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Published by soedito, 2019-01-07 07:33:32

[Organization_for_Economic_Cooperation__Developme_324

[Organization_for_Economic_Cooperation__Developme_324

1995. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA –

validates the report’s accuracy within three working days and then transfers
the complaint to the responsible ministry or agency. This initiative has
attracted international attention for its potential to bring the government
closer to citizens and their demands.

Similarly, some initiatives are promoting more direct and responsive
relations between citizens and local governments. For instance, the Regency
of Bojonegoro has put in place weekly public dialogues (see Box 5.3). All
citizens interested in participating are invited to join the dialogue in person
or listen to it on the radio. This practice allows citizens to ask questions to
local government representatives in person or through SMS and provides the
opportunity for public officials to explain their policies and disseminate
information and data.

Box 5.3. Public dialogue and public information in Bojonegoro

Launched in March 2008, the Public Dialogue and Information programme in
the Bojonegoro Regency takes place every Friday and is presided over by the
Regent of Bojonegoro. The initiative gives the citizens of the regency the
opportunity to interact directly with representatives of the local government to
address governance or public services issues. The dialogue is open to the public,
has an average attendance of 175 people and is simultaneously radio broadcasted.
Citizens can also engage in the process through text messages to which the local
government will respond. The Regency of Bojonegoro participates in the LAPOR
platform and has its own open data portal. The Regency of Bojonegoro benefits
from these weekly meetings to socialise open data on a diversity of issues,
especially using simple visualisation to make data more accessible to citizens
lacking data skills.

If they were applied on an adequate scale, these initiatives would be able
to positively change government-society dynamics, improve the quality of
public services and, if the Government of Indonesia is able to be sustainably
and effectively responsive, could contribute to citizen trust in the
government. However, unlocking the full potential of such initiatives can be
challenging. For instance, the lack of participation in the programme by
most subnational governments (key players in the delivery of public
services) hinders LAPOR’s potential and reduces awareness of the platform.
Streamlining and scaling up LAPOR, and consequently increasing its
institutional capacity and enabling the Government of Indonesia to continue
to respond effectively and efficiently, would help maximise the benefits of
the initiative.

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200 – 5. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA

These and several other digitally enabled open government initiatives
have great transformative potential. The Government of Indonesia should
now focus on the creation of institutional frameworks and capacities that
help scale up these initiatives and achieve a whole-of-government approach
in the use of ICTs for open government.

Achieving a whole-of-government approach in government use of ICTs
in support of open government

As with many other governments around the world, the Government of
Indonesia has encountered substantial challenges in keeping pace with
technological change. While several interesting and potentially
transformative digital government initiatives exist within the central
government, the Government of Indonesia would benefit from scaling up
these initiatives and strengthening cross-government co-ordination to avoid
duplication and to help streamline efforts. The establishment of peer-
learning and knowledge-transfer mechanisms would also help rapidly spread
good practices in the use of ICTs in the public sector and share lessons
learned, which would in turn help build capacities across government
institutions. To achieve this, public authorities must take action to strengthen
the networks of digital government practitioners within and across levels of
government.

As governments evolve and achieve new levels of maturity in the use of
ICTs, they can achieve consistent progress only through a structured
approach, supported by a strategy that sets clear goals and establishes clear
and effective governance frameworks for the oversight and management of
ICT policies that align with national policy objectives. This is a challenging
task for any government, and even more so for a country with the size,
geography and social and ethnic realities of Indonesia. It is, nevertheless, a
necessity if the government wants to move forward to the next stage of its
open government agenda supported by the use of ICTs. The lack of such an
approach may be a strong explanatory factor for the inconsistent progress
made by Indonesia in the UN’s e-Government Index (Figure 5.8) compared
with most governments in Southeast Asia.

OPEN GOVERNMENT IN INDONESIA © OECD 2016

2015. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA –

Figure 5.8. UN e-Government Index

1

0.9

0.8
Brunei Darussalam

0.7 Cambodia
Indonesia

0.6 Lao People's Democratic Republic
Malaysia

0.5 Myanmar
0.4 Philippines

Singapore
0.3 Thailand

Timor-Leste
0.2 Viet Nam

0.1

0
2003 2004 2005 2008 2010 2012 2014

Source: UN e-Government Survey.

Developing institutional frameworks to support the strategic use of
digital technologies

The Strategic Plan of the Ministry of Administrative and Bureaucratic
Reform for 2015-19 identifies digital government as an essential tool to
achieve a more efficient, transparent and open government that supports
sustainable development in Indonesia. Similarly, the ICT White Paper
elaborated by the Ministry of Communication and Informatics recognises
the central role of government as an enabler and catalyst of the information
society, recognising digital government as a key element of the ecosystem of
the digital economy. These objectives are clearly synergetic and require a
strong alignment to ensure the coherent and consistent progress of
Indonesia’s digital agenda. However, the country’s institutional design and
its allocation of responsibilities do not necessarily facilitate such co-
ordination. The Deputy Minister for Institutions and Governance from the
Ministry of Administrative and Bureaucratic Reform (MENPAN) oversees
the work of the Deputy Assistant for the Co-ordination of e-Government

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202 – 5. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA

Policy Formulation. This policy-making authority co-exists with the
Director General of ICT Application in the Ministry of Communications and
Information Technology, which is responsible for governance and policy
formulation and implementation in the field of e-government in accordance
with Presidential Regulation No. 54 of 2015 concerning the Ministry of
Communications and Information Technology.

While the Ministry of Communications and Informatics has taken the
lead in the implementation of e-government policies as well as on public-
sector infrastructure for ICTs, its role is less evident when it comes to
establishing policies, standards or guidelines (see Table 5.1). The absence of
clarity in the distribution of roles and responsibilities increases the risk for
redundancy, as well as the lack of collaboration and co-operation, and
increases the chances of incoherence in the policy framework. Overlapping
scopes of responsibilities also diminish the clarity of institutional design and
the accountability of public authorities, leading to inefficient and ineffective
government operations.

Table 5.1. Roles and responsibilities for digital government in Indonesia

Deputy Minister for Institutions and Governance, Director General of ICT Application, Ministry of
Ministry of Administrative and Bureaucratic Communications and Informatics
Reform
Prepare norms, standards, procedures and
Formulate digital government policy criteria
Co-ordinate and synchronise the implementation Provide technical guidance and supervision
of digital government Monitor, evaluate and report on digital
Monitor and evaluate the implementation of government
digital government

Sources: Strategic Plan of the Ministry of Administrative and Bureaucratic Reform 2015-2019;
Presidential Regulation No. 54 of 2015. on Ministry of Communication and Informatics;
Presidential Regulation No.47 of 2015 on Ministry of State Apparatus and Bureaucratic Reform.

The Government of Indonesia has identified the need to strengthen its
governance framework as part of the digital government policy that is
currently being prepared (Strategic Plan of the Ministry of Administrative
and Bureaucratic Reform, 2015-19). The new institutional framework
should provide the Government of Indonesia with tools and mechanisms to
ensure greater coherence in the use of ICTs in the public sector. OECD
countries have explored a wide range of structures and institutional set-ups
to achieve effective governance of the public sector’s use of digital
technologies. The figure of the Central/Federal Government Chief
Information Officer (CIO) or equivalent position has become the most
common form of co-ordinating an entity for digital government activities. In
some cases, institutions or units that are more experimental complement the
CIO’s role depending on governments’ priorities and efforts (see
Figure 5.9).

