA) have improved as Asian countries gradually recoverfrom the crisis and although political uncertainty continues. The Senior Officials Meeting ofBIMP-EAGA in August 2000 and the 4th Association of Southeast Asian Nations (ASEAN)Informal Summit have stated their support for BIMP-EAGA. ADB’s efforts in regionalcooperation include a strategy to strengthen economic development through regional
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cooperation in Southeast Asia, and an assistance program to support the strategy. Thepossibility of strengthening ties between members of the Indonesia-Malaysia-Thailand GrowthTriangle (IMT-GT) will be explored in view of the area’s development potential, subject toreaffirmation of participating governments. Accordingly, the strategy study proposed ontransport requirements in BIMP-EAGA will also cover IMT-GT. The idea of subregionalcooperation between eastern Indonesia, southern Philippines, and northern Australia was alsomooted during the Country Programming Mission (CPM) and will be explored.
28. The assistance program has earmarked TA to encourage regional transport cooperation.Several projects have the scope to include subregional cooperation initiatives, including theinterisland transport and the SME development projects. The latter could be used to follow upon the results from the regional TA for SME Development in the EAGA region.
III. PORTFOLIO MANAGEMENT ISSUES
A. Portfolio Performance
29. As of 31 December 2000, 70 ongoing loans totaling $7.1 billion comprised 66 projectloans for $4.9 million and 4 program loans for $2.2 billion. About $3.68 billion in the loanportfolio remains undisbursed. The disbursement ratio was 18.5 percent in 2000 against theADB average of 20.5 percent, and represents a sharp decline from the 1999 disbursement ratioof 24.8 percent. The drop is due primarily to the fact that program loans achieved only 34percent of their disbursement targets in 2000 although project loans achieved 124 percent.Contract awards also decreased 36 percent in 2000 from the 1999 level, despite projectsattaining 155 percent of total awards targeted in 2000.
30. Of the ongoing project loans, 20 are partly satisfactory and 3 unsatisfactory in terms ofimplementation progress, while 12 were partly satisfactory in achieving development objectives.In terms of combined ratings for implementation progress and development objectives, 24 loansare partly satisfactory and 3 unsatisfactory, together constituting 38.6 percent of the portfolio bynumber and 56 percent by amount. Of the 44 loans delayed by more than 20 percent, 20 weredelayed by 40 percent or more. Late start-ups continue to affect implementation. After goodprogress in 1999, submission of audited project accounts and financial statements deterioratedin 2000. Of 52 loans needing audited accounts by end 2000, 24 complied, 19 complied late, and9 did not comply.
B. Counterpart Funding
31. The Government has been requesting assistance to resolve the counterpart budgetsproblem which had been aggravated by the financial crisis. In 1998, ADB agreed to providefinancing up to 80 percent on a contract-by-contract basis for FY1999 on the understanding thatadjustments would be made to maintain ADB’s originally envisaged financing percentages. ADBalso carried out comprehensive “spring-cleaning” exercises in 1998, 1999, and 2000 tostreamline the portfolio. More recently, ADB agreed to change the financing ratio for projectsapproved in 2000 to 80:20 (ADB:Government) for the first three years of implementation. Duringthe 2001 CPM and Country Portfolio Review Mission (CPRM), the Government requested ADBto consider increasing its financing share for projects approved during 2001 and for all projectsunder the ongoing portfolio. The counterpart financing problem is likely to be furtherexacerbated by decentralization, with many local governments finding it difficult to shoulder theirshare of counterpart funds. An exercise to review all loan projects affected was initiated in June2001 to thoroughly investigate and resolve this problem.
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C. Monitoring and Evaluation
32. Postevaluation results as of 31 December 2000 indicate that of 19 projects evaluatedduring the period 1996-2000, 4 (21.1 percent) were highly successful, 11 (57.9 percent)successful, 2 (10.5 percent) partly successful and 2 (10.5 percent) unsuccessful. The 2000evaluations indicate the need for (i) sound design, (ii) effective community participation forownership and proper operation and maintenance, (iii) a capable project monitoring office, and(iv) appropriate strategies that will help attain all objectives. ADB should also help buildborrowers’ capacity to respond effectively to disasters, especially in disaster-prone areas.
33. Postevaluation results and performance of the ongoing portfolio indicate a need to stepup efforts to improve project implementation. The Indonesia Resident Mission has recently beenstrengthened with this as an objective. The problem affects all funders. The common issue ofaid effectiveness has been raised at all important funder meetings with the Government, suchas at the interim Consultative Group Meeting for Indonesia (CGI) in April 2001. In order toincrease the impact of dialogue with the Government, ADB has begun a process of joint countryportfolio reviews with the World Bank and Japan Bank for International Cooperation (JBIC).Improvement of implementation is now a major issue of policy dialogue with the Government,with improvements specified in the COS as necessary for upper-range annual lending and forcontinued Asian Development Fund (ADF) availability (para. 34). With decentralization, thedialogue will increasingly tackle local government implementation performance. The lessonsfrom portfolio reviews are being used to design the country program. With this in mind, a CPRMwas fielded parallel to the 2001 CPM. Project selection and program scheduling have beeninfluenced by past implementation experience, with more processing time and capacity-buildinginputs provided in problematic sectors.
IV. COUNTRY PERFORMANCE AND LENDING LEVELS
A. Performance Indicators
34. Indonesia’s access to ADF will be in keeping with ADB’s recent policy on performance-based allocation. Key performance indicators will be monitored as triggers for ADF availability.Two lending cases have been adopted:
(i) Base case. Annual lending of $150 million from ADF resources predicated on
(a) satisfactory progress in poverty reduction, to be assessed throughmonitoring arrangements jointly agreed upon with Government underSection IV of the Poverty Partnership Agreement;
(b) reduction in number of delayed program loan tranches as compared to 30June 2001;
(c) improvement in portfolio performance in terms of the proportion ofsatisfactory projects (based on current criteria) over 30 June 2001situation; and
(d) improvement in percentage of projects submitting audited financialstatements as compared to 30 June 2001.
(ii) Low case. If the Government fails to achieve progress in the above four areas,ADF lending would be lowered to $100 million annually.
B. Lending Level Proposed
35. The 2002–2004 lending program targets roughly $1.2 billion in assistance annually inkeeping with the upper end of the range ($0.6 billion–$1.2 billion) decided in the COS. However,
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two major risks may affect actual lending. First, projects under Central Governmentresponsibility occupy only 30 percent of the programmed investment in 2002–2004; the rest areunder local governments. The Government clarified during the CPM that in 2001 and until apolicy and mechanism for on-lending are developed, all projects (whether in devolved sectors ornot) will be temporarily carried out by the Central Government. However, very soon and perhapsbeginning in 2002, projects in devolved areas could be handed over to local governments. Thiswould introduce several difficulties such as local governments’ (i) inadequate projectimplementation experience, (ii) insufficient capacity to share in project costs or repay, (iii) lowabsorptive capacities, (iv) administrative difficulties of coordinating with large numbers of localgovernments, among others. Second, the first two years of the program contain three programloans and several sector loans, some of which could slip if policy reforms are delayed.
C. Loan Program
36. The main objectives of the 2002–2004 lending program are poverty reduction and goodgovernance. The program strongly emphasizes poverty reduction (see para. 7). Governanceinterventions are important in every sector supported. The list of loans is in Appendix 4,providing poverty and thematic priority classifications.
D. Technical Assistance and Economic and Sector Work Program
37. The TA and ESW programs emphasize poverty reduction, and fiscal and institutionaldecentralization. Firmed-up TA programs comprise 25 TAs (13 project preparatory TAs[PPTAs]) for $14.2 million in 2002; 17 TAs (8 PPTAs) for $10.1 million in 2003; and 14 TAs (7PPTAs) for $9.1 million in 2004. PPTAs will emphasize inclusion of pro-poor interventions andgood governance measures in loan designs. Advisory TAs will support all COS focus areas.Substantial assistance will be provided for good governance reforms directly through support forcorporate governance, fiscal decentralization and anticorruption efforts, and through ADB’ssupport to the Governance Partnership. Finally, activities have been planned to implement andfollow up the PPA (see para. 6), such as (i) management of regional disparity underdecentralization, (ii) development of poverty indicators, (iii) gender mainstreaming, and (iv)support to gender issues.
38. An important feature of the program is its emphasis on ESW through staff studies incritical areas to improve operational planning and project design. ESW will focus on reducingpoverty and regional inequality. Sector work will include analysis of social protection, education(including information technology) policies, and private sector provision of social services.Sector studies for tree crops development, drought reduction, increasing and sustainingfishermen income, and developing an SME strategy will help ADB focus on pro-poor growthinitiatives. Energy, interisland, and local roads development staff studies will help upgraderemote and underdeveloped regions, while the analysis of the geographical focus in countryoperations and several staff studies on separate issues connected with decentralization will helpmake overall ADB regional support initiatives more effective.
E. Summary of Changes
39. The major changes in the program compared to the 2001-2003 Country Assistance Planare (a) higher lending levels consistent with the upper end of the annual lending range indicatedin the COS; (b) a change in the composition of the lending program consistent with thereorientation of priorities given by the new COS; (c) particular emphasis on support fordecentralization in view of the major decentralization process underway; and (d) emphasis onESW to guide operations.
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APPENDIXES
Number Tile Page Cited on (page,para.)
1 Table A.1: Economic Indicators 11 1, 2 & 3
2 Table A.2.1: Population and Social Indicators 12 2, 5
2 Table A.2.2: Environmental Indicators 13 5, 23
3 ADB Portfolio Performance Indicators 14 7, 29 & 30Table A.3.1: Implementation, Disbursement Performanceand Postevaluation Results
3 Table A.3.2: Status of Project Implementation of Public 15 8, 32Sector Projects
4 Table A.4.1: Lending Program 2002 17 8, 359, 36
4 Table A.4.2: Lending Program 2003 18 8, 359, 36
4 Table A.4.3: Lending Program 2004 19 8, 359, 36
4 Table A.4.4: Technical Assistance Program 2002 20 9, 37
4 Table A.4.5: Technical Assistance Program 2003 22 9, 37
4 Table A.4.6: Technical Assistance Program 2004 23 9, 37
5 Economic and Sector Work Program 2002-2004 24 9, 38
6 Project Selection Briefs and TA Concept Papers 27
11 Appendix 1
Item 1995 1996 1997 1998 1999 2000
A. Income and Growth
1. GDP per Capita ($, current) 1,043 1,155 691 472 704 755 710
2. GDP Growth (%, in constant prices) 8.2 7.8 4.7 (13.0) 0.3 4.8 3.5
Agriculture 4.4 3.1 1.0 (0.7) 2.1 1.7 2.8
Industry 10.4 10.7 5.2 (11.4) 1.4 5.9 3.9
of which manufacturing 10.9 11.6 5.3 (13.1) 2.6 7.5 5.5
Services 7.6 6.8 5.6 (3.9) 1.8 6.0 3.5
B. Saving and Investment (current)
1. Gross National Saving 28.6 27.4 29.4 23.1 15.2 29.3 n.a
2. Gross Domestic Investment 31.9 30.8 31.8 20.0 13.1 25.8 n.a
C. Money and Inflation
1. Consumer Prices (average) 9.4 7.9 6.6 58.4 20.5 9.3 11.6
2. Broad Money (M2) 27.6 29.6 23.2 60.4 13.3 6.5 n.a
D. Government Finance
1. Revenues 15.5 15.8 15.7 15.1 14.2 20.7 19.5 c
2. Expenditures 14.9 15.6 15.7 18.8 14.9 22.4 23.2 c
3. Overall Surplus/Deficit (-) 0.6 0.2 0.0 (3.7) (0.7) (1.6) (3.7)
E. Balance of Payments 1. Merchandise Trade Balance
(% of GDP)3.2 2.6 4.9 18.9 13.7 16.3 16.8
2. Current Account Balance ($ million)
(6,760) (8,174) (4,692) 4,097 6,168 7,694 5,585
3. Current Account Balance (% of GDP)
(3.3) (3.4) (2.3) 4.2 4.1 5.0 3.5
4. Exports, $ (annual percent change) 13.4 9.7 7.3 (8.6) (0.4) 27.4 (5.0) d
5. Imports, $ (annual percent change) 27.0 5.7 (2.9) (34.4) (12.2) (39.8) (16.8) e
F. External Payments Indicators b
1. Gross Foreign Assets ($ million) 18,787 25,529 21,418 23,762 27,054 29,394 n.a
(months of nonoil imports) 5.9 7.0 4.6 10.1 8.4 7.4 n.a2. External Debt Service (% of exports of
goods & services)30.3 35.9 44.5 57.8 56.8 44.8 n.a
3. External Debt (% of GDP) 53.3 48.5 62.2 146.3 103.3 84.3 n.a
G. Memorandum Items
1. GDP (current, Rp trillion) 455 533 628 990 1,119 1,291 1,496 2. Exchange Rate (Rp per $, middle
rates at BI)2,383 4,650 8,025 7,100 9,595 9,394
3. Population (million) 195.3 198.3 201.4 204.4 206.5 203.5 204.1 GDP = gross domestic product; o/w = of which; na = not available.a
Staff estimates.b
c From Planned State Budget - Last Revision (June 2001)d fob, for 2001 = total growth Jan - May (BPS data)e cif, for 2001 = total growth Jan - May (BPS data)
2001
estimates a
Fiscal year starts April 1, e.g. 1995 data refers to FY1995/96, until 2000. FY 2000 is March to December 2000, FY 2001 is a calendar year.
Table A.1: Economic Indicators
(percent of GDP)
(annual percent change)
(percent of GDP)
12 Appendix 2, page 1
Items
Total Population (millions) 164.6 b 179.4 b 203.5 (2000) a
Annual Population Growth Rate (%) 2.22 b 1.98 b 1.35 (2000) a
Total Fertility Rate (births per woman) c 4.1 (1980-85) 3.3 (1985-90) 2.8 (1997) b
Maternal Mortality Ratio (per hundred thousand live births) c
360 (1984-88) 390 (1989-94) -
Infant Mortality Rate (below 1 year, per 1,000 live births) b
71 (1986) d 71 46 (1999)
Life Expectancy at Birth (years) b 61 (1983) e 60 b 66 (1999) Female - 62 68 (1999) Male - 58 64 (1999) Adult Literacy Rate (10+ years; in %) 69 (1980)c 84 89.8 (1998) b
Primary School Enrollment Rate (Gross) d
Female 92 (1980) 105.0 (1993) d 108 (1999) Male 81 (1980) 105.2 (1993) d 108 (1999) Junior Secondary School Enrolment Rate (Gross) d
Female 53 (1980) 60.0 (1993) d 76 (1999)
Child Malnutrition (percent of under 5 years) d 51 (1986) 44 (1989) 39 (1999)
Population with Access to Safe Water (%) 38 c 63 (1992) e 74 (1999) d
Population with Access to Sanitation (%) - 51 (1992) e 74 (1999) d
Public Education Expenditure as % of GDP c 1.5 1.0 0.8 (1995)
Public Health Expenditure as % of GDP e - 0.6 0.8 (1994)
Population Below Poverty Line (%) 21.6 (1984)c 15.1 d 18.2 (1999) f
Expenditure Ratio of Highest 20 % to Lowest 20% e
5.2 (1984) 4.7 4.7 (1999)
Human Development Index f 0.591 (1987) 0.515 0.670 (1998)Human Development Ranking f 77 108 109 (1998)
a Berita Resmi Statistic Volume 3/IV, January 3, 2001b CBS, Welfare Indicator, various issues.c CBS, Health and Demographic Survey.
e CBS. Welfare Statisticsf August 1999g UNDP, Human Development Report.
n.a. Not available
Population Indicators
Social Indicators
d CBS, Statistics in 50 Years of Indonesian Independence.
Table A.2.1: Population and Social Indicators
1985 1990 Latest Year
Appendix 2, page 2
Items
Annual Rate of Deforestation 1600 km2 (1999)Crop Land (ha per capita) 1 0.157 (1999)Extent of Forest and Woodland (%of total land area)
0.48 (1999)
Protected Areas (ha) 2 22,430,384.07 (1997)Per Capita Carbon Dioxide Emission from Motorized Vehicles 3 (metric tons)
1.2 (1997)
Per Capita Commercial Energy Consumption (tons of oil equivalent) 4
0.693 (1997)
1 BPS, Stats of Indonesia, 1999. Calculated for certain crops2 Protection and Conservation of Statistics 1999/20003 UNDP, Human Developement Report, 20014 UNDP, Human Development Repor, 2000
13
Table A.2.2: Environmental Indicators
Latest Year
14 Appendix 3, page 1
ADB PORTFOLIO PERFORMANCE INDICATORSTable A3.1 : Implementation, Disbursement Performance and Postevaluation Results
Public Sector Projects only(as of 31 December 2000)
A. Project Portfolio Implementation Progress Development Objectives
$ million % No. % HS S PS U HS S PS U
Agriculture and Natural Resources 1,075.52 15.1 25 35.7 0 18 7 0 0 23 2 0 Energy 1,155.30 16.2 6 8.6 1 2 3 0 0 3 3 0 Industry and Nonfuel Minerals 221.00 3.1 2 2.9 0 1 1 0 0 1 1 0 Finance 1,497.00 21.0 3 4.3 0 1 1 1 0 3 0 0 Social Infrastructure 2,358.81 33.1 25 35.7 0 19 5 1 0 22 3 0 Transport and Communications 760.19 10.7 7 10.0 0 4 3 0 0 5 2 0 Others 56.08 0.8 2 2.9 0 1 0 1 0 1 1 0
Total 7,123.90 100.0 70 100.0 1 46 20 3 0 58 12 0
B. Disbursements b OCR
(1) Total funds available for withdrawal ($ mn, active loans only) (2) Disbursed amount ($ mn, cumulative, active loans only) (3) Percentage disbursed [(2)/(1)] (%) (4) Disbursements ($mn, active loans only, latest year) (5) Disbursement ratio (%) c
C. Net Transfer of Resources ($ million) d OCR Total
Net transfer in 1996 Net transfer in 1997 Net transfer in 1998 Net transfer in 1999 Net transfer in 2000
D. Post-Evaluated Projects
(By Year of PPAR Circulation) e
1. Postevaluation Rating (as of 31 December 2000) No.
Highly Successful (HS) 4 Successful (S) 11 Partly Successful (PS) 2 Unsuccessful (U) 2 No Rating (NR) -
Total 19
2. Postevaluation Rating by Sector 1996-2000 (as of 31 December 2000) No. % No. % No. % No. % No. % No. %
Agriculture and Natural Resources 0 0.0 5 45.5 0 0.0 2 100.0 0 0.0 7 36.8 Energy 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Finance and Industry 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0 Social Infrastructure 1 25.0 3 27.3 2 100.0 0 0.0 0 0.0 6 31.6 Transport and Communications 3 75.0 2 18.2 0 0.0 0 0.0 0 0.0 5 26.3 Multisector 0 0.0 1 9.1 0 0.0 0 0.0 0 0.0 1 5.3
Total 4 100.0 11 100.0 2 100.0 2 100.0 0 0.0 19 100.0
a HS: Highly satisfactory; S: Satisfactory; PS: Partly satisfactory; U: Unsatisfactory
b Includes loans closed during the year.