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2035. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA –

Figure 5.9. ICT governance structures across the OECD

1
0.9 0.8824

0.8

0.7

0.6

0.5

0.4 0.3529 0.3529

0.3

0.2 0.1818 0.1765 0.1765

0.1

0

Chief Chief Chief Chief Data Chief Chief Digital

Information Information Technology Officer Innovation Officer

Officer Security Officer Officer

Officer

Source: 2014 OECD Survey on Open Government Data and Desk Research.

Traditionally, the role of the CIO has focused on supporting the strategic
use of technology by government in order to achieve its goals, frequently
driven by efficiency gains and the administration’s own priorities. However,
following recent trends, these governing bodies have increasingly moved
toward more user-centred and user-driven approaches. As governments seek
to improve digital public services and public-sector intelligence, CIOs
across the OECD have developed units with the mission of improving user
engagement, service design and delivery, and data management. Some other
countries have opted for a model that includes a Chief Digital Officer, either
reporting to the CIO (as is the case in New Zealand or the United States), as
a separate structure (as in Australia) or accumulating the functions of the
CIO (as in the United Kingdom). To date, these Chief Digital Officers have
been more disruptive in nature than the traditional CIO, breaking down
silos, introducing ways of working that parallel start-ups (such as agile
methodologies) and maintaining a strong focus on service delivery and
citizen participation. In the case of Indonesia, the Ministry of
Communications and Information Technology seems to rely on its technical

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204 – 5. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA

expertise and policy development authority to play the role of a traditional
national government CIO.

Nevertheless, in strengthening the use of digital technologies to foster an
open government, the government should consider the addition of a Chief
Digital Officer reporting to the national government CIO. The role of such
an authority would include making government operations and services
digital by design, instead of simply putting forms online. This includes the
transformation of back-office operations and setting digital service
standards. The Chief Digital Officer is expected to identify quick wins in
digital service delivery, use innovative service design and technology
deployment techniques and foster user engagement and participation.

The mandate and responsibilities of the units or bodies leading digital
government activities vary greatly across the OECD, as do the policy levers
at their disposal to ensure compliance with digital government rules and
regulations. Certain successful countries have opted for more coercive
levers, such as New Zealand, while others rely mostly on soft levers, such as
Denmark and Sweden (see Figure 5.10), suggesting that there is no one-size-
fits all model. Governments should make sure, however, that the tools
provided are coherent with the overall public governance ecosystem and
adapted to existing co-ordination mechanisms, institutional capacities, legal
and regulatory frameworks, and the political and administrative cultures in
the public sector.

The ultimate role of the unit co-ordinating digital government is to
provide an incentive structure that can foster change and accelerate the
digital transformation of government. While more coercive levers, if
appropriately used and implemented, can provide the co-ordinating body
with significant leverage to ensure coherence, this authority and the overall
institutional arrangement should provide positive incentives (“carrots”) to
promote cultural change and limit resistance among public institutions. For
instance, countries like Estonia, Portugal and Uruguay are not only able to
review, approve or stop ICT projects, but they have also put in place funds
dedicated to digital government. The objective of these funds is to finance
high-impact digital government projects that are in alignment with the
overarching digital government strategy. Public institutions have incentives
to access these funds and save resources from their own budgets. All
projects financed through these centralised funds must comply with
government regulations in the field of digital government and be in
alignment with all relevant public-sector strategies.

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Figure 5.10. Levers of ICT governance across OECD countries
What are the main responsibilities of the unit/body leading and co-ordinating ICT deployment in the

central government?

Percent of responding countries
0% 20% 40% 60% 80% 100%

Advising strategy development “Soft”
levers
Monitoring strategy implementation are in
place
Reviewing ICT projects across the government in the
as needed majority
of central
Prioritisation of ICT projects across the co-
government ordination

Approve - or stop - ICT projects across the Coercive
government as needed levers are
less
Mandating external reviews of ICT projects common
across the government

Other

Source: OECD Survey on Digital Government Performance, 2014.

Building institutional capacities for implementation

The ability to steer the use of digital technologies in the public sector to
support broader policy objectives does not exclusively rely on institutional
design and governance frameworks. Governments should be able to have
clear visibility of existing assets, ICT projects and contracts as well as
previous ICT supplier performance in order to make strategic investment
decisions. Moreover, the management of ICT projects has become
increasingly complex in terms of budget, the stakeholders involved and the
choice of technologies available. The Government of Indonesia should work
on developing its ability to structure investments and manage the associated
risks, ensure efficiency in project implementation, and monitor the
realisation of the expected returns.

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The Strategic Plan of the Ministry for Administrative and Bureaucratic
Reform for 2015-19 proposes the development of E-Government Master
Plans for the entire government, which may be included in the new digital
government policy currently being drafted. Such Master Plans would be
developed in collaboration with Bappenas and require each public institution
to develop an ICT or e-government plan that includes ICT projects, their
timelines, KPI and funding in agreement with national strategic planning
mechanisms and annual budgeting. These plans would then be validated and
aggregated into a National E-Government Master Plan.

These planning mechanisms would considerably strengthen the ability
of the Government of Indonesia to plan and monitor ICT activities and
investments in the public sector. However, this system would not ensure that
individual ICT projects – which would be planned separately and then
aggregated – are being adequately conceived, that their resources are being
rationally allocated and shared across the administration or that project
managers have the tools they need to identify drivers of failure or success
and make the necessary adjustments throughout the implementation phase.
The experience across OECD countries has shown that sound business case
or similar value proposition methodologies can help public institutions
better structure and monitor specific ICT investments (Principle 9 of the
OECD Recommendation).

Adopting a mandatory business case methodology (or similar value
proposition approach) for ICT projects would support strategic planning and
strengthen the capacity to define return on investment and monitor
implementation (see Box 5.4 for an example). It would also enable the
institution responsible for co-ordinating digital government to capture
information on previous successes and failures in project implementation
that can strengthen institutional knowledge.

Similarly, the use of standardised and mandatory ICT project
management models for structuring costly or complex projects can support
project managers and help clarify roles and responsibilities, times of
intervention and assessment, thus reducing the risk of failure (Principle 10
of the OECD Recommendation). These tools would represent a significant
contribution to the ability of the government of Indonesia to strategically
plan and implement ICT projects that support its efforts to make government
more open, transparent, efficient and effective.

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Box 5.4. Ensuring efficiency of ICT projects: Danish business case methodology

The Danish Digitisation Agency is responsible for developing the business case
methodology for ICT projects in the public sector. The methodology helps project managers
analyse the costs, expected benefits and risks associated with ICT investments in the public
sector. It helps the Government of Denmark decide on the implementation of ICT projects
based on different possible scenarios of implementation and non-implementation of the project,
including the impact on operating costs. The methodology helps calculate the expected value
from the project and monitor its implementation and success.

A standardised project management model complements the Danish business case
methodology. The Danish ICT Project Model provides a standardised way of managing ICT
projects across the government administration. With clear reference to the UK ICT project
model Prince2, it provides guidelines for how to organise and manage ICT projects and
delivers concrete templates for all generic products in the process. The overall phases covering
all projects are illustrated below:

Idea Analysis Acquisition Completion Realisation

Management Specification - Management
phases > Tenders phases

The Ministry of Finance has created a unit establishing good practices on e-government
projects, including both mandatory and recommended elements. The model has enabled the
establishment of a specific governance structure, for example requiring approvals of well-
developed business cases, as well as ongoing approvals – so called “stop-go” decisions – each
time a project passes from one phase to the next.

Sources: www.digst.dk/Styring/Business-case-model ; www.digst.dk/Styring/Projektmodel.

Finally, the digital transformation puts pressure on all levels of
government to develop the necessary human resources. This means not only
developing strategies to attract, develop and retain the required ICT skills in
the public sector but also developing the necessary skills to engage
effectively with external stakeholders. Developing skills for engagement and
overcoming the traditional administrative culture is a challenging yet
essential task for the use of ICTs for open government.

Achieving coherence within and across levels of government

The Ministry of Administrative and Bureaucratic Reform has identified
the need to improve the co-ordination between national and subnational
governments in the field of digital government in order to deliver the
expected results (Strategic Plan, 2015-19).

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A whole-of-government approach is built on political commitment to a
shared vision. This is crystallised in an overarching strategy or policy
instrument and supported by adequate governance frameworks, thereby
enabling policy alignment and co-ordination at the strategic and operational
levels. Experiences across the OECD highlight the crucial role of strategic
prioritisation of digital government in achieving a shared vision of public-
sector modernisation. Securing political support for the digital
transformation agenda is an additional critical factor of success. In that
sense, the process of developing a digital government policy provides a
valuable opportunity to leverage the efforts and investments already made to
spur ICT use within the public sector, which the Government of Indonesia
should not miss.

The development of the digital government policy also provides the
opportunity for governments to embed a vision and rationale for using
digital government as an enabling tool for broader policy outcomes by all
relevant stakeholders. This stage provides the Government of Indonesia with
a unique opportunity to build a shared vision of how governments can use
ICTs to improve open government, sustainable development and societal
well-being, as well as develop a common understanding of the role of digital
technologies in a modern public sector.

Achieving a coherent use of digital technologies across levels of
government in Indonesia requires integrating the views and interests of the
different stakeholders in the development of the strategy and the
establishment of the appropriate co-ordination mechanisms. If it is supported
by an effective communication strategy, this can allow the government to
build a strong consensus and sense of ownership, as well as to gain support
for the digital transformation agenda within the public sector and the society
as a whole. Moreover, experience shows that the best results come when the
vision statement embedded in the digital government strategy links to
higher-level policy objectives, as this can help secure the commitment of the
political leadership. Such a commitment is necessary for the government to
be able to bring down existing political and cultural barriers to change and
implement cross-cutting public-sector reform efforts.

Co-ordination is an equally essential element of achieving a whole-of-
government approach (see Box 5.5 for an example). The unequal progress in
the use of digital technologies for open government across policy areas and
levels of government as well as the duplication of efforts and initiatives
suggests that there is substantial room for improvement of co-ordination
mechanisms. This is particularly challenging in Indonesia given both the
administrative structure (strong de-centralisation) and the size of the country
(in geographic and demographic terms).

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Box 5.5. Denmark: Achieving coherence in a context of de-
centralisation

Denmark has found an original and sustainable mechanism for achieving co-
ordination and commitment to the national strategy across the public sector. The
Steering Committee for Cross-Government Co-operation – Styregruppen for
Tværoffentlige Samarbejder (STS) was set up as a result of an agreement between
the Government, Danish regions and local governments in Denmark in 2005.

The STS is a cross-government co-ordination body aiming at creating common
ground in the work on digital government. The overall framework for the co-
ordination is confirmed in the annual negotiations on the coming year’s budgets
between the Government and the representatives for the regions as well as for the
municipalities. The STS consists of high-level representatives (on the level of
permanent secretaries/managing directors) from the five most important
ministries for e-government implementation from the central government and the
associations representing the municipalities and the regions. STS is responsible
for determining overarching principles and coherent framework conditions for
digital government, co-ordinating initiatives in order to use public resources more
efficiently, deciding on resource allocation and determining models for digital
government operations and project maintenance.

Source: OECD (2010), Denmark: Efficient e-Government for Smarter Public Service
Delivery.

The co-ordination mechanisms for digital government should have at
least two levels of articulation to ensure adequate performance and coherent
use of digital technologies within and across levels of government:

• High-level strategic co-ordination: This level should serve as the high-
level political governance mechanism. This co-ordination level should
include relevant stakeholders for decision making, such as those at the
highest level of responsibility for digital government, as well as those
responsible for the reform of the public sector (Centre of Government or
co-ordinating ministry), finance, open government co-ordination, ICT
infrastructure and subnational governments. In Indonesia, the National
ICT Council, chaired by the President of Indonesia, plays this role.

• Operational co-ordination: This level should deal with implementation
challenges and bottlenecks and involve all relevant actors for the
specific ICT projects. Digital government authorities and the CIOs of
public institutions involved in relevant projects should serve as chairs

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(e.g. CIO Councils). This level should include institutional mechanisms
of knowledge sharing and peer learning to facilitate capacity building.

The National ICT Council is a multi-stakeholder institution in the field
of ICT created by Presidential Decree No. 01 of 2014. It is responsible for
providing the general policy and strategic direction for the development of
ICTs to support national development efforts. The National ICT Council is a
broad co-ordinating body that brings together relevant stakeholders,
including public authorities, state-owned enterprises, private sector
representatives and academics to build consensus around key strategic issues
in the development of ICTs in the country. The National ICT Council is
subsequently divided in sub-bodies that cover ICT infrastructure, ICT for
government (digital government), ICT for health, ICT for education, the
digital economy, the ICT industry and the Meaningful Broadband City
Initiative.

Chaired by the President, this body has the potential to provide ICT
initiatives with the required visibility and political support. Moreover, the
number of actors that participate in the council can help build ownership of
the efforts on this front. However, subnational governments seem to lack
adequate representation, thus hindering the potential of the council to foster
coherent approaches across levels of government3.

The Ministry of Home Affairs is responsible for overseeing the
implementation of national legislation at the local level. It has an important
role to play in ensuring that all national digital government norms applicable
to the subnational level are effectively implemented. For this reason, it
seems important to consider its participation in existing co-ordination
mechanisms such as the National ICT Council, in which it is not currently
included.