c Ratio of disbursement during the year over the undisbursed net loan balance less cancellations at the beginning of the year. Effective loans during the year have
also been added to the beginning balance of undisbursed loans.d
Public sector loans only.e Source: OED
Total
ADF Total
Net Loan Amount
8,128.04 376.02 8,504.064719.19 97.43 4,816.62
58.06 25.91 56.64714.78 33.60 748.38
18.34 21.88 18.47
ADF
(1,200.38) 15.50 (1,184.89)(117.32) 10.39 (106.92)591.80 (7.43) 584.36686.11 (6.36) 679.7619.70 11.28 30.98
1996 - 2000%
21.157.910.5
Rating (No.) a
HS S PS US NR Total
10.50.0
100.0
Net
Loa
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31
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17.9
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16.4
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21
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18
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57.5
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29
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51.8
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SS
Not
e: E
xclu
des
loan
s cl
osed
dur
ing
the
year
.A
DF
= A
sian
Dev
elop
men
t Fun
d, A
GR
= A
gric
ultu
re &
Nat
ural
Res
ourc
es, E
NE
= E
nerg
y, F
&I =
Fin
ance
and
Indu
stry
, OC
R =
ord
inar
y ca
pita
l res
ourc
es, O
TH
= O
ther
s/M
ultis
ecto
r, P
S =
par
tly s
ucce
ssfu
l, S
= S
ucce
ssfu
l, S
OC
= S
ocia
l Inf
rast
ruct
ure,
T&
C =
Tra
nspo
rt a
nd C
omm
unic
atio
ns
Pro
ject
Per
form
ance
Rat
ing
Tab
le A
3.2:
Sta
tus
of P
roje
ct Im
plem
enta
tion
of P
ublic
Sec
tor
Pro
ject
s(A
s of
31
Dec
embe
r 20
00)
Appendix 3, page 215
Net
Loa
n A
mou
ntA
ppro
val
Effe
ctiv
ityC
losi
ng D
ate
Pro
ject
Cum
Con
trac
tC
umm
ulat
ive
Sec
tor
Loan
Pro
ject
Titl
eO
CR
AD
FD
ate
Dat
eO
rigin
alR
evis
edP
rogr
ess
Aw
ards
Dis
burs
emen
tIm
plem
enta
tion
Dev
elop
men
tN
o.($
mill
ion)
(% c
ompl
ete)
($ m
illio
n)($
mill
ion)
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gres
sO
bjec
tive
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C13
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AL
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ST
&C
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S P
RO
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&C
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AD
S (
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CT
OR
) P
RO
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ov-9
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ec-9
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9P
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C14
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ME
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an-9
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ov-0
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ST
ER
N IS
LAN
DS
AIR
TR
AN
SP
OR
T D
EV
ELO
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T10
3.00
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ec-9
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ec-0
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122.
01P
SP
ST
&C
1798
RO
AD
RE
HA
BIL
ITA
TIO
N (
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CT
OR
) P
RO
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0.00
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ec-0
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ar-0
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00.
000.
00S
S
Tot
al6,
755.
08
368.
83
3,53
8.35
3,43
6.46
Not
e: E
xclu
des
loan
s cl
osed
dur
ing
the
year
.A
DF
= A
sian
Dev
elop
men
t Fun
d, A
GR
= A
gric
ultu
re &
Nat
ural
Res
ourc
es, E
NE
= E
nerg
y, F
&I =
Fin
ance
and
Indu
stry
, OC
R =
ord
inar
y ca
pita
l res
ourc
es, O
TH
= O
ther
s/M
ultis
ecto
r, P
S =
par
tly s
ucce
ssfu
l, S
= S
ucce
ssfu
l, S
OC
= S
ocia
l Inf
rast
ruct
ure,
T&
C =
Tra
nspo
rt a
nd C
omm
unic
atio
ns
(As
of 3
1 D
ecem
ber
2000
)
Pro
ject
Per
form
ance
Rat
ing
Tab
le A
3.3:
Sta
tus
of P
roje
ct Im
plem
enta
tion
of P
ublic
Sec
tor
Pro
ject
s
Appendix 3, page 316
Poverty Thematic Responsible Year of ADB
Sector/Project Name Classification a Priority b Division c PPTA Total OCR ADFd Total Govt 2002 Firm Loans
Agriculture and Natural Resources1 Rural Micro Finance CPI PSD AEAR 2001 150 150 2 Participatory Irrigation Development and
Management Sector ProjectENV AEFN 2001 80 20 100
3 Coral Reef Rehabilitation and Management II ENV AEFN 2001e 25 25
Industry and Finance 4 Non Bank Financial Governance Program GG IEFI 1999 150 150
Energy5 Power Transmission for Regional Development PSD/ECO IEEN 2001 150 150
Transport6 Road Rehabilitation (Sector) IIf PSD/ECO IETC 2001 150 150
Social Infrastructure 7 Urban Poverty Reduction CPI HD AEWU 2001 100 50 150 8 Water Supply and Sanitation CPI HD AEWU 2001 100 100 9 Decentralized Health Service II CPI HD AEEH 2001 100 50 150
Others10 Sustainable Capacity Building for Decentralization HD/GAD IRM 2001 - 30 30
Total 1,005 150 1,155 a CPI = Core Poverty Intervention.b ECO = Economic Growth, ENV = Environmental Protection, GAD = Gender and Development, GG = Good Governance, HD = Human Development, and PSD = Private Sector Development.c
d Project preparation carried out in the frame of COREMAP I.e ADF allocations are tentative at this stage.
f Will include support for developing a policy and institutional framework for private sector participation.
Cofinancing/ Others
LOAN AND TECHNICAL ASSISTANCE PROGRAM
Project Cost ($ million)
Table A4.1: Lending Program 2002
Appendix 4, page 1
17
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEFN = Forestry and Natural Resources Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East); IETC = Transport and Communications Division (East); and IRM = Indonesia Resident Mission.
Poverty Thematic Responsible Year of ADB
Sector/Project Name Classification a Priority b Division c PPTA Total OCR ADFd Total Govt
2003 Firm LoansAgriculture and Natural Resources
1 Poverty Reduction through Land PI ENV AEFN 2002 150 150 Rehabilitation and Management (GEF)
2 Community Empowerment for Rural Devt. II PI HD AEAR 2002 150 150
Industry and Finance
3 Financial Sector Supporte GG /ECO IEFI 2002 150 150
Transport 4 Inter Island Transport PSD/ECO IETC 2002 150 - 150
Energy5 Cleaner Energy Use for Blue Skies ENV IEEN 2002 100 100 6 Power Sector SDP II PSD IEEN 2002 150 - 150
Social Infrastructure 7 Secondary Cities Urban Mgt. & Devt Sector PI HD AEWU 2002 150 150 8 Decentralized Basic Education IIf CPI HD AEEH 2002 100 100 9 Local Government Infrastructure Development
Facility (TA Loan) PSD AEWU 2002 10 10
Others10 Support for Government Audit Reforms GG IRM 2002 75 75
- Total 1,185 - 1,185
a CPI = Core Poverty Intervention, PI = Poverty Intervention.b ECO = Economic Growth, ENV = Environmental Protection, GG = Good Governance, HD = Human Development, and PSD = Private Sector Development.c
d ADF allocations are tentative at this stage.e Could include housing financing reforms.
f Will include support for the Ministry of Religious Affairs.
Table A4.2: Lending Program 2003
Project Cost ($ million)
Cofinancing/ Others
Appendix 4, page 2
18
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEFN = Forestry and Natural Resources Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East); IETC = Transport and Communications Division (East); and IRM = Indonesia Resident Mission.
Poverty Thematic Responsible Year of ADB
Sector/Project Name Classification a Priority b Division c PPTA Total OCR ADFd Total Govt2004 Firm LoansAgriculture and Natural Resources
1 Rural Poverty Reduction CPI HD AEAR 2003 150 150 2 Marine and Coastal Resources Management II ENV AEFN 2003 100 100 3 Poor Fishermen Income Improvement Project CPI HD/ENV AEFN 2003 50 50
Industry and Finance4 SME Development II PSD IEFI 2002 150 150
Transport 5 Local Roads Development Sector PSD IETC 2003 150 150
Energy6 Local Grids Development PI PSD IEEN 2003 100 100
Social Infrastructure 7 Sustainable Social Protection CPI HD AEEH 2002 150 .. 150 8 Decentralized Health Services III PI HD AEEH 2003 100 100 9 Slum Upgrading and Shelter for Urban Poor CPI HD/ENV AEWU 2002 150 150
10 Community Based Water Supply and Sanitation Sector
CPI HD AEWU 2002 100 .. 100
Total 1,200 - 1,200 a CPI = Core Poverty Intervention, PI = Poverty Intervention.
b ENV = Environmental Protection, HD = Human Development, and PSD = Private Sector Development.
c
d ADF allocations are tentative at this stage.
Table A4.3: Lending Program 2004
Cofinancing/ Others
Project Cost ($ million)
Appendix 4, page 3
19
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEFN = Forestry and Natural Resources Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East), and IETC = Transport and Communications Division
Responsible Type
Sector/Project Name Division a of TA b ADB Others Total2002Agriculture and Natural Resources
1 Community Empowerment for Rural Development AEAR/IRM PP 500 500 2 Poverty Reduction Through Land Rehabilitation and Management (GEF AEFN PP 800 800
Subtotal 1,300 - 1,300
Industry and Finance
3 Financial Sector Supportc IEFI AD/PP 1,000 1,000 4 Restructuring of Pension and Insurance Sectors IEFI AD 1,000 1,000 5 SME Development IId IEFI PP 800 800
Subtotal 2,800 - 2,800
Transport
6 Inter Island Transporte IETC PP 500 500 Subtotal 500 - 500
Energy7 Cleaner Energy Use for Blue Sky IEEN PP 600 - 600 8 Power Sector SDP II IEEN PP 800 - 800
Subtotal 1,400 - 1,400
Social Infrastructure 9 Sustainable Social Protection AEEH PP 600 - 600
10 Support for Decentralized Education Management If AEEH AD 700 700 11 Decentralized Basic Education II AEEH PP 300 300 12 Public Health and Nutrition AEEH AD 500 500 13 Secondary Cities Urban Management and Development AEWU PP 800 - 800 14 Regulatory Framework for the Water Supply Sector AEWU AD 500 500
15 Slum Eradication and Shelter Delivery for the Urban Poorg AEWU PP 1,000 1,000 16 Private Sector Participation in Infrastructure under Decentralization IRM/PE1 AD 150 17 Community Based Water Supply and Sanitation AEWU PP 750 750
Subtotal 5,300 - 5,150
Amount ($'000)
Table A4.4: Technical Assistance Program 2002
Appendix 4, page 4
20
(continuation)Responsible Type
Sector/Project Name Division a of TA b ADB Others Total
Others
18 Improving Environmental Performance through Cleaner Production ENVD AD 500 - 500 19 Gender Mainstreaming in Policy and Program Planning IRM/PE1 AD 400 400 20 Managing Regional Disparity on Economic and Poverty Program under
Decentralization IRM/PE1 AD 400 400 21 Financing Mechanism for Local Government Development AEWU/IRM AD 500 500 22 Support for Government Audit Reforms IRM/PE1 AD/PP 400 400 23 Anticorruption (Attorney General's Office) OGC AD 500 500 24 Support for Civil Society Monitoring of ADB Projects IRM/PE1 AD 200 200 25 Development of Proxy Indicators for Poverty Measurement IRM/PE1 AD 150 150
Subtotal 3,050 - 3,050 Total 14,350 - 14,200
a
b AD = advisory, PP = project preparatory.c Could include housing financing reforms. d Will include Environmental Performance Management for Cleaner Production (ENVD to participate).e Including multimodal transportation.f Will include support for education policy reform (National Committee & Commission).g Could include support for housing for the poor.
Amount ($'000)A
ppendix 4, page 521
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEFN = Forestry and Natural Resources Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); ENVD = Environment Division; IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East); IETC = Transport and Communications Division (East); IRM = Indonesia Resident Mission; OGC = Office of the General Counsel, and PE1 = Programs Division East 1.
Responsible Type
Sector/Project Name Division a of TA b ADB Others Total2003Agriculture and Natural Resources
1 Rural Poverty Reduction AEAR PP 700 700 2 Research and Extension in a Decentralized Context AEAR AD 600 600 3 Assessment of Natural Resources Mgt. in a Decentralized Envt. AEFN AD 200 200 4 Marine and Coastal Resources Management II AEFN PP 600 600 5 Poor Fisherman Income Improvement Project AEFN PP 600 600
Subtotal 2,700 - 2,700
Industry and Finance 6 Improving Competition in Financial and Industrial Sectors IEFI AD/PP 800 800
Subtotal 800 800
Energy7 Local Grids Development IEEN PP 600 600 8 Gas Generation from Waste IEEN AD 500 500
Subtotal 1,100 - 1,100
Transport9 Local Roads Development IETC PP 600 600
10 Subregional Transport Cooperation PE1 AD 400 400 Subtotal 1,000 - 1,000
Social Infrastructure 11 Support for Decentalized Education Management II AEEH AD 500 500 12 IT Development Strategy IRM AD 800 800 13 Decentralized Health Services III AEEH PP 500 500 14 Intergrated Social Service Delivery in Irian Jaya AEEH AD/PP 600 - 600 15 Institutional Structure and Regulatory Framework for Private Sector
Participation in Local Government DevelopmentAEWU AD 1,000 1,000
Subtotal 3,400 3,400
Others16 Implementation of Fiscal Decentralization PE1 AD 600 600 17 Support to Governance Partnership IRM AD 500 500
Subtotal 1,100 - 1,100 Total 10,100 10,100
a
b AD = advisory, PP = project preparatory.
Table A4.5: Technical Assistance Program 2003
Amount ($'000) A
ppendix 4, page 622
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEFN = Forestry and Natural Resources Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East); IETC = Transport and Communications Division (East); IRM = Indonesia Resident Mission; and PE1 = Programs Division East 1.
Responsible Type
Sector/Project Name Division a of TA b ADB Others Total2004Agriculture and Natural Resources
1 Rural Infrastructure for Tree Crops AEAR PP 700 - 700 2 Improving Market Access for Agricultural Products AEAR AD 600 600
Subtotal 1,300 1,300
Energy3 Institutionalizing the Clean Development Mechanism IEEN AD 600 600
Subtotal 600 600 Transport
4 Interisland Transport II IETC PP 1,000 1,000 Subtotal 1,000 1,000
Social Infrastructure5 Urban Poverty Reduction II AEWU PP 500 500 6 Water Supply and Sanitation Sector II AEWU PP 800 800 7 Waste Management & Environmental Protection for Urban Poor Communities AEWU AD 600 600 8 Management & Development of Metropolitan Cities to Benefit the Urban Poor AEWU PP 1,000 1,000 9 Decentralized Basic Education III AEEH PP 300 300
10 Decentralized Health Monitoring AEEH AD 500 500 11 Technical and Vocational Education AEEH PP 600 600
Subtotal 4,300 - 4,300
Others12 Gender Issues in Public Policy and Administration PE1/IRM AD 700 700 13 Policy Issues in Decentralization IRM/PE1 AD 500 500 14 Legal Empowerment for the Poor OGC AD 700 700
Subtotal 1,900 - 1,900 Total 9,100 - 9,100
a
b AD = advisory, PP = project preparatory.
Table A4.6: Technical Assistance Program 2004
Amount ($'000)
`
Appendix 4, page 7
23
AEAR = Agriculture and Rural Development Divison (East); AEEH = Education, Health and Population Division (East); AEWU = Water Supply, Urban Development and Housing Division (East); IEEN = Energy Division (East); IEFI = Financial Sector and Industry Division (East); IETC = Transport and Communications Division (East); IRM = Indonesia Resident Mission; OGC = Office of the General Counsel; and PE1 = Programs Division East 1.