At the operational level, a dynamic CIO Council would provide a good
forum to address implementation challenges. This type of council could
operate at both the national and regional level. For such mechanisms to
deliver the expected results, however, all public institutions should have a
CIO in place that would be responsible for following up with the work of the
CIO Council. To complement these formal co-ordination mechanisms,
national and subnational governments should also take action to foster
informal networks and communities of practice, both offline and online,
enabling public institutions and practitioners to share data, information,
knowledge and experiences in tackling common challenges (see Box 5.6 for
examples). Such mechanisms contribute to mitigate the uneven distribution
of ICT and project management skills across the territory, bridging regional
divides. The government of Canada, for instance, has developed internal
social media that allow civil servants to collaborate more effectively. Such a

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resource could help Indonesian civil servants spread across a vast territory to
be in touch and share experiences in a more agile way.

Box 5.6. Co-ordination mechanisms in selected countries

Australia

There is a strategic-level committee, the Digital Transformation Committee of Cabinet,
which sits under the Cabinet and is chaired by the Prime Minister.

Service Delivery Leaders is a steering committee comprising senior public servants from
major government departments. Service Delivery Leaders is an early consultation point for
Digital Transformation Office activities with a whole-of-government impact, including advice
on strategy and co-ordinated service delivery activity throughout the government. Service
Delivery Leaders may also create subordinate boards, working groups or other bodies to
undertake specific work.

Portugal

The Agency for Administrative Modernisation (AMA, for its Portuguese name) chairs the
“E-Government Network” that meets regularly to monitor the implementation of the E-
Government Action Plan by public institutions. The AMA is responsible for the approval of
ICT projects over EUR 10 000, in observance of the norms and guidelines defined by the
network. The network gathers relevant stakeholders, such as the AMA and the ICT Shared
Service Centre, and functions at both the high political level and the operational level.

Moreover, the AMA follows a Programme Management Officer (PMO) Structure led by the
Director of E-Government. This team is in continuous contact with focal points at institutions
relevant for the implementation of digital government projects to follow up on the
implementation, and it prepares E-Government Network meetings and organises specific
workshops to discuss trending topics or issues in the area of e-government.

Spain

The ICT Strategy Commission (CETIC) – the inter-ministerial body at the highest political
level comprising senior officials from all ministries – defines the strategy that, once approved,
goes to the Council of Ministries. The CETIC also defines the services to be shared, determines
the priorities for investment, and reports on draft laws, regulations and other general standards
with the purpose of regulating ICT matters for the General State Administration. Furthermore,
the CETIC promotes collaboration with the autonomous regions and local authorities for the
implementation of integrated inter-administrative services.

The Committee of the Directorate for Information Technologies and Communication
includes 25 CIOs of the different ministries (13) and agencies (12), as well as the deputy
directors for ICT of all ministries, and the unit leads the co-ordination of the implementation of
ICT projects.

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Box 5.6. Co-ordination mechanisms in selected countries (continued)

Uruguay
The Honorary Directive Board is distinctive in terms of the regularity of its meetings (once

a week) and in that it is responsible for virtually all high-level decisions of the Agency of E-
Government and Information Society (AGESIC). It is composed of five members, including
the delegate of the president (formally the Pro-Secretary of the Presidency, in practice the
Director General of the Presidency by delegation) and representatives from the private sector,
academia and the technical community and the CEO of the agency. A complementary advisory
board includes the CIOs of the different public institutions.

The AGESIC has a division dedicated to government bodies and processes (“organismos y
procesos”) that is in charge of managing relationships with other public institutions and seeks
to monitor and support the implementation of digital government policies, co-ordinate cross-
cutting projects and perform change management. AGESIC also has a strong PMO structure,
providing a centralised follow-up and support mechanism for digital government project
implementation.
Sources: OECD, 2016; OECD 2010; Desk research; Phone interviews.

Adopting a strategic approach to alternative ICT channels to maximise
the outreach of government in a cost-effective way

Despite the steady progress concerning Internet access in Indonesia
(19.16% Internet user growth per year since 2001), the number of Internet
users remains limited to 17.14% of the total population (WDI). Given this
reality, it seems necessary for the government to adopt strategies that ensure
inclusiveness and cost-effectiveness in service design and delivery, in order
to avoid risking new inequalities and digital divides. This suggests that the
Government of Indonesia needs to develop a sound and more structured
multi-channel service delivery approach that includes experimentation with
new channels for engagement in the design and delivery of services. Such an
approach has proven successful in the case of Chile (Box 5.7). Using
different platforms and delivery systems that reach out to a broader segment
of the population should be commended and encouraged.

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Box 5.7. ChileAtiende

“ChileAtiende” offers a national multi-channel one-stop shop for citizens to
carry out their business with government. It has a national network of more than
200 offices, a national call centre and a digital platform (web and social
networks), as well as ChileAtiende vans that can cover remote rural areas,
through which citizens can access multiple services and benefits without having
to contact multiple government offices. Previously, citizens needing to complete a
procedure with the state had to identify which institution delivered the service,
where its offices were located and contact it directly to find out the requirements
to access the service. This was costly in terms of time and money.

The project was evaluated in 2014 by an external consultancy. The
conclusions indicated that the service had saved Chilean citizens up to 2 165 193
hours of their time and CLP 10 600 million (Chilean pesos) or USD 14.9 million
between 2012 and 2014.

Source: www.oecd.org/gov/chile-chileatiende.pdf.

For instance, by 2002, the Department of International Development of
the United Kingdom (DFID) realised that, in countries like Botswana,
Ghana and Uganda, mobile airtime, which was easily transferable, was been
used as a proxy currency. It later found the same pattern in Kenya and
Tanzania as well. Vodafone developed a mobile payments platform, M-Pesa
(literally mobile money), for Kenya and Tanzania, providing government,
companies, NGOs and citizens with an efficient, fast, secure and transparent
way to make cash transfers. The government and the central bank of Kenya
worked along with Vodafone to develop an appropriate regulatory
framework for mobile payments that respected security standards. Several
stakeholders and specialists were consulted, including the DFID, the United
Kingdom’s Financial Conduct Authority (FCA) and the payment card
industry, to understand how best to adapt the Know Your Customer (KYC)
requirements for payment regulations. Regulators provided a special licence
allowing the new system to operate through branchless banking to reduce
costs and foster financial inclusion with success. Today, Kenyans are able to
complete a wide variety of transactions using their phones, including paying
for public transportation4. This service does not require a data plan, and
account fees are very low, which helps include the poorest section of the
population. Beyond specific mobile platforms for providing public services,
some governments have sought to implement broader mobile government
programmes within their digital government strategies, such as in the case of
Singapore (Box 5.8).

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Box 5.8. Singapore: Mobile Government Programme

The Mobile Government Programme is part of Singapore’s broader digital
government strategy and has three key objectives for the 2011-15 fiscal years:

• Support and guide agencies to deliver feature-rich government mobile

services (m-Services) to enhance customer experience and satisfaction;

• Aggregate demand for mobile research, tools and services that help

agencies in the efficient and consistent implementation of mobile services;
and

• Improve or maintain Singapore’s standing in international rankings,

through the delivery of high-quality services via the mobile channel.

Today, more than 300 mobile government information sources and services
are available. “M-Gov” also established a whole-of-government central short-
messaging-service platform, known as OneSMS, to facilitate the development of
m-services by government agencies through demand aggregation. The
programme was co-developed by the Ministry of Finance and the Infocomm
Development Authority of Singapore as part of the Integrated Government 2010
(“iGov2010”) e-government master plan for the years 2005-10, motivated by the
increasing penetration rate of mobile phones, especially smartphones, and the
increasing number of transactions through mobile phones, either through mobile
browsers or native mobile applications.

Sources: www.ida.gov.sg/Programmes-Partnership/Store/M-Government;
www.un.org/esa/socdev/egms/docs/2013/ict/KarenTan.pdf.

The limited access to fixed broadband and rapid uptake of mobile
technologies in Indonesia, which counts over 120 mobile phone
subscriptions per 100 people, provides the Government of Indonesia with an
additional channel to deliver and improve its services (OECD/ITU, 2011).
The massive adoption of mobile communications not only provides citizens
with a convenient way of communicating with each other and accessing
information and services but also allows governments to reach out to a
greater number of people than ever before, even in remote and inaccessible
regions. Governments increasingly use mobile technologies to provide
information, exchange data and deliver services. M-Government refers to
the use of mobile technologies to support public-sector operations and
service delivery for improved public-sector performance. However, these
programmes should not put the emphasis on the use of mobile technologies
but rather on the needs of end users and the public sector (OECD/ITU,

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2011). Such an approach can help the Government of Indonesia provide
more convenient access to existing services as well as enable the design and
delivery of new services (e.g. m-health and telemedicine; see Box 5.9).

Box 5.9. Denmark: Digital welfare – Tele-medical ulcer assessment

Municipal nurses used to care for ulcers in the home of the patient.
Traditionally, when in doubt or if the ulcer was deteriorating, the nurse had to
send the patient to the hospital for assessment. After the implementation of the
tele-medical ulcer assessment programme, municipal nurses still care for ulcers at
the home of the patient; now, however, they communicate directly with the
hospital through a web journal from their cell phones or tablets. They also upload
photos to the online platform containing the journal of the ulcers. In most cases,
this enables hospital experts to assess the ulcer without seeing the patient,
providing financial benefits for regions and municipalities and convenience
benefits for patients, who no longer need to travel to the hospital as often.

The use of social media allows citizens to express their views,
politicians to frame their opinions and governments to better understand
social interactions, public opinion and human behaviour, as well as
encourage collaboration and leverage ideas (Mickoleit, 2014). Regardless of
the dynamic use of social media by the urban youth mentioned earlier in this
chapter, the Government of Indonesia has not been able to develop a
significant online or social media relationship with the public. Despite the
dynamism of young users in the social media scene, the outreach capacity of
institutional accounts remains low on both Twitter and Facebook, two of the
most popular social platforms available (see Figures 5.11 and 5.12). The
Government would benefit from a structured and strategic approach to social
media use that helps increase its outreach, engage with stakeholders,
crowdsource ideas, deliver services, monitor impact, analyse data and
identify social trends.

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Figure 5.11. Selected central government Twitter accounts
Number of followers as percentage of the domestic population as of March 2015

0 0.01 0.02 0.03 0.04 0.05 0.06 0.07

Presidencia_Ec | Ecuador 0.06

Number10gov | United Kingdom 0.048

tcbestepe | Turkey 0.028
WhiteHouse | United States 0.019
0.0107
PresidenciaMX | Mexico

bluehousekorea | Korea 0.0036

IstanaRakyat | Indonesia 0.0013

Source: Twiplomacy 2015; World Development Indicators, 2014.

Figure 5.12. Indonesian institutional accounts on Facebook

Engagements per follower Likes as % of the total population

Ecuador Singapore
France Ecuador

United States United States
Philippines Korea
Germany
Brazil Philippines
Indonesia Colombia
India
Singapore United Kingdom
Colombia Brazil

United Kingdom France
Korea Germany

India
Indonesia

0 2 4 6 8 10 12 14 0 0.005 0.01 0.015 0.02 0.025 0.03

Only institutional accounts for the head of state or the head of government are considered. Likes,
comments and shares of posts are considered forms of engagement. Likes as % of the total population
considers the number of people that like/follow the official page of the institution.

Source: World Leaders on Facebook 2016, World Development Indicators, 2014.

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The OECD has noticed that, while governments are increasingly present
on social media, they still primarily use this channel as a traditional
communications tool rather than for opening up policy processes or for
innovative ways of delivering public services. Only 50% of the countries
responding to the OECD Survey on Social Media use by Governments
(2013) have a strategy or clearly identified objectives, and only 19% are
using metrics to assess the impact of their social media usage.

The strategic use of social media can help the Government of Indonesia
promote political inclusion and participation of younger segments of the
population through channels that are better adapted to their preferences. To
achieve this, however, the GOI must adapt its approach to ensure that the
language it uses and its responsiveness is in tune with the public’s
expectations.

Moreover, crowdsourcing ideas and increasing participation in the
design of policies and services through social media or alternative channels
would require dedicating substantial resources to participative development
and follow-up procedures to ensure responsiveness. The GOI may therefore
consider exploiting synergies with existing initiatives to maximise impact.
There seems to be substantial room for collaboration and resource sharing in
the public consultation forums, such as LAPOR, which may produce
economies of scale and facilitate more coherent and efficient management
and monitoring of citizen feedback.

While most governments are still at the very early stages in their use of
social media, some countries are already making substantial progress in this
area, paving the way for a new level of maturity in the area of social media
policy. For instance, in Australia, the structured monitoring and analysis of
social media activity led to the realisation that there was space for the
government to provide information for young people about the financial
support available to help them study (OECD, 2014). In Spain, the national
police have developed an approach to social media use that seeks to support
its mission and deliver better services to citizens (see Box 5.10).

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Box 5.10. @Policia – Purpose-oriented social media use by the
Spanish national police

Policing depends heavily on people’s confidence and co-operation to deliver
an effective public service. The Spanish national police force (Cuerpo Nacional
de Policía de España) identified the potential of social media early on. In 2009, it
committed to using social media as an additional lever to improve its services.
The commitment was backed up with financial and human resources, notably the
recruitment of a social media expert, Carlos Fernandez, to lead the effort. Today,
a dedicated team of ten people interacts on various social media platforms to
prevent, dissuade and combat crime.

The Spanish police’s constant and genuine engagement is catching on with the
public. At the time of writing, the @Policia Twitter account has over 1.25 million
followers (@Policia), its Facebook page has over 220 000 fans (PoliciaNacional)
and the videos on its YouTube channel were viewed over 5.6 million times
(Policia).

A large part of this social media success is due to a deliberate choice of topics
and style. Unlike many other government institutions, the Spanish police force
does not use social media for “corporate” communications such as relaying the
agendas of its leadership or to issue traditional press releases. Instead, it uses
social networks to support the police’s primary mission by sending content-rich
messages that use “plain” language, often humorous or provocative, in order to
attract a large audience.