Appendix 5 , page 124
ECONOMIC AND SECTOR WORK PROGRAM 2002-2004
Type of ESW Strategic or Operational Objective
Modality(staff, staffconsultant,
ADTA, RETA)1. Economic Work (includes macro- and microeconomic studies and country-level economic studies)
A. Annual Economic Report Annual Update of Country Economic and SocialPerformance
Staff Study
B. Geographic Focus for Country Operations Synergizing Investment, Maximizing OperationEfficiency, and Reducing Poverty
Staff Study
2. Thematic Work (includes studies that cut across sectors or countries and are related to ADB thematic and operationalpriorities)
A. Poverty Reduction
Development of Proxy Indicators for PovertyMeasurement
Poverty Reduction ADTA
B. Good Governance
Good Governance and Anticorruption Reforms Good Governance Staff StudySupport for Audit Reforms Good Governance ADTAAnticorruption Support Good Governance ADTALegal Empowerment for the Poor Good Governance ADTAInstitutions and Regulations for Private SectorParticipation in Local Development
Good Governance and Private Sector Development ADTA
Country Financial Accountability Strengthening Good Governance ADTA
C. Economic Growth and Supporting Recovery
Action Plan to Reduce the Impact of Droughts Economic Recovery, Rural Development Staff StudyEnergy Policy Economic Recovery, Good Governance Staff StudyRestructuring and Liberalization in the Financialand Industrial Sectors
Economic Recovery, Good Governance Staff Study
Support to IT Development Economic Recovery, Human and SocialDevelopment
Staff Study
Restructuring Strategy for the Power Sector Economic Recovery, Corporate Governance,Competitive Economy
Staff Study
D. Human and Social Development
Sustainable Social Protection Strategy Human and Social Development Staff Study
E. Gender and Development
Gender Issues in the Civil Service followingDecentralization
Gender and Development Staff Study
Gender Issues in Public Policy andAdministration
Gender and Development, Decentralization ADTA
F. Regional Development and Regional Equity
Central–Local Government Financial Relations Decentralization and Good Governance Staff StudyPolicy Issues in Decentralization Decentralization Staff Study
Designing and Implementing Decentralization:Lessons from Indonesia
Decentralization Staff Study
Appendix 5 , page 225
Type of ESW Strategic or Operational Objective
Modality(staff, staffconsultant,
ADTA, RETA)Development Financing under Decentralization Decentralization Staff StudyOptions of Fund Channeling Mechanisms forLocal Government Infrastructure
Decentralization and Infrastructure Investment Staff Study
Financing Mechanisms for Local GovernmentDevelopment
Decentralization ADTA
Managing Regional Disparities on Economicand Poverty Programs under Decentralization
Decentralization ADTA
G. Environmental Protection and NaturalResource ManagementCleaner Energy Use of Technologies for “BlueSkies”
Environmental Protection Staff Study
Environmental Degradation and the Poor Environmental Protection Staff StudyImplementation of ADB Water Policy Environmental Protection Staff StudyPrevention of Land Degradation and ProductiveUse of Degraded Land
Environmental Protection Staff Study
Improving Environmental Performance throughCleaner Production
Environmental Protection ADTA
Urban Degradation and EnvironmentalProtection
Environmental Protection and Human and SocialDevelopment
Staff Study
Institutionalizing the Clean DevelopmentMechanism
Environmental Protection ADTA
Waste Management and EnvironmentalProtection for the Urban Poor
Environmental Protection and Human and SocialDevelopment
ADTA
Assessment of Natural ResourcesManagement in a Decentralized Environment
Natural Resource Management andDecentralization
ADTA
H. Private Sector Development
Corporate Governance Strategy Private Sector Development and Good Governance Staff StudyPrivate Sector Participation in TransportProjects
Competitive Economy through Private SectorDevelopment and Infrastructure Investment
Staff Study
Private Sector Participation in Provision ofHealth and Education Services
Strengthening Private Sector Development andHuman and Social Development
Staff Study
Private Sector Participation in Infrastructureunder Decentralization
Private Sector Development, Decentralization, andInfrastructure Investment
ADTA
3. Sector Work (includes sector-specific analytical work)
A. Agriculture and Rural Development
Agriculture and Rural Development Strategy Rural Development ADTAIssues in Tree Crops Development Rural Development Staff StudyImproving Market Access for AgriculturalProducts
Rural Development, Competitive Economy ADTA
Research and Extension in the NewlyDecentralized Context
Rural Development, Human and SocialDevelopment, and Decentralization
ADTA
B. Forestry and Natural ResourcesIncreasing and Sustaining Income from Fishing Human and Social Development Staff Study
Appendix 5 , page 326
Type of ESW Strategic or Operational Objective
Modality(staff, staffconsultant,
ADTA, RETA)C. Education and Health
Public Health and Nutrition Human and Social Development ADTAImplementation of ADB Education Sector Policy Human and Social Development Staff Study
D. Water Supply and Urban DevelopmentRegulatory Framework for Water SupplySector
Human and Social Development, Good Governance ADTA
Reform of Water Enterprises Sector Human and Social Development, CorporateGovernance
ADTA
Public-Private-Community Partnerships inUrban Services for the Poor
Human and Social Development RETA
Urbanization and Shelter ProvisionApproaches and Options
Human and Social Development Staff Study
E. TransportStrategy for Local Roads Development Transport System and Rural Development Staff StudySubregional Transport Cooperation Transport System Development, Subregional
CooperationRETA
Interisland Transport Development Transport System and Infrastructure Investment Staff Study
F. EnergyEnergy for Rural Development Energy Development, Rural Development Staff StudyGas Generation from Waste Energy Development, Natural Resource
ManagementADTA
G. Finance and IndustryRestructuring Pension and Insurance Sectors Good Governance, Corporate Governance ADTAFinancial Sector Support Good Governance, Competitive Economy ADTA/PPTASME Development Strategy SME Development and Private Sector Development Staff Study
Improving Competition in the Financial andIndustrial Sectors
Good Governance, Competitive Economy ADTA
ADB = Asian Development Bank, ADTA = advisory technical assistance, ESW = economic and sector work program, IT = information technology, RETA = regional technical assistance, SME = small- and medium-scale enterprise.
Appendix 6, page 127
PROJECT SELECTION BRIEFS AND TA CONCEPT PAPERS
Table A6.1: Rural Microfinance
A. Data
Project Number:
Country: Indonesia
Sector: Agriculture
Subsector: Agriculture Support Services
Project Division: AEAR
Contact Person in Projects Division: A. Rijk
Programs Division: PE1, IRM
Tentative Loan Amount According to CSP: $150 million
Proposed Lending Modality: Project Loan
PPTA: Rural Microfinance (2001)
Proposed PPTA Amount: $1 million
Attached ADTA: None
Proposed ADTA Amount: n.a.
Start Predesign Phase:
Start Design Phase:
Approval Year According to CSP: 2002
Proposed Executing Agency: Ministry of AgricultureBank Rakyat Indonesia
Contact Person in Proposed Executing Agency:
B. Description
Brief Rationale of Project The rural population, about 68 percent of the totalpopulation, receives only 8 percent of total credit allocated.The project will address the lack of access to financialservices of rural communities and the business sector by (i)identifying rural communities’ need for financial services,and demand-supply gaps; (ii) strengthening the capacity ofexisting formal or semiformal financial institutions in ruralareas to provide services to the poor; (iii) broadening thespectrum of activities of rural financial institutions to movebeyond the provision of credit to include savings andinsurance, and to create conditions for profitable production;and (iv) helping the poor mobilize their own resources andgain access to financial services.
The project will (i) determine the extent and nature ofdemand and supply for rural financial services, and reviewtheir institutional framework; (ii) identify key constraints thatprevent the development of financial services for small ruralenterprises and for the poor; (iii) critically review andevaluate the performance of existing formal and semiformalfinancial institutions; and (iv) propose strategic options forthe Government. The project will carry out a variety ofparticipatory activities, including surveys, workshops, focusgroup discussions, and in-depth analysis of existing formaland semiformal financial institutions. Specific projectlocations will be selected during project formulation.
Appendix 6, page 228
(continuation)Summary of Preparatory Work by DMC and/or ESWby ADB or Others
Rural Development Strategy ADTA, 2001
Comparative Advantage of ADB in Proposed Project The ongoing Community Empowerment for RuralDevelopment TA, approved in 2000, gives support to ruralcredit in six provinces, providing ADB with new ideas andpilot mechanisms, as well as an understanding of the ruralfinancing system’s shortcomings.
ADB has a generally good record of financial sectorassistance and restructuring, most recently under theongoing financial and SME SDPs and related ADTAs.
Rationale and Scope of attached ADTA: n.a.
Development Objective (thematic priority) Human Development, Gender and Development, GoodGovernance, Private Sector Development, GrowthIntervention
Environmental Classification: TBD
Social Issues: Poverty, gender, equitable access to rural credit
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEAR = Agriculture and Rural DevelopmentDivision (East), CSP = country strategy and program, DMC = developing member country, ESW = economic andsector work, IRM = Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PPTA =project/program preparatory technical assistance, SME = small and medium enterprise, SDP = sector developmentprogram.
Appendix 6, page 329
Table A6.2: Participatory Irrigation Development and Management Sector
A. Data
Project Number:
Country:Indonesia
Sector:Agriculture and Natural Resources
Subsector:Irrigation
Project Division:AEFN
Contact Person in Projects Division:P. King
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$100 million
Proposed Lending Modality:Sector Loan
PPTA:Participatory Irrigation Development and ManagementSector Project (2001)
Proposed PPTA Amount:$500,000
Attached ADTA:None
Proposed ADTA Amount:n.a.
Start Predesign Phase:July 2001
Start Design Phase:November 2001
Approval Year According to CSP:2002
Proposed Executing Agency:Directorate General of Water Resources
Contact Person in Proposed Executing Agency:Ir. Napitupulu, Director for Technical Guidance
B. Description
Brief Rationale of Project: Irrigated agriculture is a major economic activity and sourceof income for the rural poor. About 80 percent of water usagein the country is devoted to irrigation. Increasing demand andcompetition for water from other sectors such as industriesand urban and rural water supply requires rational sectoralpolicies and a holistic approach in water resourcesdevelopment. While substantial sectoral policy reform hasbegun in recent years, the reforms’ successfulimplementation requires (i) stronger national and regionalinstitutions, (ii) an investment program to improve existingirrigation systems, and (iii) selective development of newirrigation systems. Small- and medium-scale irrigationsystems that can be operated and managed by farmerinstitutions without much Operation & Maintenance (O&M)support by the Government should be rehabilitated anddeveloped.
The proposed project aims to (i) strengthen national andregional institutional capacity for sustainable development ofwater resources, (ii) improve water-use efficiencies inirrigated agriculture, and (iii) increase agricultural productionand productivity. The project inputs will include technical andadvisory support to national and regional agencies, andrehabilitation and development of small- and medium-scaleirrigation systems with direct participation of farmers inplanning, implementation, and O&M.
Appendix 6, page 430
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Development of water resources, particularly of irrigation, hasbeen the subject of major studies by the Government and anumber of bilateral and multilateral development financinginstitutions, including ADB. A comprehensive study wasconducted in 1998-1999 under ADB-financed TA forIrrigation Development Options.
Comparative Advantage of ADB in Proposed Project:ADB has been closely involved in irrigation developmentthrough its loans and TA , totaling about $1.28 million. ADBhas provided important support to the Government throughLoan 1339: Capacity Building Project for Water Resources,which initiated major reforms in sectoral policies andinstitutional frameworks.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Sustainable Management of Natural Resources,Environmental Protection
Environmental Classification:TBD
Social Issues:Poverty, ethnic conflicts, and access to rural credit
ADB = Asian Development Bank, ADF = Asian Development Fund, ADTA = advisory technical assistance,AEFN = Forestry and Natural Resources Division (East), CSP = country strategy and program, DMC = developingmember country, ESW = economic and sector work, GEF = Global Environmental Facility, IRM = Indonesia ResidentMission, OCR = ordinary capital resources, NGO = nongovernment organization, O&M = Operations andMaintenance, PPTA = project/program preparatory technical assistance.
.
Appendix 6, page 531
Table A6.3: Coral Reef Rehabilitation and Management Project 2
A. Data
Project Number:
Country:Indonesia
Sector:Agriculture and Natural Resources
Subsector:Forestry and Natural Resources
Project Division:AEFN
Contact Person in Projects Division:W. Zhou
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$25 million
Proposed Lending Modality:Project Loan
PPTA:Coral Reef Rehabilitation and Management Project 2
Proposed PPTA Amount:$250,000 (TA 3001-INO, approved on 4 March 1998)
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:Fourth quarter, 2001
Start Design Phase:2002
Approval Year According to CSP:2002
Proposed Executing Agency:Indonesia Institute of Sciences (LIPI)
Contact Person in Proposed Executing Agency:A. N. Apu, Project Director, COREMAP
B. Description
Brief Rationale of Project:Coral reef degradation is serious throughout Indonesia.Nationwide surveys by LIPI have found that less than 30percent of coral reefs are in good condition. Millions ofcoastal inhabitants rely on the coral reefs for food, income,construction material, tourism, protection from coastal stormsand erosion, and pharmaceuticals and other chemicals. Thecoral reefs are also of educational and scientific interest.
The proposed project will help the Government (i) implementa national policy, management strategy, and master plan forcoral reef rehabilitation and management; (ii) strengthen thelegal framework and develop implementation guidelines andprocedures for coral reef conservation; (iii) strengthen andimprove the capabilities and governance of national and localgovernment agencies, non government organizations, andcommunities in coral reef management and socialdevelopment; (iv) conduct social and coral reef resourceassessment, and improve the coral reef research,information-gathering, and monitoring system; (v) implementcommunity-based coral reef management programs in Riau,and north and west Sumatra; (vi) organize coastalcommunities to participate in microenterprise and livelihooddevelopment; and (vii) provide TA and social services to poorcoastal communities.
Appendix 6, page 632
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
The Coral Reef Rehabilitation and Management Project is athree-phase, 15-year multifunder, multisectoral program ofthe Government, with funding from ADB, World Bank, GEF,and AusAID. The first phase was to create a viableframework to expand the program in phase 2. Outputs ofphase 1, including resource studies and policy development,will be major inputs and basis for the proposed project phase2.
Comparative Advantage of ADB in Proposed Project:Among international development organizations, ADB has themost experience in designing and implementing coastal andmarine resource management for rural development projectsin Indonesia and a wide range of other member countries.
Rationale and Scope of attached ADTA:TBD
Development Objective(thematic priority)
Core Poverty Intervention, Environmental Improvement
Environmental Classification:B
Social Issues:Indonesia’s extensive coastal areas are home to many poorcommunities. Millions of coastal inhabitants rely on the coralreefs for food, income, and construction material.Participatory consultation will involve target beneficiaries,people's organizations, nongovernment organizations, andlocal governments.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEFN = Forestry and Natural ResourcesDivision (East), AusAID = Australian Agency for International Development, COREMAP = Coral Reef Rehabilitationand Management Project, CSP = country strategy and program, DMC = developing member country, ESW =economic and sector work, GEF = global environmental facility, IRM = Indonesia Resident Mission, LIPI = IndonesiaInstitute of Sciences, NGO = nongovernment organization, PO = people's organization, PPTA = project/programpreparatory technical assistance
Appendix 6, page 733
Table A6.4: Nonbank Financial Governance Program (Cluster Program Loan)
A. Data
Project Number:
Country:Indonesia
Sector:Finance
Subsector:Nonbank Financial Sector (NBFS)
Project Division:IEFI
Contact Person in Projects Division:N. Chakwin, J. Rogers
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$350 million total, of which:
$200 million, first cluster (2001)$150 million, second cluster (2002)
Proposed Lending Modality:Program Loan
PPTA:
Proposed PPTA Amount:
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:2000
Start Design Phase:2001
Approval Year According to CSP:2002 for the second cluster
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency:TBD
B. Description
Brief Rationale of Project:To strengthen and develop the NBFS, financial marketproblems due to prolonged bank and corporate restructuringmust be solved, and capital to support economic growthprovided. Regulatory and supervisory structures must bestrengthened in line with international best practices andstandards to gain public confidence and attract foreigncapital.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Background ADTAs in the pension and insurance sectors (TA3116-INO: Reform of Pension and Provident Funds; and TA3119-INO: Regulatory Reform of the Insurance Industry) andESW by staff consultants
Comparative Advantage of ADB in Proposed Project:ADB focused extensively on the NBFS, as reflected in ADB’slead role in relation to international financial institutions asaddressed in recent letters of intent with the InternationalMonetary Fund.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Enhanced economic growth and good governance, and asound and diversified financial sector resulting from a broad-based NBFS with good governance
Appendix 6, page 834
(continuation)
Environmental Classification:B
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = economic and sector work, IEFI = Financial Sector and Industry Division(East), IRM = Indonesia Resident Mission, NBFS = non bank financial sector, PE1 = Programs Department (East),Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 935
Table A6.5: Power Transmission for Regional Development
A. Data
Project Number:
Country: Indonesia
Sector: Power Sector
Subsector:
Project Division: IEEN
Contact Person in Projects Division: A. Terway
Programs Division: IRM, PE1
Tentative Loan Amount According to CSP: $150 million from ADB, $100 million from cofinancing
Proposed Lending Modality: Project Loan
PPTA: Power Transmission for Regional Development (2001)
Proposed PPTA Amount: $600,000
Attached ADTA: None
Proposed ADTA Amount: None
Start Predesign Phase:
Start Design Phase:
Approval Year According to CSP: 2002
Proposed Executing Agency: State Electricity Company (PLN)
Contact Person in Proposed Executing Agency: H. Situmeang, Director, Corporate Planning
B. Description
Brief Rationale of Project Central Java’s power demand outstrips the capacity oftransmission and distribution substations, hamperinggeographically balanced economic development. Theproposed project will include high-priority components ofPLN's least-cost transmission development plan, mainly inJava and Bali. These transmission subprojects are essentialfor unconstrained power flows from surplus to deficit regions.The subprojects will also help power from IPP-built powerplants and promote private participation. The project willpromote regional development by augmenting power supplyto poor regions.
The project consists of (i) part A: transmission lines andassociated substations in Central Java; (ii) part B:transmission lines for power evacuation from Tanjung Jati BPower Plant; (iii) part C: transmission lines for geothermal-based IPPs; and (iv) part D: regional human resourcedevelopment.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others
PLN’s power generation and transmission capacity additionplan
Comparative Advantage of ADB in Proposed Project ADB has extensive experience in power projects inIndonesia. ADB has long involvement with power sectorrestructuring and has good working relationships with sectoragencies.
Rationale and Scope of attached ADTA: n.a.
Development Objective (thematic priority) Economic Growth
Appendix 6, page 1036
(continuation)Environmental Classification: A
Social Issues: Resettlement of people at sites selected for transmissionsubstations, procurement of land for constructingtransmission towers, and right-of-way for stringingtransmission lines
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = economic and sector work, IEEN = Energy Division (East), Indonesia ResidentMission, PE1 = Programs Department (East), Division 1, PLN = Perusahaan Listrik Negara (State ElectricityCompany), PPTA = project/program preparatory technical assistance.
Appendix 6, page 1137
Table A6.6: Road Rehabilitation Sector 2
A. Data
Country: IndonesiaSector: Transport and CommunicationSubsector: Roads and Road TransportProject Division: IETCContact Person in Projects Division: P. GiraudPrograms Division: IRM, PE1Tentative Loan Amount According toCSP:
$150 million
Proposed Lending Modality: Sector LoanPPTA: Road Rehabilitation 2 (2001)Proposed PPTA Amount: $610,000Attached ADTA: NoneProposed ADTA Amount: n.a.Start Predesign Phase: 2001Start Design Phase: 2001Approval Year According to CSP: 2002Proposed Executing Agency: Directorate General of Regional Infrastructure, Ministry of Human
Settlements and Regional DevelopmentContact Person in ProposedExecuting Agency:
B. Project Description
Brief Description of Rationale ofProject
Due to the 1997-1999 financial crisis, the road sector has receivedinsufficient allocation of public expenditures, and the road network hassuffered considerably from lack of adequate routine and periodicmaintenance. The project is the second sector loan formulated to help theGovernment (i) rehabilitate high-priority links of the road network to facilitateeconomic recovery and reduce poverty, and (ii) implement road traffic andtransport policies formulated under the first sector loan.
Summary of Preparatory Work byDMC and/or ESW by ADB or Others
(i) PPTA outputs(ii) ESW on private sector participation in transport projects(iii) Outputs from the ADB-financed Road Rehabilitation 1 Sector Loan(iv) Close coordination between the World Bank and JBIC
Comparative Advantage of ADB inProposed Project
ADB has established a satisfactory record of support to road transportation.The proposed second road rehabilitation project directly builds onachievements of the first.
In Case its attached ADTA isProposed, Indicate Rationale andScope
n.a.
Development Objective (thematicpriority)
Other Development Intervention, Private Sector Development
Environmental Classification Project B
Social Issues No resettlement is anticipated. However, the project will be closelysupervised to prevent possible social disturbance.
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = economic and sector work, GOI = Government of Indonesia, IETC = Transportand Communications Division (East), IRM = Indonesia Resident Mission, JBIC = Japan Bank for InternationalCooperation, PE1 = Programs Department (East), Division 1, PPTA = project/program preparatory technicalassistance, WB = World Bank.
Appendix 6, page 1238
Table A6.7: Urban Poverty Reduction Project
A. Data
Project Number: 33401-01
Country: Indonesia
Sector: Social Infrastructure
Subsector: Urban Development
Project Division: AEWU
Contact Person in Projects Division: C. Andrews, A. Williams
Programs Division: IRM, PE1
Tentative Loan Amount According to CSP: $150 million
Proposed Lending Modality: Sector Loan
PPTA: 3646-INO: Urban Poverty Reduction (2001)
Proposed PPTA Amount: $800,000
Attached ADTA: None
Proposed ADTA Amount: n.a.