Such genuine community interaction has led to several mission-critical
successes. One of those was the recent arrest of a murderer who had been on the
loose for months after his conviction in 2013. On 14 January 2014, the Spanish
national police launched a co-ordinated media campaign with heavy use of social
media to diffuse photos and information about the wanted individual. The posts
went viral, i.e. they were replicated and diffused by a very large number of social
media users, and triggered several citizen reports leading to the arrest of the
convict in less than one day

One Data for Sustainable Development

The use of ICTs can also have a substantial impact on the public sector’s
ability to make decisions based on evidence, thereby improving the
transparency and accountability of such decisions and leading to enhanced
public-sector performance in the form of better policies, services and
communication with citizens and businesses. To this end, the Government of
Indonesia must recognise the value of public-sector data as a strategic asset.

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The Ministry of Health and the Ministry of Religious Affairs have
separately looked to enhance data management inside their ministries
through the development of guidelines and draft ministerial decrees. These
and other intra-institutional initiatives to improve data quality, governance
and handling signal that the current level of institutional development calls
for an overarching policy focused specifically on providing a government-
wide framework for data management and governance. The Executive
Office of the President has already identified this need and in 2014 launched
the “One Data for Sustainable Development” initiative. It has two main
objectives: 1) enhance data management across the public administration to
support evidence-based decision-making; and 2) support open government
data efforts.

Improving public-sector intelligence through enhanced data
management

As noted in interviews with the OECD by the Executive Office of the
President, the “One Data” initiative is currently working on a data policy
and guidelines for public institutions. These would provide a common
framework to limit redundant efforts and improve the quality, management,
interoperability and integration of government data and metadata, and foster
a data-driven public sector (Principle 3 of the OECD Recommendation) to
support openness, transparency and sustainable development. The objectives
of such a policy should include: 1) better exploiting digital technologies and
data analysis to understand societal problems; 2) embedding data use
throughout the policy cycle; and 3) putting in place governance
arrangements to ensure responsible and coherent use of data that benefits
citizens and strengthens public trust.

Making this policy successful will require considering the structural
enablers for its success, such as infrastructure, knowledge and skills, as well
as the overall incentive structure that will lead to the digital and data-driven
transformation of the public administration in support of openness and
sustainable development.

The development of this essential policy tool will also offer the
Government of Indonesia a favourable occasion to determine a strategic
approach that will enable it to seize the opportunities provided by big data
analytics (see Box 5.11 for how Pulse Lab Jakarta is using analysis of social
media to understand public perceptions of immunisation). The digitisation of
society has exponentially accelerated the production of data. The increasing
availability and accessibility of data is a result of the increased use of digital
devices such as computers, mobile phones and tablets. The increase in data
production has also been driven by the development of the Internet of

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Things,5 the growing use of digital cameras and recorders and the
digitisation of books, records and archives. The digital era has made
available a massive amount of data and an equally diverse number of data
storage possibilities.

Box 5.11. Understanding public perceptions of immunisations using
social media

This project examined how the use of social media data and big data analytics
could be used to understand public perceptions of immunisation. In collaboration
with the Ministry of Development Planning (Bappenas), the Ministry of Health,
UNICEF and the World Health Organisation (WHO) in Indonesia, Pulse Lab
Jakarta filtered tweets for relevant conversations about vaccines and
immunisation. Findings included the identification of perception trends, including
concerns around religious issues, disease outbreaks, side effects and the launch of
a new vaccine. The results built on Global Pulse’s previous explorations in this
field, confirming that real-time information derived from social media
conversations could complement existing knowledge of public opinion and lead
to faster and more effective response to misinformation, since rumours often
spread through social networks.

Source: www.unglobalpulse.org/immunisation-parent-perceptions.

Big data analytics refers to the data processing techniques for analysing
these new data sources that are available in high volume, highlighting
patterns and trends, uncovering unfamiliar correlations and other valuable
information for sound decision making. The availability of these data and
data processing techniques is having a particularly strong impact in the field
of public policy and social sciences and significantly improving the
understanding of human behaviour. The distinctive features of today’s big
data in terms of velocity, volume and variety of data have been enabled by
“recent exponential increases in telecommunication bandwidth that connects
a network of centralised and decentralised data storage systems, which are
processed thanks to digital computational capacities” (Hilbert, 2016).

The amount of data produced by digital behaviour can often become an
efficient alternative to traditional data sources, such as surveys. Big data
analytics can, for instance, successfully predict the spread of diseases and
accurately estimate unemployment with real-time data. Big data can provide
powerful insights in the areas of economic activity, healthcare, public
transportation and urban planning (Box 5.12), disaster and risk management,
service design and delivery and policy-making in general, ultimately

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enhancing public-sector performance and productivity. This new data
processing technique is opening up a broad range of opportunities for both
the private and the public sector. Not taking a strategic approach in this
domain could lead to accentuated digital divides within and across countries,
as well as loss of productivity and competitiveness for an emerging
economy such as Indonesia.

Box 5.12. Singapore: Using open data and big data analytics for
better urban transport

Like other metropolitan hubs, Singapore has faced the inevitable problem of
heavy congestion at peak hours. However, significant improvements have been
made thanks to the use of data from the smart travel cards and GPS data.

These data provided the opportunity to develop detailed models for how bus
users move through the city, helping the government understand traffic patterns,
how citizens use the urban transport system and key problems with the existing
bus routes.

Using these data, developers based in California created an analytical platform
that is able to identify traffic patterns and provide authorities with precise
information mapping active trains and buses, with meters letting them know how
full each one is, as well as how many commuters are at each station and what the
estimated waiting times are. The analysis of this information helps the authorities
decide where more buses and trains are needed or how to provide incentives for
users to take different routes. The system produced a 13% drop in peak time
travel. This experience has since been replicated in Bangalore and São Paulo to
improve public transport.

Since 2012, Indonesia has benefited from a pilot project of the UN
Global Pulse that seeks to create capacity and promote data innovation for
policy making. This initiative, called Pulse Lab Jakarta, includes UN staff,
the Ministry of National Development and Planning (Bappenas), the
Ministry of Health and the Ministry of Communication and Informatics. The
Pulse Lab Jakarta regularly organises thematic data innovation days with
civil servants to highlight the potential of using big data and other
innovative data sources and techniques that can support evidence-based
policy making (Box 5.13). The initiative holds great potential for building
capacity at the central government and would benefit from the strategic and
financial support of the Centre of Government to maximise the impact of the
initiative, as the period of financial support from the UN Global Pulse is
approaching its end. Providing stability to this initiative could ensure a sense
of ownership by the Indonesian public sector.

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Box 5.13. Pulse Lab Jakarta: Mining citizen feedback data for
enhanced local government decision making

The Pulse Lab Jakarta performed a feasibility study on the use of
crowdsourcing as a tool to provide real-time data to local governments to support
decision making. The UN Global Pulse summarises the project:

“This feasibility study used crowdsourcing to track commodity prices in near
real-time in areas where the availability of other data sources was limited. High-
resolution and high-frequency food price trends were derived from reports
generated by ‘citizen reporters’. The study was conducted in Nusa Tenggara
Barat, one of Indonesia’s poorest provinces, comprised almost exclusively of
informal, cash-only markets and stalls. The study involved recruiting a trusted
network of local citizen reporters to submit food price reports via a customised
mobile phone application. The tested crowdsourcing method could be improved
by developing a standardised approach to the ‘bunch measurement’ of staples so
that it could be effectively deployed in locations where standardised weights and
measures are absent. Crowdsourcing technologies, which capture high-frequency
data on local trends, are best deployed in areas where traditional data collection
methods are difficult or costly due to a lack of geographic proximity, high
insecurity or high food price volatility.”
Source: www.unglobalpulse.org/projects/feasibility-study-crowdsourcing-high-frequency-
food-price-data-rural-indonesia.