Start Predesign Phase: III 2001
Start Design Phase: I 2002
Approval Year According to CSP: 2002
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD)
Contact Person in Proposed Executing Agency: B. Arief, Director General, DGURD
B. Description
Brief Rationale of Project The speed at which the urban poverty rate rose from late1997 to early 1999, and then fell during the subsequent sixmonths, underscores the vulnerability of the large overhangof near-poor who lie just above the poverty line. The sectorproject will help district governments establish povertyreduction systems and programs in partnership with theGovernment, civil society, and private sector to reduce thisvulnerability in a sustainable manner.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others
Recently completed ADB TA 3326-INO on Guidelines forUrban Sector Development in a Decentralized Environmentrepresents a substantial and directly relevant preparatoryESW effort. Other preparatory work includes (i) the UrbanSector Profile Study–INO (ADB staff consultant, January2001), (ii) Housing Finance for the Poor–INO (ADB staffconsultant, Jan 2001), and the Regional DevelopmentAccount and Alternative for Financing Urban Infrastructure–INO (ADB staff consultant, Jan 2001).
Comparative Advantage of ADB in Proposed Project: ADB has a long and relatively successful record ofsupporting urban development in large and medium-sizecities in Indonesia, particularly using the Government’sintegrated urban development program (UDP) approach.ADB is also a major external contributor to theGovernment’s decentralization program, giving policydevelopment support.
Appendix 6, page 1339
(continuation)Rationale and Scope of attached ADTA: n.a.
Development Objective (thematic priority) The sector project will reduce urban poverty in large andmedium-size cities throughout the southern regions ofCentral and West Java, and the whole of Sumatra. Localgovernments, in partnership with the Government, civilsociety, and the private sector, will improve and expand thechoices of the urban poor, specifically for incomeopportunities, basic urban services, and shelter.
Environmental Classification: B
Social Issues The project will be a core poverty intervention. While incomeshad been increasing for years in urban Indonesia, a largeproportion of the population remained just above the povertyline. Urban poverty incidence increased markedly after the1997 financial crisis.
The project will develop a poverty reduction strategicframework that focuses on issues determined by the poorthemselves. The process of identifying, planning, andimplementing urban poverty reduction systems and programswill be highly participatory. The urban poor are expected tobenefit from improved access to basic urban services andimproved local environmental conditions, improved and moresecure livelihood and income opportunities, and conduciveconditions for investing in shelter upgrading and housing.Inclusive local decision-making processes will be establishedand/or strengthened.
ADB = Asian Development Bank, ADF = Asian Development Fund, ADTA = advisory technical assistance, AEWU =Water Supply, Urban Development, and Housing Division (East), CSP = country strategy and program, DGURD =Directorate General of Urban and Rural Development, DMC = developing member country, ESW = economic andsector work, IRM = Indonesia Resident Mission, MSRI = Ministry of Settlements and Regional Infrastructure, OCR =ordinary capital resources, PE1 = Programs Department (East), Division 1, PPTA = project/program preparatorytechnical assistance.
Appendix 6, page 1440
Table A6.8: Water Supply and Sanitation Sector
A. Data
Project Number:29448-01
Country:Indonesia
Sector:Social Infrastructure
Subsector:Water Supply and Sanitation
Project Division:AEWU
Contact Person in Projects Division:A. Williams, A. Weitz
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$100 million
Proposed Lending Modality:Sector Loan
PPTA:TA3137-INO: Water Supply and Sanitation Sector Project(2000)
Proposed PPTA Amount:$600,000
Attached ADTA:None
Proposed ADTA Amount:n.a.
Start Predesign Phase:December 1998
Start Design Phase:September 2001
Approval Year According to CSP:2002
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD)
Contact Person in Proposed Executing Agency:B. Arief, Director General, DGURD
B. Description
Brief Rationale of Project:Many water and sanitation entities have dilapidated physicalfacilities and have difficulty providing safe, reliable, andadequate drinking water and sanitation services tocustomers, particularly the urban poor. The recentunprecedented economic and social crisis has exacerbatedthis situation. The proposed water supply and sanitationsector project is needed to strengthen the water supply andsanitation systems and prevent further deterioration. Byrehabilitating infrastructure and improving the operational andmanagement capabilities of water and sanitation enterprises,the project will make services more efficient and reliable.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
ADB provided PPTA for the project. The TA was designedbefore the financial crisis affected Indonesia and wascompleted in March 2000 before the Government introduceddevolution through Law 22 on Regional Autonomy. Muchmore project preparation needs to be done to reflectIndonesia’s current economic and financial circumstancesand the new institutional framework that has, among others,devolved authority for the provision and management ofwater and sanitation services to the local governments. ADBis helping the Government prepare the water supply andsanitation policy framework, the first draft of which isexpected by July 2001.
Appendix 6, page 1541
(continuation)
Comparative Advantage of ADB in Proposed Project:ADB has a long and relatively successful track record ofworking in the Indonesian water supply and sanitation sectorfor rural and urban areas. ADB is engaged in policy dialoguefor the sector and has established good working relationshipswith national and local sector agencies.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
The project aims to improve public health standards, livingconditions, and the environment by providing water supplyand environmental sanitation services. The project will helplocal governments and water enterprises enhance theircapability and capacity to deliver and expand their services,especially to the urban poor. The physical scope will includerehabilitation of water supply and sanitation facilities in high-poverty regional and secondary cities. Emphasis will be onimproving services, operational procedures, andmanagement of water enterprises (PDAMs).
Environmental Classification:B
Social Issues:The project will provide better access to safe and reliablewater supply and effective wastewater disposal, leading toimproved living standards, better public health, quality of life,and productivity.
Benefits will include better access to reliable and adequatesupplies of good quality water, improved health, better qualityof life, and a cleaner environment for the residents ofparticipating medium-size and small towns. Localgovernments in high-poverty areas will be included in theproject.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEWU = Water Supply, UrbanDevelopment, and Housing Division (East), CSP = country strategy and program, DGURD = Directorate General ofUrban and Rural Development, DMC = developing member country, ESW = Economic and sector work, IRM =Indonesia Resident Mission, MSRI = Ministry of Settlements and Regional Infrastructure, PE1 = ProgramsDepartment (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 1642
Table A6.9: Decentralized Health Services 2
A. Data
Project Number:
Country:Indonesia
Sector:Social Infrastructure
Subsector:Health and Nutrition
Project Division:AEEH
Contact Person in Projects Division:J. Jeugmans
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project or Sector Loan
PPTA:Decentralized Health Services 2 (2001)
Proposed PPTA Amount:$1 million
Attached ADTA:TBD
Proposed ADTA Amount:n.a.
Start Predesign Phase:2001
Start Design Phase:2001
Approval Year According to CSP:2002
Proposed Executing Agency:Ministry of Health and Social Welfare (MOHSW)District Governments
Contact Person in Proposed Executing Agency:E. Soetarto, Secretary General, MOHSWHeads of District Governments
B. Description
Brief Rationale of Project:On 1 January 2001, the Government decentralized healthservices management to local governments (districts). Whiledecentralization allows better targeting of resources to thepoor, the technical and managerial capacities of localgovernments and the degree of community participation mustbe improved to fully realize this potential.
ADB’s Decentralized Health Services (DHS) Project(approved 14 December 2000) will support operationalmanagement and service quality improvements in 50 districtsand 12 cities in seven provinces.
DHS-2 will support more districts and provinces throughsimilar strategies, incorporating lessons learned fromimplementation of the first DHS.
To strengthen local capacity in social sectors and to integratesocial services planning and management at the local level,geographical coverage of DHS-2 will consider povertyincidence and complementarity with ongoing and/or futureADB-financed health and education sector projects.
Appendix 6, page 1743
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
� Health Strategy in a Postcrisis, Decentralizing Indonesia(World Bank)
� PPTA outputs� Outputs of ongoing ADB-financed TA� Decentralized social services delivery� Monitoring and evaluation of the Social Protection Sector
Development Program (SPSDP)� Monitoring and evaluation of the Health and Nutrition
Sector Development Program (HNSDP)� Lessons learned from ongoing DHS and other health
sector projects� Close coordination among GTZ, JICA, WHO, UNICEF,
World Bank
Comparative Advantage of ADB in Proposed Project:Through the Social Protection and Health and NutritionSector Development programs, ADB pioneered direct transferof loan funds to districts and health centers as block grants.The proposed project directly builds on achievements ofSPSDP and HNSDP.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Poverty Intervention, Human Development
Environmental Classification:C
Social Issues:
ADB = Asian Development Bank, ADF = Asian Development Fund, ADTA = advisory technical assistance, AEEH =Education, Health, and Population Division (East), CSP = country strategy and program, DHS = Decentralized HealthServices, DMC = developing member country, ESW = economic and sector work, GTZ = Deutsche Gesellschaft fürTechnische Zusammenarbeit, (German Agency for Technical Cooperation), HNSDP = Health and Nutrition SectorDevelopment Program, IRM = Indonesia Resident Mission, JICA = Japan International Cooperation Agency, MOHSW= Ministry of Health and Social Welfare, PE1 = Programs Department (East), Division 1, PPTA = project/programpreparatory technical assistance, SPSDP = Social Protection Sector Development Program, UNICEF = UnitedNations Children's Fund, WB = World Bank, WHO = World Health Organization.
Appendix 6, page 1844
Table A6.10: Sustainable Capacity Building for Decentralization
A. Data
Project Number:
Country: Indonesia
Sector: Governance
Subsector: Decentralization
Project Division: IRM
Contact Person in Projects Division: S. Chatterjee
Programs Division: IRM, PE1
Tentative Loan Amount according to CSP: $30 million
Proposed Lending Modality: Project Loan
PPTA: Capacity Building for Decentralization (2001)
Proposed PPTA Amount: $800,000
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:July 2001
Start Design Phase:March 2002
Approval Year According to CSP:2002
Proposed Executing Agency:Directorate General of Regional Autonomy, Ministry of HomeAffairs and Regional Autonomy
Contact Person in Proposed Executing Agency:Sudarsono, Director GeneralM. Suwandi, Director for Capacity Building
B. Description
Brief Rationale of Project:With decentralization, all developmental and administrativeresponsibilities have been devolved to local governments.Local government staff need to upgrade their capacitiesconsiderably to discharge their functions effectively.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
The project will support the National Framework for CapacityBuilding, which has been developed as a combinedGovernment-funded effort, supported principally by studiesconducted by GTZ, USAID, AusAid, etc.
Comparative Advantage of ADB in Proposed Project:ADB has been involved in capacity building for localgovernments and is a lead funder in the area.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
Good Governance, Human Development
Environmental Classification:C
Social Issues:Provision of basic services for poverty reduction followingdecentralization.
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = Economic and sector work, GTZ = Deutsche Gesellschaft für TechnischeZusammenarbeit (German Agency for Technical Cooperation), IRM = Indonesia Resident Mission, PE1ProgramsDepartment (East), Division 1, PPTA = project/program preparatory technical assistance, USAID = United StatesAgency for International Development.
Appendix 6, page 1945
Table A6.11: Poverty Reduction through Land Rehabilitation and Management
A. Data
Project Number:
Country:Indonesia
Sector:Agriculture and Natural Resources
Subsector:Forestry and Natural Resources
Project Division:AEFN
Contact Person in Projects Division:S. Sahajananthan
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project Loan
PPTA:Poverty Reduction through Land Rehabilitation andManagement (2002)
Proposed PPTA Amount:$800,000
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:2001 (Fourth quarter)
Start Design Phase:2002 (First quarter)
Approval Year According to CSP:2002
Proposed Executing Agency:Ministry of Forestry
Contact Person in Proposed Executing Agency:TBD, Director General of Forestry
B. Description
Brief Rationale of Project:Indonesia has about 20 million hectares of degraded land,mostly forests and watersheds, and failed transmigrationareas in the outer islands. Many of these areas are in or nearcritical ecosystems. The continuing degradation threatens thelivelihood of forest communities, forcing them to engage inillegal logging or slash-and-burn agriculture. Rehabilitationand management of these lands will provide localcommunities with opportunities to generate sustainableincome and conserve critical ecosystems. The primaryproject objective is reduction in poverty among people livingon degraded forestlands. The scope will include (i) increasingthe resource potential of selected degraded forestlands, (ii)creating appropriate agriculture-based livelihood activities,(iii) facilitating community-led integrated spatial planning andmanagement of degraded forestlands and criticalecosystems, and (iv) building capacity for fire fighting andprevention and for efficient decentralized administration.Because this project will help conserve critical forestecosystems, it should also qualify for Global EnvironmentFund (GEF) financing.
Appendix 6, page 2046
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Much of the preparatory work for the project has been doneunder various economic and sector work carried out by ADB,particularly AEFN, in Indonesia and in the region. The workincludes ADTA 2999-INO on Fire Prevention and DroughtManagement, regional TA by CIFOR on Planning forSustainability of Forests through Adaptive Co-management,and the regional TA by ICRAF on Policy Analysis forSustainable Agroforestry Systems.
Comparative Advantage of ADB in Proposed Project:ADB has extensive experience in implementing forestry, ruraldevelopment, and biodiversity conservation projects inIndonesia. Projects include the First and Second LandResource Evaluation and Planning Loans (730-INO and1099-INO), Forestry Development Project (Loan 762-INO),Segara Ankan Conservation and Development Project (Loan1475), and Biodiversity Conservation Project. Lessonslearned from these projects will be considered in formulatingthe project.
Rationale and Scope of attached ADTA:TBD
Development Objective(thematic priority)
Core Poverty Intervention, Environmental Improvement
Environmental Classification:B
Social Issues:The targeted project areas include a number of communitiesliving near the forest margins. Social issues include (i)resource accessibility and management by localcommunities, (ii) control of illegal logging and shiftingcultivation, and (iii) enforcement of regulatory measures inresource management.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEFN = Forestry and Natural ResoucesDivision (East), CSP = country strategy and program, DMC = developing member country, ESW = Economic andsector work, ICRAF = International Center for Research in Agroforestry, IRM = Indonesia Resident Mission, PE1 =Programs Department (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 2147
Table A6.12: Community Empowerment for Rural Development 2
A. Data
Project Number:
Country: Indonesia
Sector: Agriculture
Subsector: Rural Development
Project Division: AEAR
Contact Person in Projects Division:
Programs Division: IRM, PE1
Tentative Loan Amount According to CSP: $150 million
Proposed Lending Modality: Project Loan
PPTA: Community Empowerment for Rural Development (2002)
Proposed PPTA Amount: $500,000
Attached ADTA: None
Proposed ADTA Amount: n.a.
Start Predesign Phase: 2001
Start Design Phase: 2002
Approval Year According to CSP: 2003
Proposed Executing Agency: Directorate General of Rural Community EmpowermentMinistry of Home Affairs and Regional Autonomy
Contact Person in Proposed ExecutingAgency:
B. Description
Brief Rationale of Project The project aims to increase real incomes of the poor, particularly ofrural communities on the periphery of regional growth centers. Theproject’s objectives are to (i) empower rural communities bystrengthening their capacity to plan and manage their owndevelopment activities; and (ii) support investments, foster rural-urbanlinkages, and establish rural infrastructure to promote agriculturalproductivity and off-farm business enterprises. The project is anexpansion of the Phase 1 Project (Loans 1765-INO and 1766-INO),approved on 20 October 2000 for $115 million.
The Phase 1 Project covers 11 districts in 6 provinces, while thePhase 2 Project will cover 40 districts in 20 provinces. Phase 1supports community-based savings and loan organizations andtrains personnel to support micro- and small enterprises. Ruralinfrastructure is provided in these districts to develop rural urbanlinkages to support a dynamic rural development process. Phase 1devolves development resources to local governments andstrengthens the institutional and human resource capacity to enablerural communities to plan and manage local development initiatives.A PPTA will prepare the expanded investment project foreseenunder phase 1. The PPTA will (i) assess the feasibility of expandingthe development model to more provinces, (ii) identify additionalcapacity-building needs, and (iii) recommend changes in projectdesign. The investment project will be undertaken in 2003 or 2004.The project will directly increase the incomes of poor families throughrural microenterprise and small-scale enterprise development, andimprove linkages to markets and social and health services byimproving rural infrastructure.
Appendix 6, page 2248
(continuation)Summary of Preparatory Work by DMCand/or ESW by ADB or Others
(i) PPTA outputs(ii) Outputs from the ADB-financed Community Empowerment forRural Development 1
(iii) ADTA rural development strategy
Comparative Advantage of ADB inProposed Project
In Case its attached ADTA is Proposed,Indicate Rationale and Scope
n.a.
Development Objective (thematic priority) Human Development, Gender and Development, Good Governance,Private Sector Development, Growth Intervention
Environmental Classification Project TBD
Social Issues Poverty, ethnic conflicts, and access to rural credit
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEAR = Agriculture and Rural DevelopmentDivision (East), CSP = country strategy and program, DMC = developing member country, ESW = economic andsector work, IRM = Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PPTA =project/program preparatory technical assistance.
Appendix 6, page 2349
Table A6.13: Financial Sector Support
A. Data
Project Number:
Country:Indonesia
Sector:Finance
Subsector:Nonbank Financial Sector
Project Division:IEFI
Contact Person in Projects Division:J. Rogers
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:TBD
PPTA:Financial Sector Support (2002)
Proposed PPTA Amount:$1 million
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:2001
Start Design Phase:2002
Approval Year According to CSP:2003
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency:TBD
B. Description
Brief Rationale of Project:In 2001–2002, ADB is to extensively support thestrengthening of financial regulatory and supervisorystructures according to international best practices andstandards. Support includes a planned nonbank financialgovernance cluster program loan, and TA to establish anintegrated financial services supervisory institution (FSSI).
The new stringent regulatory and supervisory standards willfocus on weakness already evident in the nonbank financesector (NBFS). A number of insurance companies are weakfinancially and have difficulty meeting minimum capitalrequirements. The opening of the ASEAN market in 2003 willpressure insurance companies to compete internationally.Government-managed pension and social insuranceschemes’ insufficient reserves and funds threaten toundermine the viability of several schemes. TheGovernment's extensive ownership and management roles inthe insurance and pension sectors mean that Governmentmust help resolve the difficulties in a number of individualinstitutions as well as ensure the operation of the enhancedregulatory and supervisory structure.
The project will help restructure the NBFS and therebyintroduce enhanced regulation and supervision standards inthe sector.
Appendix 6, page 2450
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
(i) ESW by staff and staff consultants
(ii) Development of Financial Services SupervisoryInstitutions, ADTA 2001
(iii) Restructuring of Pension and Insurance Sectors, ADTA2002
(iv) Coordination with the International Monetary Fund (IMF)and World Bank
Comparative Advantage of ADB in Proposed Project:Besides improving NBFS regulation and supervision, ADB isthe leading funding agency in this area as stated in recentletters of intent with IMF.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
The project aims to (i) enhance economic growth and goodgovernance, (ii) support the Government's ownership andmanagement of selected nonbank financial institutions, (iii)facilitate their privatization where appropriate, and (iv)enhance prudential standards under the strengthenedregulatory and supervisory structure in the financial sector.
Environmental Classification:
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, ASEAN = Association of Southeast AsianNations, CSP = country strategy and program, DMC = developing member country, ESW = economic and sectorwork, FSSI = financial services supervisory institution, IEFI = Financial Sector and Industry Division (East), IMF =International Monetary Fund, IRM = Indonesia Resident Mission, LOI = letter of intent, PE1 = Programs Department(East), Division 1, PPTA = project/program preparatory technical assistance, WB = World Bank.
Appendix 6, page 2551
Table A6.14: Interisland Transport
A. Data
Project Number:
Country: Indonesia
Sector: Transport and Communication
Subsector: Ports and Shipping, Airport and Civil Aviation
Project Division: IETC
Contact Person in Projects Division: P. Giraud, M. Rehman
Programs Division: IRM, PE1
Tentative Loan Amount according to CSP: $150 million
Proposed Lending Modality: Project Loan
PPTA: Interisland Transport (2002)
Proposed PPTA Amount: $500,000
Attached ADTA: TBD
Proposed ADTA Amount: TBD
Start Predesign Phase: 2001
Start Design Phase: 2002
Approval Year According to CSP: 2003
Proposed Executing Agency: Ministry of Communications
Contact Person in Proposed Executing Agency: TBD
B. Description
Brief Rationale of Project: Interisland transport services, which serve poor, remoteareas, lack maintenance funds and have many unprofitableroutes. To accommodate increasing port and airport traffic,the Government must (i) reorganize transport services, (ii)rehabilitate infrastructure, and (iii) develop new facilities. Theproject will help the Government reorganize interislandtransport services and their connection to intraislandtransport networks, and rehabilitate and develop small portsand airports to facilitate economic recovery and reducepoverty in selected provinces. The project may includepreparation of public-private partnerships, combining, forexample, private sector provision of interisland transportservices and public sector capital investment. The projectshould also include institutional strengthening and capacitybuilding of port and airport authorities.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Discussions with Government and a staff study on interislandtransport development are to be conducted.
Comparative Advantage of ADB in Proposed Project: ADB has good knowledge of, and ongoing and previousinvolvement in, the port and airport subsectors. No otherimportant funders are involved in the sector.
Rationale and Scope of attached ADTA: TBD
Development Objective(thematic priority) Economic Growth
Appendix 6, page 2652
(continuation)
Environmental Classification: TBD
Social Issues: Provide better access to national economic centers for poor,remote island populations
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program,DMC = developing member country, ESW = economic and sector work, IETC = Transport and CommunicationsDivision (East), IRM = Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PPTA =project/program preparatory technical assistance.
Appendix 6, page 2753
Table A6.15: Clean Energy for Blue Sky
A. Data
Project Number:
Country:Indonesia
Sector:Energy
Subsector:
Project Division:IEEN
Contact Person in Projects Division:H. Wang
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project Loan
PPTA:Cleaner Energy Use for Blue Sky (2002)
Proposed PPTA Amount:$600,000
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:
Start Design Phase:
Approval Year According to CSP:2003
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency:
B. Description
Brief Rationale of Project:Deteriorating air quality is impairing the health and welfare ofthe population, in particular the 10 million residents ofJakarta. The primary causes of air pollution - emissions fromvehicles and industrial processes - continue to grow witheconomic development. Emissions caused by the increasinguse of petroleum fuels need to be controlled to avoid erosionof the gains of economic and social development. Theobjective of the project is to promote the use of clean fuelsand improve air quality through abatement of mobile andstationary sources of air pollution. The project may bedesigned to (i) promote the use of LNG for public transportvehicles in urban areas and along busy highways connectingimportant cities; (ii) reduce air pollution from industry andpower generation through the use of clean energy andimprovement of fuel quality; (iii) provide basic infrastructureand services; (iv) strengthen capacity of the institutionsinvolved, including to monitor emissions and air quality; and(v) engage the Government in policy dialogue on regulatoryissues.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Comparative Advantage of ADB in Proposed Project:
Rationale and Scope of attached ADTA:
Appendix 6, page 2854
(continuation)
Development Objective (thematic priority)Sound management of environment
Environmental Classification: TBD
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program,DMC = developing member country, ESW = economic and sector work, IRM = Indonesia Resident Mission, LNG =liquefied natural gas, PPTA = project/program preparatory technical assistance.
Appendix 6, page 2955
Table A6.16: Power Sector Development 2
A. Data
Project Number:
Country:Indonesia
Sector:Energy
Subsector:Power
Project Division:IEEN
Contact Person in Projects Division:A. Terway
Programs Division:PE1
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Sector Loan
PPTA:Power Sector Development Program 2 (2002)
Proposed PPTA Amount:$800,000
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:
Start Design Phase:
Approval Year According to CSP:2003
Proposed Executing Agency:Directorate General of Electricity and Energy UtilizationMinistry of Mines and Energy and State Electricity Company(PLN)
Contact Person in Proposed Executing Agency:L. Sumiarso, Director General, Electricity and Energy Utilization
B. Description
Brief Rationale of Project:The power sector needs to be restructured to maximizeefficiency gains and provide benefits to consumers, includingthe poor. Small consumers, including poor households, aremost vulnerable to any market structural weakness, so it hasto be identified and rectified at an early stage. The proposedproject would promote the ongoing power sector reforms andensure support to the Government in establishing a well-structured, competitive electricity market. The strategicobjectives of the proposed program loan are to support powersector reforms by (i) enhancing private sector participation inthe power sector by preparing the framework for privatizationof PLN successor companies; (ii) strengthening the capabilityof the newly established regulatory body to supervise theelectricity market and participating companies’ practices; and(iii) rectifying other structural weakness, including lack oftransparency and consultation. The project loan aims toremove constraints on transmission and distribution of power.The components will be determined after the release of thesecond tranche of the ongoing program loan.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Appendix 6, page 3056
(continuation)
Comparative Advantage of ADB in Proposed Project: ADB has extensive experience in power projects inIndonesia, long involvement in power sector restructuring,and good working relationships with sector agencies.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
Economic Growth
Environmental ClassificationTBD
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program,DMC = developing member country, ESW = economic and sector work, IEEN = Energy Division (East), IRM =Indonesia Resident Mission, PLN = Perusahaan Listrik Negara (State Electricity Company), PPTA = project/programpreparatory technical assistance.
Appendix 6, page 3157
Table A6.17: Secondary Cities Urban Management and Development Sector
A. Data
Project Number:35141 (PPTA and Loan)
Country:Indonesia
Sector:Social Infrastructure
Subsector:Urban Development
Project Division:AEWU
Contact Person in Projects Division:C. Andrews, A. Williams
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Sector Loan
PPTA:Secondary Cities Urban Management and Development(2002)
Proposed PPTA Amount:$800,000
Attached ADTA:None
Proposed ADTA Amount:n.a.
Start Predesign Phase: 2003 (First Quarter)
Start Design Phase:2003 (Third Quarter)
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD)
Contact Person in Proposed Executing Agency:B. Arief, Director General, DGURD
B. Description
Brief Rationale of Project:The project will help local governments provide efficientmunicipal services and facilitate urban infrastructure andeconomic development programs and processes, inpartnership with the Government, civil society, and the privatesector. The country strategy and program identifies thefollowing as major constraints to urban and nationaleconomic development and poverty reduction: (i)weaknesses in urban local governments and (ii) inadequateprivate sector investment in urban utility services.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
The draft final urban sector profile study identifies the needand opportunity for ADB assistance to secondary cities.
Comparative Advantage of ADB in Proposed Project:ADB has a long and relatively successful track record ofworking in the rural and urban Indonesian water supply andsanitation sector. ADB is engaged in policy dialogue with theGovernment on the sector and has good workingrelationships with national and local sector agencies.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
Urban residents, businesses, and other stakeholders will beparticipating in and benefiting from urban development andmanagement decisions to increase access to urban basicservices and income and business opportunities.
Environmental Classification:B
Appendix 6, page 3258
(continuation)
Social Issues:The largest absolute and relative increases in povertyincidence resulting from the 1997 economic crisis occurred incities. Population growth rates are highest in cities,exacerbating pressures on urban services. But cities retainthe highest potential for rapid economic growth and jobcreation. The social and economic well-being of the nationdepends fundamentally on urban social and economicdevelopment, which must now occur in the context of the“new regional autonomy,” where decisions affecting cities aremade by cities themselves and not by the Government. Acore social issue is how to ensure that these decisions reflectthe preferences of the majority, contribute most to thecommon good, and protect the vulnerable.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEWU = Water Supply, UrbanDevelopment, and Housing Division (East), CSP = country strategy and program, DGURD = Directorate General ofUrban and Rural Development, DMC = developing member country, ESW = economic and sector work, IRM =Indonesia Resident Mission, MSRI = Ministry of Settlements and Regional Infrastructure, PE1 = ProgramsDepartment (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 3359
Table A6.18: Decentralized Basic Education 2
A. Data
Country: IndonesiaSector: Social InfrastructureSubsector: EducationProject Division: AEEHContact Person in Projects Division: I. Matsumoto, A. InagakiPrograms Division: IRM, PE1Tentative Loan Amount According toCSP:
$100 million
Proposed Lending Modality: Project or Sector LoanPPTA: Decentralized Basic Education Project 2 (2002)Proposed PPTA Amount: 300,000Attached ADTA: NoneProposed ADTA Amount: n.a.Start Predesign Phase: 2002Start Design Phase: 2002Approval Year According to CSP: 2003Proposed Executing Agency: Ministry of National Education (MONE) and Ministry of Religious Affairs
(MORA)Contact Person in ProposedExecuting Agency:
I. Djati, Director General for Primary and Secondary Education, MONEH. Husni Rahim, Director General for Islamic Schools, MORA
B. Project Description
Brief Rationale of Project On 1 January 2001, the Government decentralized education sectormanagement to local governments (districts). For decentralization to betterextend resources to the poor, the local governments’ technical andmanagerial capacities must be improved and community participationincreased. The National Development Program (PROPENAS) 2001–2005prioritizes reducing inequity in basic education provision and underscoresintroducing school boards as the key local entities for education governance.
Through the Decentralized Basic Education Project–1 (DEBP–1), ADB willsupport 21 districts in three provinces. DBEP–2 will support more districtsand provinces through similar strategies, which will be improved based onlessons from DBEP–1. To strengthen local capacity in social sectors andintegrate social services planning and management at the local level,geographical coverage of DBEP–2 will consider poverty factors andcomplementarity with ongoing and/or future ADB-financed health sectorprojects.
Summary of Preparatory Work byDMC and/or ESW by ADB or Others
(i) Education Sector Review (from crisis to recovery, by the World Bank)(iii) PPTA outputs(iiii) Outputs from ongoing ADB-financed TAs (Decentralized Social ServicesDelivery; Monitoring and Evaluation of SPSDP)(iv) Lessons learned from ongoing basic education projects(v) Close coordination between GTZ, JICA, UNESCO, UNICEF, and WorldBank
Comparative Advantage of ADB inProposed Project
ADB supported the direct transfer of loan funds to schools through a crisisresponse program—the Social Protection Sector Development Program(SPSDP). The proposed project of DBEP–1 and –2 directly builds onachievements of the SPSDP
In Case its attached ADTA isProposed, Indicate Rationale andScope
n.a.
Development Objective (thematicpriority)
Core Poverty Intervention, Human Development
Appendix 6, page 3460
(continuation)Environmental Classification Project C
Social Issues
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program,DBEP = Decentralized Basic Education Project, DMC = developing member country, ESW = economic and sectorwork, GTZ = Deutsche Gesellschaft für Technische Zusammenarbeit (German Agency for Technical Cooperation),IRM = Indonesia Resident Mission, JICA = Japan International Cooperation Agency, MONE = Ministry of NationalEducation, MORA = Ministry of Religious Affairs, PPTA = project/program preparatory technical assistance, SDSDP =Social Protection Sector Development Program, UNESCO = United Nations Educational, Scientific, and CulturalOrganization, UNICEF = United Nations Children's Fund
Appendix 6, page 3561
Table A6.19: Local Government Infrastructure Development Facility
A. Data
Project Number:35134
Country:Indonesia
Sector:Social Infrastructure
Subsector:Urban Development
Project Division:AEWU
Contact Person in Projects Division:K. Decker, A. Weitz
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$10 million
Proposed Lending Modality:Project Loan
PPTA:Local Government Infrastructure Development Facility (2001)
Proposed PPTA Amount:$500,000
Attached ADTA:n.a.
Proposed ADTA Amount:n.a.
Start Predesign Phase:TBD
Start Design Phase:TBD
Approval Year According to CSP:2002
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD)
Contact Person in Proposed Executing Agency:B. Arif, Director General, DGURD
B. Description
Brief Rationale of Project:The project would include a loan facility for local governmentunits (LGUs) to finance the provision of consulting servicesfor project preparatory and bidding assistance forinfrastructure projects with private sector participation. Theproject will (i) promote good governance, (ii) facilitate privatesector development, and (iii) enhance the capacity of LGUsto prepare and bid infrastructure projects for private sectorparticipation.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
No preparatory work has been undertaken. ADB is helpingthe Government prepare the water supply and sanitationsector policy framework. The first draft is expected by July2001. ADB is preparing a TA for the regulatory framework,which is urgently needed to facilitate private investment in thesector. The result of this TA would provide the foundation forprojects to be prepared under the LGU–Private Urban SectorProject Development Facility.
Comparative Advantage of ADB in Proposed Project:ADB has a long and relatively successful track record in theIndonesian water sector. ADB is engaged in strong policydialogue with the Government on the sector and hasestablished good working relationships with national and localsector agencies.
Rationale and Scope of attached ADTA:n.a.
Appendix 6, page 3662
(continuation)
Development Objective(thematic priority)
Private Sector Development and Good Governance
Environmental Classification:C
Social Issues:Many communities have inadequate, unsafe, unreliable, oftenexpensive water supply and sanitation services. Projects tobe prepared under the facility should include serviceprovision to the poor.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEWU = Water Supply, Urban Developmentand Housing Division (East), CSP = country strategy and program, DGURD = Directorate General of Urban and RuralDevelopment, DMC = developing member country, ESW = economic and sector work, IRM = Indonesia ResidentMission, LGU = local government unit, MSRI = Ministry of Settlements and Regional Infrastructure, PPTA =project/program preparatory technical assistance.
Appendix 6, page 3763
Table A6.20: Support for Government Audit Reforms
A. Data
Project Number:
Country:Indonesia
Sector:Finance
Subsector:Governance
Project Division:IRM, IEFI
Contact Person in Projects Division:M. Ryan, S. Chatterjee
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$75 million
Proposed Lending Modality:Project Loan
PPTA:Support for Government Audit Reforms (2002)
Proposed PPTA Amount:$400,000
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:2001
Start Design Phase:2002
Approval Year According to CSP:2003
Proposed Executing Agency:Financial and Development Supervisory Agency (BPKP)
Contact Person in Proposed Executing Agency:S. Hoesodo, Deputy Chairman
B. Description
Brief Rationale of Project:Under TA Loan 1620 (Capacity Building for FinancialGovernance, for $50 million, approved in June 1998), ADBhas supported capacity building in the Government’s NationalAudit Agency (BPK) as one of seven components under theloan. Subsequent political changes, together withdecentralization, have focused attention on the respectiveroles and functions of the External Government Auditor (BPK)and BPKP. As the larger agency with extensive involvementat the provincial level, BPKP is to redefine and refocus its roleand activities.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
In addition to capacity building by ADB in BPKP, the WorldBank has helped conduct a strategic review of BPK. ADB hasparticipated in preparing the World Bank’s Country FinancialAccountability Assessment for Indonesia, completed inJanuary 2001, which highlights issues and options forresolving and streamlining Government’s audit functions.
Comparative Advantage of ADB in Proposed Project:ADB’s capacity-building work with BPKP shows that ongoingADB involvement with this institution has merit, while theWorld Bank addresses BPK as the external governmentauditor.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
Good Governance
Appendix 6, page 3864
(continuation)
Environmental Classification:
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, BPKP = Badan Pengawas Keuangan danPembangunan (Finance and Development Supervisory Board), CSP = country strategy and program, DMC =developing member country, ESW = economic and sector work, IEFI = Financial Sector and Industry Division (East),IRM = Indonesia Resident Mission, PPTA = project/program preparatory technical assistance.
Appendix 6, page 3965
Table A6.21: Rural Poverty Reduction
A. Data
Project Number:34143
Country:Indonesia
Sector:Agricultural Support Services
Subsector:
Project Division:AEAR
Contact Person in Projects Division:TBD
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project Loan
PPTA:Rural Poverty Reduction (2003)
Proposed PPTA Amount:$700,000
Attached ADTA:n.a.
Proposed ADTA Amount:n.a.
Start Predesign Phase:2003
Start Design Phase:2003
Approval Year According to CSP:2004
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency: TBD
B. Description
Brief Rationale of Project:The proposed investment project will form part of the PoorFarmer Income Improvement Project, which aims to helppoor farmers increase sustainable agricultural productivity,improve their access to competitive markets, and reducerisks. The project will focus on poor farmers in selected targetrural areas having a high poverty incidence.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Comparative Advantage of ADB in Proposed Project:ADB is processing the first phase project, Poor FarmerIncome Improvement Project, for 2001. It will cover CentralJava, Central Kalimantan, Central Sulawesi, and East NusaTenggara.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Core Poverty Intervention, Human Development
Environmental Classification:
Social Issues:n.a.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEAR = Agriculture and Rural DevelopmentDivision (East), CSP = country strategy and program, DMC = developing member country, ESW = economic andsector work, IRM = Indonesia Resident Mission, OCR = ordinary capital resources, PE1 = Programs Department(East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 4066
Table A6.22: Marine and Coastal Resources Management Project 2
A. Data
Project Number:
Country:Indonesia
Sector:Agriculture and Natural Resources
Subsector:Marine and Coastal Resources
Project Division:AEFN
Contact Person in Projects Division:M. Jamilur Rahman
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$100 million
Proposed Lending Modality:Project Loan
PPTA:Marine and Coastal Resources Management Project(MCRMP) 2 (2003)
Proposed PPTA Amount:$600,000
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:September 2002
Start Design Phase:July 2003
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of Marine Affairs and Fisheries
Contact Person in Proposed Executing Agency:I. Idris, Project Director, MCRMP
B. Description
Brief Rationale of Project:Indonesia’s marine and coastal resources are of national andglobal importance because of their rich biological diversity.However, resource use and exploitation have resulted inwidespread environmental degradation due to the lack of (i)an integrated approach to coastal zone planning andmanagement, (ii) information and data upon which to baseresource management decisions, (iii) transparency inresource allocation, and (iv) local government and communityinvolvement in resource management. Resource depletionand environmental degradation have adversely affectedcoastal communities, particularly the artisanal fishers.