Building an Open Government Data ecosystem
A growing number of governments have developed policies and

initiatives to design and implement Open Government Data (OGD) within
the broader strategic frameworks for digital government. OGD refers to the
release of data collected and produced by public organisations while
performing their tasks or to data commissioned with public funds. The goal
is that OGD is released in open formats that allow for their free use, re-use
and distribution by anyone, subject only to (at the most) the requirement that
users attribute the data and that they make their work available to be shared
as well (Ubaldi, 2013). Box 5.14 provides a description of the legal and
institutional infrastructure for open government data in Korea, as well as
examples of how the data has been utilised to provide applications that have
enhanced service provision.

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Box 5.14. Open Data in Korea

Korea’s Open Data Law and institutional framework

Korea's Open Data Law provides the legal basis for access to data and for its commercial
usage. The Law also lays out the open data governance framework, which is led by a high-
level council co-chaired by the Prime Minister and a private sector representative. The council
also includes central and local government representatives as well as civil society
organisations. This framework facilitates cross-government co-ordination and public-private
sector co-operation.

The Ministry of Interior leads open data management and the Open Data Centre at the
National Information Society Agency provides policy and technical support, including the
operation of the open data portal, data.go.kr. In addition to the governance framework, the Law
provides a mechanism for dispute resolution between citizens and public-sector organisations
through the creation of the Open Data Mediation Committee.

Notably, the legal basis for open government data is different from the laws and processes
concerning access to information (governed through the Information Disclosure Act and
housed at open.go.kr). The legal foundation provided by the open data law helps to ensure the
stability of open data policy in Korea and provides a focus on creating economic and social
value.

Case studies of open data applications in Korea

The growth of open data in Korea is reflected in by part by the number of applications
registered on the Open Data Portal (data.go.kr), which increased from 42 at the end of 2013 to
over 800 in April 2016. Some notable examples include:

Bus information applications (e.g. Seoul Bus App), which use bus data from local and
central governments to provide real time information on bus arrivals. Parking information
applications (e.g. Moduparking, ParkingPark) use parking data from local governments to
allow drivers to search and compare nearby parking spaces (from both public and private lots)
and relevant information such as operating hours, prices, capacity, etc.

In healthcare, hospital information applications (e.g. Medilatte, Hidoc, Goodoc) use hospital
data from the Ministry of Health and Welfare and related agencies to allow citizens to search
and compare nearby hospitals and clinics and relevant information such as services provided,
doctors, prices, operating hours, etc. This provides citizens with a tool to find health services
that suit their needs.

Source: Government of Korea.

The Government of Indonesia has recognised on several occasions the
potential OGD could have in enhancing the transparency, accountability,
integrity and performance of the public sector. Its central open data portal is

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one of Indonesia’s current Open Government Partnership commitments, and
the use of OGD for anti-corruption is part of the country’s National Strategy
on Corruption Prevention and Eradication. Moreover, Indonesia was an
active contributor in the elaboration and adoption of the International Open
Data Charter, to the development and adoption of the G20 Open Data
Principles for Anti-Corruption and has published data related to its
extractive industries collected through its membership in the Extractive
Industry Transparency Initiative (EITI) (Box 5.15). All of these
engagements prove Indonesia’s commitment and support for OGD as tool to
foster an open government.

In line with these commitments and policy objectives, the Government
of Indonesia has taken decisive steps to develop a technically advanced and
user-friendly central data portal, which it launched in May 2014. The central
government has made significant efforts in providing easy access to key
datasets to improve transparency of key public-sector activities. However,
these efforts have encountered significant challenges in maximising the
impact of the government’s Open Data initiative. First, while the existing
Public Information Disclosure Act of 2008 (FOI) serves as a foundation for
Open Data, it does not mention that the disclosure of data must be done in
open formats, leading public authorities to feel that providing data in open
formats is optional, thus creating barriers to data re-use. Furthermore, over a
year and a half since its launch, the central government open data portal still
offers only 1 042 datasets from 27 government institutions and 3 subnational
governments, showing the lack of awareness of the relevance of opening up
government data and the lack of ownership of the OGD agenda across the
public sector. Finally, the overall lack of data skills across society is
currently undermining the government’s ability to provide high-quality
datasets and the society’s ability to re-use the data to create public value.

These challenges suggest that there is a need to revise the existing legal
and regulatory frameworks to set an “open by default” standard, to which
Indonesia has already committed internationally6, to develop a coherent
national OGD strategy with strong ownership across levels of government
and a sense of collective commitment among civil servants. Indonesia
should also develop a plan to enhance ICT and data skills across society to
reduce existing forms of the digital divide that tend to reinforce inequality
and political and social exclusion.

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Box 5.15. Extractive Industry Transparency Initiative: Indonesia

The Extractive Industry Transparency Initiative (EITI) is a global standard for transparency
in government revenues from extractive industries that was launched in 2002. The initiative
requires governments to report their revenue from the extractive sector and for companies
within the same sector to report their payments to government in the form of taxes, royalties or
payments in kind. An independent auditor assesses these two reports, published online. A
multi-stakeholder group composed of government institutions, extractive industry private
sector firms and civil society organisations governs the Indonesian chapter of EITI. Indonesia
became an EITI candidate in 2010 and was declared compliant by the EITI International Board
on 15 October 2015.

EITI Indonesia has amassed a considerable amount of valuable data concerning the
country’s extractive industries. To improve transparency and accountability, the initiative has
been working to open up its data through the national Open Data Portal. The national chapter is
currently developing a new data portal, allowing the initiative to publish data in open formats.
Through this portal, Indonesian citizens will be able to produce visualisations of the data. This
tool is expected to improve the understanding of the data in a context of limited data skills.

Sources: http://data.go.id/organization/about/eiti-indonesia; http://eiti.org; Interview.

Furthermore, it is important to highlight that, while the OGD agenda can
help make progress in public-sector transparency, accountability, integrity
and performance, opening up valuable datasets in a dynamic OGD
ecosystem can help societies find innovative ways to solve social problems,
creating substantial social and economic value. For instance, Mexico City
was able to find a smart solution to the increasing insecurity related to fake
taxis robbing customers using open government data (see Box 5.16). In
Denmark, HusetsWeb, a start-up, uses open government data to develop
technological solutions that provide households useful information on their
energy consumption patterns and tips for energy optimisation.