The current decentralization process, whereby naturalresource management responsibilities are being devolved toregional and local governments, has ushered in a new phaseof resource management and environmental protection. Theprocess increases the sense of ownership of resources at thelocal level, provides opportunities for community participation,and enhances the prospect for transparency in resourceallocation. However, local governments lack the capacity forsustainable management of resources, and a delay inestablishing a system for planning and managing resourcesmay lead to rampant exploitation of resources to generatemore revenue.
Appendix 6, page 4167
(continuation)In October 2000, ADB approved the MCRMP, which aims tostrengthen the capacity of selected provincial and districtgovernments to plan and manage marine and coastalresources, and address related issues in the context ofdecentralization. The proposed MCRMP-2 will build on theexperience of the MCRMP, help consolidate the projectgains, and expand activities to new provinces and districts.The proposed project will be consistent with the sectorobjectives outlined in the COS, which emphasizesmainstreaming environmental management and sustainableuse of natural resources, including marine and coastalresources.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
The sector has been the subject of intensive Governmentstudy in recent years with assistance from ADB and otherdevelopment financing institutions. Sectoral problems andissues are now well understood and priorities well defined.
Comparative Advantage of ADB in Proposed Project: ADB has provided important assistance to the sector throughseven projects with a total loan amount of $257.9 million.Most of the projects were approved in the 1990s, and werelargely successful in establishing a sense of urgency amongthe planners and policymakers on resource assessment,conservation, and management. The projects’ success isreflected in the creation of the Ministry of Marine Affairs andFisheries, which was an important recommendation of the TAto prepare the MCRMP.
Rationale and Scope of attached ADTA: TBD
Development Objective(thematic priority)
Sustainable management of natural resources andenvironmental protection
Environmental Classification: TBD
Social Issues: Poverty, access to resources, and enforcement of laws andregulations
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEFN = Forestry and Natural ResoucesDivision (East), COS = Country Operational Strategy CSP = country strategy and program, DMC = developingmember country, ESW = economic and sector work, IRM = Indonesia Resident Mission, MCRMP = Marine andCoastal Resources Management Project, PE1 = Programs Department (East), Division 1, PPTA = project/programpreparatory technical assistance.
Appendix 6, page 4268
Table A6.23: Poor Fishermen Income Improvement Project
A. Data
Project Number:
Country:Indonesia
Sector:Agriculture and Natural Resources
Subsector:Forestry and Natural Resources
Project Division:AEFN
Contact Person in Projects Division:W. Zhou
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$50 million
Proposed Lending Modality:Project Loan
PPTA:Income Generation for Poor Coastal Communities (2003)
Proposed PPTA Amount:$ 600,000
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:2003 (Third quarter)
Start Design Phase:2003
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of Marine Affairs and FisheriesDirectorate General of Capture Fisheries (DGCF)
Contact Person in Proposed Executing Agency:H. Marwoto, Secretary, DGCF
B. Description
Brief Rationale of Project:Indonesia has over 17,000 islands and an 81,000-kilometercoastline. A significant portion of the country’s population isdependent on marine and coastal resources for its livelihood.However, coastal zone areas are now beset by resource andhabitat degradation and pervasive poverty.
The proposed project will aim to improve the incomes andquality of life of disadvantaged coastal communities. Theproject will (i) organize coastal communities to participate inmicroenterprise and livelihood development and naturalresource management; (ii) provide communities withtechnical and financial assistance and social services; and(iii) strengthen and improve the capabilities and governanceof national and local government agencies, NGOs andcommunities in social and rural development. The project willbe implemented nationwide.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Coastal Community Development Project and MarineResource Evaluation and Planning and lessons learned fromimplementing these ADB projects will be major inputs and thebasis for the proposed project.
Comparative Advantage of ADB in Proposed Project:More than other international development organizations,ADB has extensive experience in implementing coastalcommunity and rural development projects in Indonesia and awide range of other member countries.
Appendix 6, page 4369
(continuation)
Rationale and Scope of attached ADTA:TBD
Development Objective(thematic priority)
Core Poverty Intervention, (Environmental Improvement)
Environmental Classification:B
Social Issues:More than 60 percent of coastal municipalities in Indonesiaare classified as poor. Participatory consultation will involvetarget beneficiaries, people's organizations, nongovernmentorganizations, and the local governments.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEFN = Forestry and Natural ResourcesDivision (East), CSP = country strategy and program, DGCF = Directorate General of Capture Fisheries,DMC = developing member country, ESW = economic and sector work, IRM = Indonesia Resident Mission, PE1 =Programs Department (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 4470
Table A6.24: Small and Medium-Size Enterprise Development 2
A. Data
Project Number:
Country:Indonesia
Sector:Finance, Industry
Subsector:Small and Medium-Size Enterprises
Project Division:IEFI
Contact Person in Projects Division:E. Rodriguez
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project Loan
PPTA:Small and Medium-Size Enterprise (SME) Development 2(2002)
Proposed PPTA Amount:$800,000
Attached ADTA:TBD
Proposed ADTA Amount:TBD
Start Predesign Phase:2002
Start Design Phase:2002
Approval Year According to CSP:2003
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency:TBD
B. Description
Brief Rationale of Project:Although 99 percent of all enterprises in Indonesia are SMEs,they have access to only 10 percent of the outstanding creditin the banking system. SMEs can become more productive ifthey have access to a different set of financial products.However, banks are unable or unwilling to provide them toSMEs. The project aims to overcome this constraint andimprove SMEs’ access to finance on market-based terms.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
In 2000, ADB approved Loan 1738-INO: IndustrialCompetitiveness and Small and Enterprises Development toaddress policy reforms for industry and SMEs. The loan issupported by attached ongoing TAs 3416-INO: PromotingDeregulation and Competition, and 3417-INO: SMEDevelopment.
Comparative Advantage of ADB in Proposed Project:ADB plays a lead role in coordinating aid to SMEs, proposedthe SME Export Development Project in 2001
Rationale and Scope of attached ADTA:TBD
Development Objective (thematic priority) Economic Growth
Environmental Classification:B
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = Economic and sector work, IEFI = Financial Sector and Industry Division(East), IRM = Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PPTA = project/programpreparatory technical assistance, SME = small and medium-size enterprise.
Appendix 6, page 4571
Table A6.25: Local Roads Development (Sector)
A. Data
Project Number:
Country: Indonesia
Sector: Transport and Communication
Subsector: Road and Road Transport
Project Division: IETC
Contact Person in Projects Division: P. Giraud, M. Rehman
Programs Division: IRM, PE1
Tentative Loan Amount according to CSP: $150 million
Proposed Lending Modality: Sector Loan
PPTA: Local Roads Development (2003)
Proposed PPTA Amount: $600,000
Attached ADTA: TBD
Proposed ADTA Amount: TBD
Start Predesign Phase: 2002
Start Design Phase: 2003
Approval Year According to CSP: 2004
Proposed Executing Agency: Ministry of Regional Infrastructure and/or Local Governments
Contact Person in Proposed Executing Agency: TBD
B. Description
Brief Rationale of Project: In the context of the ongoing decentralization, and in theaftermath of the Asian financial crisis, local governments ofpoor areas need technical and financial external assistanceto maintain, upgrade, and develop their road network. Theproject will improve governance in the road sector by helpinglocal governments strengthen their road-related institutions,and develop and implement road sector policies. The projectwill examine the use of low-cost innovative road constructiontechnologies and prepare a manual for routine and periodicmaintenance. The project will reduce poverty by improvingand developing (i) the local road network in poor areas,thereby providing jobs to underemployed rural workers andfacilitating access of the rural population to markets; (ii)education; and (iii) health facilities.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
Discussion with the Government and staff study on strategyfor local road development to be conducted
Comparative Advantage of ADB in Proposed Project: Good knowledge of, and ongoing and previous involvementin, the road subsector
Rationale and Scope of attached ADTA: TBD
Development Objective(thematic priority)
Economic Growth
Environmental Classification: TBD
Appendix 6, page 4672
(continuation)
Social Issues: TBD
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program, DMC= developing member country, ESW = economic and sector work, IETC = Transport and Communications DivisionEast, IRM = Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PPTA = project/programpreparatory technical assistance.
Appendix 6, page 4773
Table A6.26: Local Grids Development
A. Data
Project Number:
Country:Indonesia
Sector:Energy, Power
Subsector:Transmission
Project Division:IEEN
Contact Person in Projects Division:
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$100 million
Proposed Lending Modality:Project Loan
PPTA:Local Grids Development (2003)
Proposed PPTA Amount:$600,000
Attached ADTA:
Proposed ADTA Amount:
Start Predesign Phase:
Start Design Phase:
Approval Year According to CSP:2004
Proposed Executing Agency:TBD
Contact Person in Proposed Executing Agency:TBD
B. Description
Brief Rationale of Project:A continuation of the 2002 outer island electrification project,the proposed project will make electricity more available. Theproject will also promote balanced regional development byfurthering the ongoing power sector reforms at the local levelto (i) optimally use generation capacity by promoting thedevelopment of local grids, (ii) build long-term institutionalcapacity, and (iii) improve efficiencies by facilitating privatesector participation. The objectives of the project are to (i)support rural electrification, (ii) reinforce local distribution andtransmission systems, and (iii) facilitate sector restructuring atthe provincial and regional levels. The project scope mayinclude (I) rural electrification for new households, (ii) localgrids reinforcement to serve load growth, (iii) transmissionand distribution system development in certain locations, and(iv) consulting assistance for institutional strengthening.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
PLN’s power generation and transmission capacityaddition plan
Comparative Advantage of ADB in Proposed Project:ADB has extensive experience in power projects inIndonesia. ADB has long involvement in power sectorrestructuring and has good working relationships withsector agencies.
Rationale and Scope of attached ADTA:
Development Objective(thematic priority)
Economic Growth
Appendix 6, page 4874
(continuation)
Environmental Classification:TBD
Social Issues:Resettlement of people at sites selected for transmissionsubstations, procurement of land for construction oftransmission towers, and right-of-way for stringing oftransmission lines
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy and program,DMC = developing member country, ESW = Economic and sector work, IEEN = Energy Division (East), IRM =Indonesia Resident Mission, PE1 = Programs Department (East), Division 1, PLN = Perusahaan Listrik Negara (StateElectricity Company), PPTA = project/ program preparatory technical assistance.
Appendix 6, page 4975
Table A6.27: Sustainable Social Protection
A. Data
Project Number:
Country:Indonesia
Sector:Social Infrastructure
Subsector:Social Protection
Project Division:AEEH
Contact Person in Projects Division:TBD
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Sector Development Program (SDP) or Program Loan to bedetermined
PPTA:Sustainable Social Protection (2002)
Proposed PPTA Amount:$600,000
Attached ADTA:TBD
Proposed ADTA Amount:n.a.
Start Predesign Phase:2001
Start Design Phase:2002
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of FinanceMinistry of Health and Social Welfare (MOHSW)Ministry of National Education (MONE)Ministry of Religious Affairs (MORA)District Governments
Contact Person in Proposed Executing Agency:Central Agencies: TBDHeads of District Governments
B. Description
Brief Rationale of Project:The financial crisis exposed a large proportion of Indonesia’spopulation to extreme financial and social risks thatoverwhelmed the informal social safety net. The crisishighlighted the importance of developing a robust andsustainable social protection system to cushion the impact offuture economic shocks.
While ADB crisis-related assistance focused on maintainingaccess to basic social services, social protection includespolicies and programs designed to promote efficient andeffective labor markets, protect individuals from the risksinherent in earning a living from small-scale agriculture or thelabor market, and provide a floor of support to individualswhen market-based approaches fail. Social protection asdefined by ADB encompasses the following:(i) labor market policies and programs designed to facilitateemployment and promote efficient labor markets;(ii) social insurance programs to cushion the risks associatedunemployment, health, disability, work injury, and old age;(iii) social assistance and welfare service programs to providea floor to the most vulnerable groups with no other means ofsupport;
Appendix 6, page 5076
(continuation)(iv) micro and area-based schemes to address reduction ofrisk and vulnerability at the community level; and(v) child protection.
The proposed TA will examine Indonesia’s social protectionportfolio in terms of(i) Coverage;(ii) Sustainability, financing, and good governance;(iii) Comprehensive, integrated assessment to ensure
consistency of programs and appropriate prioritization ofsocial protection needs;
(iv) Institutional issues;(v) the needs of special populations (including gender
aspects, indigenous and other vulnerable populations) toensure that social protection systems are inclusive andnondiscriminatory. Scope of consequent ADB assistancewill be based on the initial inventory of programs andidentified Government priorities.
On 1 January 2001, the Government began to decentralizesocial services management to district governments. The TAwill study the implications of decentralization on developmentand operation of a comprehensive social protectionframework. While decentralization allows better targeting ofresources at the poor, the technical and managerialcapacities of local governments and the degree of communityparticipation must also be improved to fully realize thispotential.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
(i) APEC Social Safety Nets—Lessons and Guidelines(ii) TA REG 5897—Strategies for Improved Social Protection(iii) ADB Social Protection Strategy(iv) PPTA outputs(v) Outputs of ongoing ADB-financed TA:
- Decentralized Social Services Delivery- Monitoring and Evaluating the Social Protection Sector Development Program (SPSDP)- Monitoring and Evaluating the Health and Nutrition Sector Development Program (HNSDP)
Comparative Advantage of ADB in Proposed Project:Through the SPSDP and HNSDP, ADB helped implementbasic social safety nets to mitigate the impact of the crisis onthe poor. The proposed project will build on achievements ofthe programs and integrate priority pro-poor interventions intoa sustainable social protection system.
ADB has also participated in the APEC-sponsored study,Social Safety Nets—Lessons and Guidelines from Asia andLatin America.
Rationale and Scope of attached ADTA:TBD
Development Objective(thematic priority)
Core Poverty Intervention, Human Development
Environmental Classification:C
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEEH = Education Health, and PopulationDivision (East), APEC = Asia-Pacific Economic Cooperation, CSP = country strategy and program, DMC =developing member country, ESW = economic and sector work, HNSDP = Health and Nutrition Sector DevelopmentProgram, IRM = Indonesia Resident Mission, MOHSW = Ministry of Health and Social Welfare, MONE = Ministry ofNational Education, MORA = Ministry of Religious Affairs, PE1 = Programs Department (East), Division 1, PPTA =project/program preparatory technical assistance, SPSDP = Social Protection Sector Development Program.
Appendix 6, page 5177
Table A6.28: Decentralized Health Services 3
A. Data
Project Number:
Country:Indonesia
Sector:Social Infrastructure
Subsector:Health and Nutrition
Project Division:AEEH
Contact Person in Projects Division:J. Jeugmans
Programs Division:IRM, PE1
Tentative Loan Amount according to CSP:$100 million
Proposed Lending Modality:Project or Sector Loan
PPTA:Decentralized Health Services 3 (2003)
Proposed PPTA Amount:$500,000
Attached ADTA:TBD
Proposed ADTA Amount:n.a.
Start Predesign Phase:2003
Start Design Phase:2003
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of Health and Social Welfare (MOHSW)District Governments, Provincial Governments
Contact Person in Proposed Executing Agency:E. Soetarto, Secretary General, MOHSWDistrict Government Heads, Provincial Governors
B. Description
Brief Rationale of Project:On 1 January 2001, the Government began to decentralizehealth services management to district governments. Whiledecentralization allows better targeting of resources at thepoor, the technical and managerial capacities of localgovernments and the degree of community participation mustbe improved to fully realize this potential.
ADB’s Decentralized Health Services (DHS) Project(approved 14 December 2000) supports operationalmanagement and service quality improvement in 50 districtsand 12 cities in seven provinces. The processing of DHS-2has started. DHS-2 will support more districts and provincesthrough similar strategies, incorporate lessons learned fromthe DHS Project, and have a final project proposal ready forBoard consideration in mid–2002.
To strengthen local capacity in social sectors and integratesocial services planning and management at the local level,geographical coverage of DHS-3 will consider povertyincidence and complementarity with ongoing and/or futureADB-financed health and education sector projects.
Appendix 6, page 5278
(continuation)
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
(i) Health Strategy in a Post-Crisis, Decentralizing Indonesia(World Bank paper)
(ii) Outputs of ongoing ADB-financed TAs- Decentralized Social Services Delivery- Monitoring and Evaluating the Social Protection Sector Development Program- Monitoring and Evaluating the Health and Nutrition
Sector Development Program- Lessons learned from DHS-1, DHS-2, and other
health sector projects- Close coordination with GTZ, JICA, WHO, UNICEF,
and World Bank
Comparative Advantage of ADB in Proposed Project:ADB has experience in the health sector. Before 1997, ADBhealth projects promoted health sector reforms, and improvedefficiency, service quality, and participation by decentralizinghealth services management. In 1997–1998, ADB supportedthe development of a safety-net program that introduced theblock grant to finance district activities. ADB remained deeplyinvolved in the decentralization process with the Governmentand MOHSW through DHS-1 (approved in December 2000)and DHS-2 (processing of which has started, for Boardconsideration in mid–2002).
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Poverty Intervention, Human Development
Environmental Classification:C
Social Issues:
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEEH = Education Health, and PopulationDivision (East), CSP = country strategy and program, DHS = Decentralized Health Services, DMC = developingmember country, ESW = economic and sector work, GTZ = Deutsche Gesellschaft für Technische Zusammenarbeit(German Agency for Technical Cooperation), HNSDP = Health and Nutrition Sector Development Program,IRM = Indonesia Resident Mission, JICA = Japan International Cooperation Agency, MOHSW = Ministry of Healthand Social Welfare, PE1 = Programs Department (East), Division 1, PPTA = project/program preparatory technicalassistance, SPSDP = Social Protection Sector Development Program, UNICEF = United Nations Children's Fund,WHO = World Health Organization.
Appendix 6, page 5379
Table A6.29: Slum Upgrading and Shelter for the Urban Poor
A. Data
Project Number:35143-01 (PPTA and Loan)
Country:Indonesia
Sector:Social Infrastructure
Subsector:Housing
Project Division:AEWU
Contact Person in Projects Division:M. Lindfield
Programs Division:PE1, IRM
Tentative Loan Amount according to CSP:$150 million
Proposed Lending Modality:Project Loan
PPTA:Slum Eradication and Shelter Delivery for the Urban Poor(2002)
Proposed PPTA Amount:$1 million
Attached ADTA:n.a.
Proposed ADTA Amount:n.a.
Start Predesign Phase:2002 (Third Quarter)
Start Design Phase:2003 (Third Quarter)
Approval Year According to CSP:2004
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI),Directorate General of Human Settlements Development(DGHSD)
Contact Person in Proposed Executing Agency:D. Kirmanto, Director General, DGHSD, MSRI
B. Description
Brief Rationale of Project:The loan will help reduce poverty by focusing on buildinghousing and other assets of the poor to lift them out ofpoverty and provide them with a buffer against adversecircumstances. The improved shelter and neighborhoodenvironment will enhance human development. Support tofinancial institutions to initiate forms of lending appropriate tosuch shelter upgrading will strengthen the financial sectorand thus the economy as a whole.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
INO: Housing Finance for the Urban Poor Study, by a staffconsultant, completed December 2000. The TA reviewedpotential for assistance in the sector and provided a soundbasis for design of the PPTA.
Comparative Advantage of ADB in Proposed Project:ADB has long been involved with urban sector institutionsand has implemented over 20 projects, which have builtcapacity in slum upgrading. ADB has also been involved inrehabilitation of financial sector institutions, which will be animportant component of the project. The project builds on thisexperience, improving the delivery of shelter and housing,especially to the poor. Shelter provision and improvement areissues of great importance to the Government andcommunity, but have not been addressed in a coordinatedmanner. The project will act as a catalyst for institutionalcoordination in the sector and provide the resources toreduce poverty. The project will augment the impact of ADB’s
Appendix 6, page 5480
(continuation)Urban Poverty Reduction Project and support initiatives ofother development agencies in the field.
Rationale and Scope of attached ADTA:n.a.
Development Objective(thematic priority)
Poverty Intervention, Human Development
Environmental Classification:B
Social Issues:Individual subprojects must be formulated carefully to engageand mobilize the community and to ensure that no group isexcluded from project benefits or disadvantaged by theproject.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEWU = Water Supply, UrbanDevelopment, and Housing Division (East), CSP = country strategy and program, DGHSD = Directorate General ofHuman Settlements Development, DMC = developing member country, ESW = economic and sector work, IRM =Indonesia Resident Mission, MSRI = Ministry of Settlements and Regional Infrastructure, PE1 = ProgramsDepartment (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 5581
Table A6.30: Community-Based Water Supply and Sanitation Sector
A. Data
Project Number: 34152-01 (PPTA and Loan)
Country: Indonesia
Sector: Social Infrastructure
Subsector: Water Supply and Sanitation
Project Division: AEWU
Contact Person in Projects Division: A. Williams, C. Andrews.
Programs Division: IRM, PE1
Tentative Loan Amount according to CSP: $100 million
Proposed Lending Modality: Sector Loan
PPTA: Community-Based Water Supply and Sanitation Sector(2002)
Proposed PPTA Amount: $750,000
Attached ADTA: None
Proposed ADTA Amount: n.a.
Start Predesign Phase: 2002 (Second Quarter)
Start Design Phase: 2002 (Fourth Quarter)
Approval Year According to CSP: 2003
Proposed Executing Agency:Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD)
Contact Person in Proposed Executing Agency: B. Arief, Director General, DGURD
B. Description
Brief Rationale of Project: The project will help Government develop and implementcommunity-based water supply and sanitation services forsmall, high-poverty rural and peri-urban communities that arenot being served by water supply and sanitation enterprises.The project will help communities develop service deliverymechanisms and plan, provide, operate, and maintainaffordable and appropriate water and sanitation systems.
Summary of Preparatory Work by DMC and/or ESWby ADB or Others:
No project preparatory work has been done. ADB is helpingthe Government prepare the water supply and sanitationsector policy framework. The first draft is expected by July2001.
Comparative Advantage of ADB in Proposed Project: ADB has a long and relatively successful track record ofworking in the Indonesian water supply and sanitation sectorfor rural and urban areas. ADB is engaged in strong policydialogue for the sector and has established good workingrelationships with national and local sector agencies.
Appendix 6, page 5682
(continuation)
Rationale and Scope of attached ADTA: n.a.
Development Objective(thematic priority)
Supply small, high-poverty rural and peri-urban communitieswith safe and reliable water and sanitation sufficient to protectpublic health, at an affordable price.
Environmental Classification: B
Social Issues: Many rural and peri-urban communities have inadequate,unsafe, and unreliable water supplies and sanitation services,which are often expensive. The project is demandresponsive, and carefully targeted to meet specific, identifiedcommunity needs and demands for services, particularly forthe poor. To ensure project sustainability, communityrepresentatives, especially women, must participate in projectplanning, design, and implementation as well as operation,management, and maintenance of completed facilities.
ADB = Asian Development Bank, ADTA = advisory technical assistance, AEWU = Water Supply, UrbanDevelopment, and Housing Division (East), CSP = country strategy and program, DGURD = Directorate General ofUrban and Rural Development, DMC = developing member country, ESW = economic and sector work,IRM = Indonesia Resident Mission; MSRI = Ministry of Settlements and Rural Infrastructure, PE1 = ProgramsDepartment (East), Division 1, PPTA = project/program preparatory technical assistance.
Appendix 6, page 5783
Table A6.31: Restructuring of Pension and Insurance Sectors
A. Profile
Department, Division, RM, Officer Concerned:IED, IEFI, J. Rogers
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Finance
Poverty Classification and Thematic Priorities:1Economic Growth, Good Governance
Program Year:22002
Expected Approval Date (mo/yr):June 2002
Estimated Completion Date:March 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
In 2001–2002, ADB is to provide extensive support toIndonesia to help strengthen the regulatory and supervisorystructures in the financial sector to bring them up tointernational best practices and standards. Support includes aplanned non bank financial governance cluster program loan,and TA to establish an integrated financial servicessupervisory institution.
The introduction and enforcement of more demandingregulatory and supervisory standards will focus attention onweakness already evident in the non bank finance sector(NBFS). A number of insurance companies are financiallyweak and find it difficult to meet minimum capitalrequirements. The opening of the ASEAN market in 2003 willplace insurance companies under even more pressure as theymeet international competition. Under-reserving and unfundedliabilities in Government-managed pension and socialinsurance schemes threaten to undermine their viability. TheGovernment's extensive ownership and management roles inthe insurance and pension sectors mean that Governmentmust help resolve problems in some institutions as well asensure the operation of the enhanced regulatory andsupervisory structure.
The project will facilitate the resolution and restructuring of theNBFS and thereby enable the introduction of enhancedregulation and supervision standards in the sector.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will address good governance and promote privatesector ownership in the insurance sector.
3. Scope (specific major components, e.g. capacitybuilding)
The TA will help the Government formulate restructuring andprivatization proposals for insurance companies and selectedpension funds in which the Government has a majorownership or management role.
1 Economic growth, human development, gender and support for ADB operations.2 Year of inclusion in CSP for transition period.
Appendix 6, page 5884
(continuation)
4. Expected Outcome and Monitorable IndicatorsImproved governance, financial health, and stability ofselected NBFS institutions and reduced Government role inthe sector
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)
• name, amount, status• assessment of outcome
(i) TA 3116-INO: Reform of Pension and Provident Funds(approved 1998)(ii) TA 3119-INO: Regulatory Reform of the Insurance Industry(approved 1998)
The TAs helped formulate the Nonbank Financial GovernanceProgram Loan (standby for 2001, which addresses the policyand regulatory framework for the sector.
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Finance
7. Cost and Financing Plan
(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF
$1 million (ACCSF)
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ACCSF = Asian Currency Crisis Support Facility, ADTA = advisory technicalassistance, ASEAN = Association of Southeast Asian Nations, CSP = country strategy and program, FSSI = financialservices supervisory institution, IED = Infrastructure, Energy, Finance, and Industry Sectors Department, IEFI =Financial Sector and Industry Division (East), JSF = Japan Special Fund, PPTA = project/program preparatory technicalassistance, RETA = regional technical assistance, RM = resident mission, TA = technical assistance, TASF = TechnicalAssistance Special Fund.
Appendix 6, page 5985
Table A6.32: Decentralized Education Management 2
A. Profile
Department, Division, RM, Officer Concerned:AED, AEEH, I. Matsumoto, A. Inagaki
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Education
Poverty Classification and Thematic Priorities:3Human Development
Program Year:42001
Expected Approval Date (mo/yr):2001
Estimated Completion Date:2004
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
For decentralization to make education services more efficientand effective, local governments must build capacity to plan,finance, and manage education service delivery.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will help improve local education service delivery andachieve greater equity in education service provision andquality as prioritized by the ADB country operational strategy,and National Development Program (PROPENAS).
3. Scope (specific major components, e.g. capacitybuilding)
Capacity building encompassing� Education management information system (EMIS),• Financial and human resource planning and
management,• Management of education program quality, and• Support for school improvement
4. Expected Outcome and Monitorable Indicators• Provision by EMIS of information required to monitor
performance of education services and makemanagement decisions
• Sufficient, efficient, and equitable allocation of financialand human resources to education (budget and staff data)
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
Decentralized Education Management 1$1 millionFor approval in July 2001
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Education
Local Governments
3 Economic growth, human development, gender and support for ADB operations.4 Year of inclusion in CSP for transition period.
Appendix 6, page 6086
(continuation)
7. Cost and Financing Plan(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF $700,000 (JSF)
8. Country/RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, AED = Agriculture and Social SectorsDepartment (East), AEEH = Education, Health, and Population Division (East), CSP = country strategy program, EMIS =Education Management Information System, JSF = Japan Special Fund, PPTA = project/program preparatory technicalassistance, RETA = regional technical assistance, RM = resident mission, TA = technical assistance, TASF = TechnicalAssistance Special Fund.
Appendix 6, page 6187
Table A6.33: Public Health and Nutrition
A. Profile
Department, Division, RM, Officer Concerned:AED, AEEH, J. Hunt
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):
Country/Region (as applicable):Indonesia
Sector/Subsector:Health
Poverty Classification and Thematic Priorities:5Human and Social Development
Program Year:62002
Expected Approval Date (mo/yr):2002
Estimated Completion Date:2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
The sector study will examine the best strategies for the publichealth service to link public nutrition and public health in thepostcrisis decentralized environment. The study’s objectivesare to (i) build upon the lessons of the crisis period,institutionalize steps taken to revitalize the district nutritionsurveillance system, and monitor populations at risk from life-threatening nutrition and health problems; (ii) designmanagement systems around life-cycle public nutrition issues(e.g., maternal and infant undernutrition, nutrition- and diet-related chronic diseases and over-nutrition problems ofschool-age children and adolescent girls); (iii) analyze how thepublic and private sectors can collaborate to assure affordabledietary quality for the poor, and prevent diet-related chronicdiseases; (iv) develop survey instruments, possibly throughthe national census (SUSENAS), to examine dietary patternsand chronic diseases (such as diabetes, obesity, hypertension,heart disease, and cancer) and the potential for behavioralchange through price and production policies, as well as publichealth surveillance, and information, education, andcommunication; and (v) prepare a sectoral assessment andset of recommendations on resource use and capacity buildingfor life-cycle public nutrition to promote life-long health andproductivity.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
3. Scope (specific major components, e.g. capacitybuilding)
Indonesia has worked with ADB on related activities: (i)integrating maternal and infant health concerns into the twosector development program (SDP) loans (Social ProtectionSDP, and Health and Nutrition SDP) by paying attention tosupplementary feeding and primary health care, from whichuseful lessons can be drawn; and (ii) advising ADB and otherAsian countries on life-cycle approaches to nutrition and healthprotection in REG 5824: Nutrition Trends, Policies and
5 Economic growth, human development, gender and support for ADB operations.6 Year of inclusion in CSP for transition period.
Appendix 6, page 6288
(continuation)Strategies in Asia and the Pacific. Problems of undernutritionpersist and may be increasing because of the financial crisis,and not enough attention has been given to the escalatingburden of midlife chronic disease.
Accordingly, the TA will formalize the experiences byconducting policy and operations research that will define acomprehensive strategy for management of public nutritionproblems, requiring multisectoral collaboration. Four kinds ofresearch will be conducted under the TA: (i) survey research,on the link between diet and preventable illness; (ii) programresearch (with a pilot test), on integrating nutrition (food, healthcare) into maternal, infant, adolescent, and adult healthprograms; (iii) management research, on integrating publicnutrition planning, management, and resource use, withdefined roles for central and local governments, coveringnutrition in early childhood programs, school health, and adulthealth promotion; and (iv) economic policy research, on theeconomic costs of malnutrition to GDP and families; cost-effectiveness of alternative public nutrition interventions; andimpacts (positive and negative) of price and subsidy policies,regulatory and trade policies, and incentives to raising dietaryquality at affordable prices. A national steering committee anda set of technical working groups will be instituted to manageand review all research outputs, and will prepare a set ofnational policy recommendations to be debated at the nextWidakarya Pangan dan Gizi and perhaps to be endorsed forinclusion in the next GBHN. The TA findings will probably beincorporated as components in future ADB projects ondecentralized health management, early childhooddevelopment, basic education, and others.
The TA must set up a consultation process in selectedprovinces with district parliamentary bodies and Bupatis,women's and consumer groups and selected civil-societyNGOs, and public civil service coalitions led by MOHSW butincluding other relevant sectors such as agriculture andindustry. From beginning to end, the relevance of TA findingson policies and programs will be tested through focus groups.
4. Expected Outcome and Monitorable IndicatorsThe main benefits will be (i) assimilation of lessons learnedfrom Indonesia's solid progress in reducing undernutritionsince the 1960s, (ii) adoption of innovations that averted deathand permanent cognitive impairment of young children duringthe financial crisis, and (iii) development of long-term systemsfor linking food and industrial policy to health protection andnutrition security. The strategy is profoundly pro-poor anddirected at vulnerable women and children. The TA findingswill be used to strengthen equity-focused and targetedprograms that will disproportionately benefit the poor. Theexpected benefits will be (i) reduction of mortality and disabilityamong the poor, and (ii) improved learning and earningcapacity through preventive and promotive strategies in publicnutrition and health.
Appendix 6, page 6389
(continuation)
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)
• name, amount, status• assessment of outcome
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Health and Social Welfare
Coordinating Ministry of the Economy
7. Cost and Financing Plan(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF (i) $500,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, AED = Agriculture and Social SectorsDepartment (East), AEEH = Education, Health, and Population Division (East), CSP = country strategy program, GDP =gross domestic product, JSF = Japan Special Fund, MOHSW = Ministry of Health and Social Welfare, NGO =nongovernment organization, PPTA = project/program preparatory technical assistance, RETA = regional technicalassistance, RM = resident mission, SDP = sector development program, TA = technical assistance, TASF = TechnicalAssistance Special Fund.
Appendix 6, page 6490
Table A6.34: Regulatory Framework for the Water Supply Sector
A. Profile
Department, Division, RM, Officer Concerned:AED, AEWUK. Decker, A. Weitz
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Social Infrastructure, Water Supply and Sanitation
Poverty Classification and Thematic Priorities:7Good Governance and Private Sector Development
Program Year:82002
Expected Approval Date (mo/yr):January 2002
Estimated Completion Date:December 2002
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
The project will help the Government develop and implement aregulatory framework and establish regulatory bodies for thewater sector. A transparent regulatory framework and theestablishment of independent regulatory bodies are urgentlyneeded, not only to facilitate private sector participation andattract private sector investment but also to improve the publicsector. The regulatory framework will include guidelines forautonomy, accountability, and transparency, and will aim toincrease efficiency and service quality at affordable prices.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will address good governance and private sectordevelopment. The TA is part of ADB’s program to help theGovernment create and/or amend the policy and regulatoryenvironment, in particular to encourage private sectorparticipation in infrastructure development in local areas, asstated in the CSP.
3. Scope (specific major components, e.g. capacitybuilding)
The scope of the TA will cover- assessment of existing laws and regulations related to
the water sector;- Analysis of options for different institutional setups of
regulatory bodies (national, provincial, and/or local);- Examination of legal requirements to establish the
proposed regulatory bodies;- Stakeholder consultation at the national, provincial, and
local levels to develop a concept acceptable to all; and- Based on the above, establishment of a regulatory
framework and preparation of a time-bound action plan forestablishment and operation of regulatory bodies.
4. Expected Outcome and Monitorable IndicatorsThe regulatory framework and action plan will aim to establishan independent regulatory system for the water sector.Improving accountability, transparency, and autonomy of waterenterprises will lead to better service provision, and increasedprivate sector interest in the sector as a whole.
7 Economic growth, human development, gender and support for ADB operations.8 Year of inclusion in CSP for transition period.
Appendix 6, page 6591
(continuation)
9. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
10. Executing agency, implementing agency, counterpartagency (for RETAs as applicable)
Ministry of Settlements and Regional Infrastructure (MSRI)Directorate General of Urban and Rural Development(DGURD), in close cooperation with Indonesia Water SupplyAssociation (PERPAMSI)
11. Cost and Financing Plan (i) ADB Financing (JSF,TASF) (ii) Sources other than JSF/TASF (i) $500,000
12. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, AED = Agriculture and Social SectorsDepartment (East), AEEH = Education, Health, and Population Division (East), CSP = country strategy program, JSF =Japan Special Fund, PPTA = project/program preparatory technical assistance, RETA = regional technical assistance,RM = resident mission, TA = technical assistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 6692
Table A6.35: Private Sector Participation in Infrastructure under Decentralization
A. Profile
Department, Division, RM, Officer Concerned:PED, IRM, S. Chatterjee
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Private Sector Development
Poverty Classification and Thematic Priorities:9Economic Recovery, Private Sector Development
Program Year:10 2002
Expected Approval Date (mo/yr):January 2002
Estimated Completion Date:September 2002
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Encouraging private sector participation in infrastructuredevelopment continues to be a major challenge, particularlyafter decentralization. The Government needs assistance indeveloping a framework and mechanisms and for handlingindividual project proposals in a transparent manner.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA supports several country operational strategy areas.The TA will help economic recovery by encouraging privatesector participation in infrastructure development and play animportant role in private sector development.
3. Scope (specific major components, e.g. capacitybuilding)
The TA is to fund 2–3 experts to the Ministry of Settlementsand Regional Infrastructure. The experts will enableGovernment to handle build-operate-transfer (BOT) proposalsfor infrastructure projects in a transparent manner and willadvise Government to develop the framework foradministering BOT projects.
4. Expected Outcome and Monitorable IndicatorsThe main outcome is better Government capacity to manageBOT projects. Monitorable indicators are (i) number of BOTprojects directly assisted by ADB experts hired under the TA,and (ii) number of new regulations or guidelines that expertshave helped formulate.
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)
• name, amount, status• assessment of outcome
None
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Settlements and Regional Infrastructure
9 Economic growth, human development, gender and support for ADB operations.10 Year of inclusion in CSP for transition period.
Appendix 6, page 6793
(continuation)
7. Cost and Financing Plan
(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF
(i) $150,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, BOT = build-operate-transfer, CSP = countrystrategy program, IRM = Indonesia Resident Mission, JSF = Japan Special Fund, PE1 = Programs Department (East),Division 1, PPTA = project/program preparatory technical assistance, RETA = regional technical assistance, RM =resident mission, TA = technical assistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 6894
Table A6.36: Improving Industrial Environmental Performancethrough Cleaner Production
A. Profile
Department, Division, RM, Officer Concerned:OESD, ENVD, J. Warren Evans
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Others
Poverty Classification and Thematic Priorities:11 Environment Protection
Program Year:12 2002
Expected Approval Date (mo/yr):
Estimated Completion Date:
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Large manufacturing industries contribute significantly toIndonesia’s economy, while small- and medium-sizeenterprises (SMEs) dominate employment. The SMEs’contribution to exports cannot be ignored: SME exports grewby 3.8 in 1998 and 5.8 percent in 1999. SME exportersproduce mainly labor-intensive products and goods (e.g.,garments, handicrafts). A 1998 Ministry of Trade and Industry(MOIT) study showed that aside from difficulties in accessingfinancial resources, SMEs’ opportunities to expand andpenetrate the global market are also hindered by their inabilityto meet emerging environmental management standards (e.g.,eco-labeling. The ADTA aims to help SMEs improve theirenvironmental performance by promoting the adoption ofcleaner production approaches to improve SMEs’ productivityand working environment, and reduce their waste generationor pollution.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
Cleaner production is a proven strategy to increase theefficiency of natural resource use, and minimize waste.Therefore, this ADTA will address a major thematic objectiveof ADB's CSP for Indonesia: improvement of environmentalprotection and natural resources management.
3. Scope (specific major components, e.g. capacitybuilding)
The scope will include: (i) developing a model for adoption ofcleaner production practices in 3–4 types of SMEs, which willenable them to align their environmental performance withtheir trading partners and meet eco-labeling requirements; (ii)promoting the tested model among SMEs; (iii) developing alink with information centers to sustain the effort to improveSMEs’ productivity and reduce environmental problems.
4. Expected Outcome and Monitorable IndicatorsThe ADTA will significantly contribute to enhancing SMEs’productivity and competitiveness, and to improving theirworking environment, which will lead to increased income andreduced poverty.
11 Economic growth, human development, gender and support for ADB operations.12 Year of inclusion in CSP for transition period.
Appendix 6, page 6995
(continuation)5. Previous TA(s) on the Same Theme, in the sector,
country, or region (last five years)• name, amount, status• assessment of outcome
None
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable)
Small Enterprise and Cooperation and Development Agency(SMECDA), in close coordination with MOIT with the Chamberof Commerce and Industry, and SME associations
7. Cost and Financing Plan(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF $500,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = country strategy program, CP = cleanerproduction, ENVD = Environment Division, JSF = Japan Special Fund, MOIT = Ministry of Industry and Trade, OESD =Office of Environment and Social Development, PPTA = project/program preparatory technical assistance, RETA =regional technical assistance, RM = resident mission, SME = small- and medium-size enterprise, TA = technicalassistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 7096
Table A6.37: Gender Mainstreaming in Policy and Program Planning
A. Profile
Department, Division, RM, Officer Concerned:PED, IRM, D. Hakim
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):
Country/Region (as applicable):Indonesia
Sector/Subsector:Human and Social Development
Poverty Classification and Thematic Priorities:13 Gender and Development
Program Year:14 2002
Expected Approval Date (mo/yr):2002
Estimated Completion Date:2004
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Reduce inequalities between men and women, includingaccess and benefits from services, and enhance theparticipation, role, and responsibilities of women in nationaland subnational development programs
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will contribute to a policy shift to more efficient andeffective gender and development programs emphasizingwomen's empowerment, poverty reduction, and sustainabledevelopment. The subject matter is a major focus area of thecountry operational strategy.
3. Scope (specific major components, e.g. capacitybuilding)
(i) Research training program(ii) Policy and program planning training(iii) Reports and publications(iv) Civil society participation in monitoring and evaluation
4. Expected Outcome and Monitorable IndicatorsThe TA has the following readily monitorable outcomes:(i) Research training program
Province and/or district level:- Interregional profiles of gender disparities- District profiles on gender disparities
(ii) Policy and program planning trainingCentral level:
- Sector-specific action plansProvince and/or district level:
- Revised Regional Development Plan(PROPEDA) (Regional Planning Agencies[BAPPEDA] 1, 2) from key regionalgovernment sector agencies (DINAS)
(iii) Women’s caucus at the Regional House ofRepresentatives advocating the elimination of genderdisparities and issues
13 Economic growth, human development, gender and support for ADB operations.14 Year of inclusion in CSP for transition period.
Appendix 6, page 7197
(continuation)5. Previous TA(s) on the Same Theme, in the sector,
country, or region (last five years)• name, amount, status• assessment of outcome
RETA 5700–REG: Socio Legal Status of Women in Indonesia(1998, completed). The results will be used in the proposedTA.
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable)
Executing Agency: National Development Planning Agency(BAPPENAS), and the State Ministry for Women’sEmpowermentImplementing Agency: Central Bureau of Statistics and DistrictRegional Government
7. Cost and Financing Plan(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF (i) $400,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, BAPPEDA = Regional Planning Agency,BAPPENAS = National Development Planning Agency, CSP = country strategy program, DINAS = regional governmentsector agencies, DPRD = Regional House of Representatives, IRM = Indonesia Resident Mission, JSF = Japan SpecialFund, PED = Programs Department (East), PPTA = project/program preparatory technical assistance, PROPEDA =Regional Development Plan, RETA = regional technical assistance, RM = resident mission, TA = technical assistance,TASF = Technical Assistance Special Fund.
Appendix 6, page 7298
Table A6.38: Managing Regional Disparity on Economic and Poverty Programunder Decentralization
A. Profile
Department, Division, RM, Officer Concerned:PED, IRM, PE1 , S. Chatterjee, N. Usui
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Others
Poverty Classification and Thematic Priorities:15 Good Governance, Regional Development/Decentralization
Program Year:16 2002
Expected Approval Date (mo/yr):May 2002
Estimated Completion Date:February 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Decentralization has left the local governments with the mainresponsibility for development and poverty reduction. Localgovernments have different financial capacities to handledevelopment and poverty reduction programs. The project willaddress the Government’s role in managing such disparities tostrengthen national development and poverty reduction.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will address a major focus of Country OperationalStrategy (COS): regional development and equity withparticular reference to decentralization, and poverty reduction.
3. Scope (specific major components, e.g. capacitybuilding)
The major components are expected to include (i) consultancyinputs for recommending changes to the planning anddevelopment financing structure to accommodate the needs ofdevelopment with particular focus on regional equity, and (ii)workshops for consultations with stakeholders
4. Expected Outcome and Monitorable IndicatorsThe main outcome will be ADTA recommendations in the formof a report that is generally acceptable to all stakeholders.
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
None
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Home Affairs and Regional Autonomy, National
Development Planning Agency (BAPPENAS)
15 Economic growth, human development, gender and support for ADB operations.16 Year of inclusion in CSP for transition period.
Appendix 6, page 7399
(continuation)7. Cost and Financing Plan
(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF (i) $400,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, BAPPENAS = National Development PlanningAgency, COS = Country Operational Strategy, CSP = country strategy program, IRM = Indonesia Resident Mission, JSF =Japan Special Fund, PE1 = Programs Department (East), Division 1, PPTA = project/program preparatory technicalassistance, RETA = regional technical assistance, RM = resident mission, TA = technical assistance, TASF = TechnicalAssistance Special Fund.
Appendix 6, page 74100
Table A6.39: Financing Mechanism for Local Government Development
A. Profile
Department, Division, RM, Officer Concerned:AED, AEWU, A. Weitz
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Social Development, Urban Development
Poverty Classification and Thematic Priorities:17 Economic Growth and Good Governance
Program Year:18 2002
Expected Approval Date (mo/yr):March 2002
Estimated Completion Date:January 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
The performance of financing mechanisms for localgovernment development—especially the regionaldevelopment account (RDA) and subsidiary loan agreements(SLAs)—has largely been unsatisfactory, with a highpercentage of loans in arrears and new loans progressing atan extremely slow pace, and a large backlog of applications.With the introduction of local autonomy, the system is likely tocease working. System reform is urgently needed, taking intoaccount new local financial and developmental responsibilities.
2. Relation to Strategic Objectives (How the TAaddresses the following.)• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA is part of ADB’s ongoing assistance to the recentlyintroduced decentralization process. The lack of anappropriate funding mechanism is adversely affecting localinvestment financing, and will be addressed as a multisectoralissue.
3. Scope (specific major components, e.g. capacitybuilding)
The TA will help the Government reform the financingmechanism through:
• restructuring of the RDA and SLA portfolio;• options for the institutional structure (new institution vs.
a window in a financial institution);• grant and loan mechanisms (coordination and
consolidation vs. separation);• establishment of creditworthiness at the local level;• establishment of an effective local credit-rating
methodology; and• building an effective municipal credit market, including
bank finance and bond issuance.
4. Expected Outcome and Monitorable IndicatorsThe long-term objective is the establishment of an effectivemunicipal credit market in which local governments canfinance their infrastructure projects through public and privateborrowing as well as by issuing bonds.
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
17 Economic growth, human development, gender and support for ADB operations.18 Year of inclusion in CSP for transition period.
Appendix 6, page 75101
(continuation)
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Ministry of Finance
7. Cost and Financing Plan(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF
(i) $500,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, AED = Agriculture and Social SectorsDepartment (East), AEWU = Water Supply, Urban Development, and Housing Division (East), CSP = Country StrategyProgram, JSF = Japan Special Fund, PPTA = project/program preparatory technical assistance, RDA = regionaldevelopment account, RETA = regional technical assistance, RM = resident mission, SLA = subsidiary loan agreement,TA = technical assistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 76102
Table A6.40: Support for Anticorruption (Attorney General’s Office)
A. Profile
Department, Division, RM, Officer Concerned:OGC, C.C. Fong
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):n.a.
Country/Region (as applicable):Indonesia
Sector/Subsector:Others
Poverty Classification and Thematic Priorities:19 Good Governance, Human Development
Program Year:20 2002
Expected Approval Date (mo/yr):September 2002
Estimated Completion Date:September 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
The Attorney General’s Office (AGO) is one of the principalinstitutions responsible for law enforcement and fightingcorruption. AGO helps formulate policy for criminal justice,determining whether to prosecute, and undertakes allprosecutions in the country.
Like other public institutions and because of its prominent rolein law enforcement, AGO may be especially vulnerable tocorruption, collusion, and nepotism.
Enhancing AGO’s credibility and efficiency is essential foreffective law enforcement and for the administration of justicegenerally. The review of AGO’s organization, operations, andprocesses carried out under the ADB Governance Audit ofPublic Prosecution Service TA (approved in 2000) identifiedkey issues and strategies in implementing reforms in asystematic and strategic manner.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will directly support Government anticorruption andgood governance efforts. Good governance is the main anchorof the new country strategy, since corruption disproportionatelyaffects the poor, depriving them of access to basic servicesand to justice.
The strategy emphasizes strengthening governmentinstitutions to improve governance, reduce corruption, andcontinue support for public sector financial management. Allthese priorities will be addressed by the TA.
3. Scope (specific major components, e.g. capacitybuilding)
Based on the findings of the earlier TA, assistance to set upanticorruption enforcement mechanisms and procedures forAGO, the TA scope includes(i) capacity building; and(ii) dissemination seminars to increase awareness ofanticorruption reforms and to facilitate participation fromgovernment agencies, civil society organizations, and otherstakeholders.
19 Economic growth, human development, gender and support for ADB operations.20 Year of inclusion in CSP for transition period.
Appendix 6, page 77103
(continuation)
4. Expected Outcome and Monitorable Indicators i. Implementation of various reforms in AGO ii. Development of AGO's capacity iii. Efficient and effective identification and prosecution of
corruption cases
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)
• name, amount, status• assessment of outcome
i. Establishment of an anticorruption commission—TA3381-INO; 1999; $1 million; ongoing.
ii. Governance Audit of the Public Prosecution Office—TA3472-INO; 2000; $1 million; ongoing.
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable)
Attorney General’s Office
7. Cost and Financing Plan(iii) ADB Financing (JSF,TASF)(iv) Sources other than JSF/TASF (i) $500,000
8. Country, RETA IPF for relevant year$11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, AGO = Attorney General's Office, CSP =Country Strategy Program, GOI = Government of Indonesia, JSF = Japan Special Fund, OGC = Office of the GeneralCounsel, PPTA = project/program preparatory technical assistance, RETA = regional technical assistance, RM = residentmission, TA = technical assistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 78104
Table A6.41: Support for Civil Society Monitoring of ADB Projects
A. Profile
Department, Division, RM, Officer Concerned:PED, IRM, S. Chatterjee, S. Luddin
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):
Country/Region (as applicable):Indonesia
Sector/Subsector:Other
Poverty Classification and Thematic Priorities:21 Human and Social Development
Program Year:22 2002
Expected Approval Date (mo/yr):August 2002
Estimated Completion Date:April 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Many NGOs have a solid understanding of local developmentneeds due to their in-depth knowledge and understanding ofthe local community and culture. Therefore, NGOs can helpensure that all ADB projects are designed and implemented togive maximum benefit the poor.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
The TA will increase good governance by empowering civilsociety in development planning. The TA will also enhance themonitoring and accountability process of development funds.
The TA’s long-term objective is to improve ADB projectperformance and development objectives as consistent withADB’s overarching goal of poverty reduction.
3. Scope (specific major components, e.g. capacitybuilding)
The NGOs included in this TA will monitor and hence improvethe performance of ADB projects. Therefore, NGOs must beselected based on specialty and network.
Once ADB’s geographic focus strategy has been implemented(scheduled for 2002), NGO committees will be set up inselected provinces.
NGO capacity building will thus be focused on establishingeffective monitoring mechanisms and enhancing civil-societyparticipation in ADB projects.
4. Expected Outcome and Monitorable Indicators(i) Active involvement of NGOs at every stage of projectdesign, implementation, and monitoring(ii) Significant involvement of civil society in ADB projects(iii) Regular dialogue on projects between NGOs and ADBstaff and missions from headquarters(iv) NGO understanding of ADB operations and businessprocesses(v) Overall improvement in ADB project performance
21 Economic growth, human development, gender and support for ADB operations.22 Year of inclusion in CSP for transition period.
Appendix 6, page 79105
(continuation)
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
No TA has specifically provided capacity building for NGOs. Inmany past projects, however, such as the Farmer-ManagedIrrigation System Project, NGOs facilitated relations betweenthe project implementers and the local community.
This project is scheduled to be completed in 2001, one yearahead of schedule.
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable)
National Development Planning Agency (BAPPENAS) will bethe Executing Agency. Selected NGOs will be theimplementing agencies.
7. Cost and Financing Plan
(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF
$200, 000 (JSF)
8. Country, RETA IPF for relevant year$ 11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, CSP = Country Strategy Program, IRM =Indonesia Resident Mission, JSF = Japan Special Fund, NGO = nongovernment organization, PPTA = project/programpreparatory technical assistance, RETA = regional technical assistance, RM = resident mission, TA = technicalassistance, TASF = Technical Assistance Special Fund.
Appendix 6, page 80106
Table A6.42: Developing Proxy Indicators for Poverty Monitoring
A. Profile
Department, Division, RM, Officer Concerned:IRM, PE1, L. Kulp
Type of TA (ADTA, PPTA, RETA):ADTA
Name of Loan Project to follow (if PPTA):
Country/Region (as applicable):Indonesia
Sector/Subsector:Others
Poverty Classification and Thematic Priorities:23 Poverty Intervention
Program Year:24 2002
Expected Approval Date (mo/yr):July 2002
Estimated Completion Date:June 2003
B. Concept and Design
1. Rationale (specific problem/issues to be addressed inTA)
Developing leading indicators of poverty is important forcentral and local government in their efforts to develop policiesand monitor their implementation and impact in a timelyfashion. Antipoverty policies and programs are developed withhighly aggregated information on the situation 1–3 years ago.Providing a current poverty index (leading indicators ofpoverty) to the central and local governments is also importantto focus their attention on poverty.
The proposed leading indicators of poverty will revealinformation about the condition of the poor and vulnerability ofthe near-poor during the year. The existing expenditure-basedpoverty measures provide a medium-term trend of changes inwelfare without revealing short-term intertemporal changesthat have a profound impact on the ability of households toaccumulate wealth and educate their young. Knowledge ofthese seasonal fluctuations will be useful for the design andtimely execution of interventions to reduce vulnerability to suchfluctuations.
2. Relation to Strategic Objectives (How the TAaddresses the following.)
• poverty reduction/thematic priorities• country strategy (where applicable)• regional cooperation
Under the Poverty Partnership Agreement with theGovernment, signed in April 2001, ADB is committed tosupport improvement of poverty-monitoring systems. This TAwill strengthen the capacity of the Central Bureau of Statisticsto produce and disseminate relevant and reliable povertyindicators regularly and in a timely fashion to support betterpolicy and program design.
3. Scope (specific major components, e.g. capacitybuilding)
Leading indicators will be developed from existing wage datathat are sound correlates of urban and rural poverty. Aconsumer price basket will be developed to reflect the basketof goods and services used by the unskilled urban and ruralpoor and to enable more sensitive monitoring of the effect ofprice changes on urban and rural low-income households.Factors explaining changes in the indicators will be analyzedand forecasting and explanatory models tested to assess theeffects of policy and other economic changes on the poor.Improvements to the existing content, including genderdisaggregation, and timeliness of price and wage data will be
23 Economic growth, human development, gender and support for ADB operations.24 Year of inclusion in CSP for transition period.
Appendix 6, page 81107
(continuation)identified and tested. The addition of new wage types andexpansion of area coverage will be explored.
Potential leading indicators of vulnerability will be developedthrough pilot surveys of vulnerable or marginal groups whosecharacteristics are not reflected in existing surveys. Theindicators may include borrowing behavior of the poor,consumer behavior in slum areas, number of homeless andchild workers, monthly rural income of landless farmers and offisher households, and attendance in primary school. Costimplications of using these indicators nationwide will beidentified.
Advisory services will be provided to BPS to, among otherthings, improve the flow of data collection to increasetimeliness and quality, review and improve the relevance ofsurvey content for poverty monitoring, and in-country trainingfor instituting improvements. Potential data users such astechnical ministries, central and local government planningoffices and parliaments, and civil-society groups will beinvolved in reviewing the data to make the indicators morerelevant, and in developing an easy-to-understand reportingformat for these indicators.
4. Expected Outcome and Monitorable IndicatorsSpecifically, the TA will (i) develop leading indicators fromexisting data sources to track changes in urban and ruralpoverty and national and local well-being; (ii) develop thecapacity of BPS to produce and routinely report on theseleading indicators to Government and other povertystakeholders; (iii) train policymakers to use leading povertyindicators to frame policies and programs; and (iv) pilot-testpotential leading indicators of poverty and well-being.
5. Previous TA(s) on the Same Theme, in the sector,country, or region (last five years)• name, amount, status• assessment of outcome
None
6. Executing agency, implementing agency, counterpartagency (for RETAs as applicable) Central Agency for Statistics
7. Cost and Financing Plan
(i) ADB Financing (JSF,TASF)(ii) Sources other than JSF/TASF
(i) $150,000
8. Country, RETA IPF for relevant year $11 million
ADB = Asian Development Bank, ADTA = advisory technical assistance, BPS = Biro Pusat Statistik (Central Bureau ofStatistics, CSP = country strategy program, IRM = Indonesia Resident Mission, JSF = Japan Special Fund, PE1 =Programs Department (East), Division 1, PPTA = project/program preparatory technical assistance, RETA = regionaltechnical assistance, RM = resident mission, TA = technical assistance, TASF = Technical Assistance Special Fund.