Box 5.16. Hacking insecurity in Mexico City

Using taxis in Mexico City entails incurring security risks. Criminals often use vehicles
camouflaged to look like licenced taxis to rob customers, with as many as 400 taxi robberies
reported in 2013. This phenomenon has been driving users to avoid taxis and opt for more
expensive transportation services. Mexico City’s innovation lab, Laboratorio para la Ciudad,
has developed an innovative app using open government data to help tackle the security
concerns of taxi users. This app allows users to enter the licence number on the side of the car
or snap a photo of the cab’s licence plate. The app will then cross-reference this information
with city data to determine if it is a registered taxi. The app also includes a button that
automatically alerts the police department in case the user runs into trouble.

Source: http://citiscope.org/story/2014/mexico-city-experimental-think-tank-city-and-its-government.

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To achieve such a level of maturity, the government must also take
decisive steps to support the development of an ecosystem that is able to
realise the full potential of OGD, including fostering innovation. Taking
OGD to the next level requires that data be seen as a strategic asset, which
has implications for the public sector in terms of governance to support the
whole data and information value chain, including skill requirements and
investments in data infrastructure. To foster innovation by using data, the
Government of Indonesia should systematically promote the engagement of
and collaboration with the communities of data producers, providers and
users to identify and release valuable datasets. The effective re-use of
government data – which is an essential condition to deliver value – entails
that open data is relevant, easily accessible and re-usable by all.

Governments can use different tools to stimulate the use of OGD for
value creation. Good practices include the development of one-stop-shop
portals for open government data that serve as a single window/point of
access for data users to access available datasets in open formats, ideally
having undergone a process of quality assurance and being complemented
with useful metadata (see Box 5.17 for the example of the Jakarta Smart
City Portal). Furthermore, strategic use of hackathons, awards, grants and
other pro-active approaches to promoting data re-use can play a decisive
role in fostering innovation and value creation.

To assist governments measuring the impact of their OGD initiatives,
the OECD has developed the OURdata Index (Open, Useful and Re-usable
data index), launched in the OECD publication “Government at a glance
2015”. This index assesses governments’ efforts in relation to three fronts:
1) increasing data availability on the national portal; 2) increasing data
accessibility on the national portal; and 3) providing active support for the
re-use of data.

Box 5.17. Jakarta Smart City Portal

To support Jakarta’s transformation into a smart city, the government of the
City of Jakarta has launched a Smart City Portal. The portal allows citizens to
understand the components of a smart city, access the map of the city, and access
and request information. The website links to the city portal, which allows
citizens to make public complaints, access public services and open data, as well
as use the apps developed with open data of the government of Jakarta. If
complemented with the right innovation ecosystem, this portal may serve as a
tool that contributes to the transformation of Jakarta into a smart urban
agglomeration characterised by large economies of scale, an innovative economy,
a highly skilled workforce, smart urban and transport arrangements, lower
environmental impact and high living standards.

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Data accessibility and availability are necessary, but insufficient
conditions to ensure the re-use of data can limit the capturing of OGD
benefits from a social, economic and good governance perspective (e.g.
transparency, integrity, accountability). Re-use of data by the public sector,
civil society organisations, the private sector and a host of other actors is a
sine qua non condition to delivering the benefits of open data. In this sense,
the OURdata Index aims to help strengthen governments’ focus on effective
outcomes and keep the focus on the overall objective of actively fostering
stakeholders' engagement in data re-use. The OURdata Index is based on the
OECD methodology for measuring Open Government Data (Ubaldi, 2013)
and on the G8 Open Data Charter, encapsulating the first internationally
agreed-upon set of principles on open data. This is essential, as the OURdata
Index is also intended to help governments monitor their progress in
implementing their international OGD commitments. Ultimately, the
OURdata Index aims to support governments in designing and
implementing OGD strategies that deliver value to the public.

The OECD assessment (Figure 5.13) shows that the Government of
Indonesia has made considerable progress in its OGD agenda in the fields of
data availability and accessibility, comparable to the highest OECD
standards. However, considerable progress can still be made in the
promotion of the re-use of OGD. While the Government of Indonesia has
certainly started making efforts in this front, with, for example, the
organisation of hackathons, these initiatives would benefit from being more
systematic and structured. Based on the objective of the hackathon or event,
public authorities should identify audiences. NGOs, start-ups and civic
developers have different priorities and datasets of preference when working
with open data. Moreover, depending on their stage of development, these
different stakeholders may be looking for datasets with distinctive
characteristics or levels of sophistication.

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228 – 5. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA No national OGD portal

Figure 5.13. OURdata Index: Open, useful and reusable government data, 2014
Composite index from 0 lowest to 1 highest

Data availability Data accessibility Government support to re-use
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0

1. Data for the Czech Republic, Hungary, Iceland, Israel and Luxembourg are not available. Data
for Indonesia are for 2015.

Source: 2014 OECD Survey on Open Government Data.

Hackathons also offer an opportunity to engage with users, strengthen
bonds within the data-user communities and listen to their needs. Creating
and strengthening feedback loops can help governments better understand
the needs of the different audiences and groups of data users to respond
better to their data needs.

Recommendations

• To unlock the transformative potential of technologies in changing
government-society dynamics, the Government of Indonesia
should make substantive efforts to achieve scale for its key
initiatives. Participatory platforms should be expanded to achieve a
critical mass of users, and other initiatives of potentially high impact
should be strengthened and streamlined for the government to be
able to reap its full benefits (e.g. “LAPOR”, public dialogues,
hackathons, service design standards). This will require additional
resources and plans to develop institutional capacities, regulatory

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2295. DIGITAL GOVERNMENT AS AN ENABLER FOR OPEN GOVERNMENT IN INDONESIA –

frameworks – e.g. standards for service design – robust co-
ordination and peer-learning mechanisms.

• The use of digital technologies should be framed by an
overarching policy to help ensure strategic coherence across the
administration. This policy should be aligned with broader policy
objectives – such as those on open government and sustainable
development – and with public-sector reform strategies and action
plans. A successful policy would provide coherent incentives to
create a culture that strengthens the use of technology for more
open, innovative and participatory service design and delivery.
Involving the relevant stakeholders in the development of the digital
government policy will help ensure that the resulting strategies
appropriately reflect the different views. This will also promote the
development of a common vision and align objectives with the
required levels of ownership for successful implementation and to
deliver impact.

• The development of the policy with contributions from all
stakeholders also provides the opportunity to design sound
institutional frameworks with desirable levels of accountability,
control and transparency that should include strong co-ordination
mechanisms at the strategic and operational levels, ensuring
alignment with the government’s ambitions and institutional
mechanisms to facilitate its implementation. Institutional
arrangements should clarify roles and responsibilities in digital
government policy making, particularly between the Ministry of
Administrative and Bureaucratic Reform and the Ministry of
Communications and Information Technology. The Government of
Indonesia would also benefit from a Chief Digital Officer under the
National Chief Information Officer that can support the digital
transformation, making government digital by design.

• The Government of Indonesia should align incentives for public
institutions and civil servants to respond to national policy
objectives and facilitate a fundamental cultural shift across the
government toward more open, inclusive and citizen-driven
processes and toward the development of ICT and data skills. To
achieve this, the governance frameworks of digital government
should equip the co-ordinating unit with the adequate mix of policy
levers (“carrots” and “sticks”) to be able to induce the expected
behavioural change across public institutions.

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• The development of the National E-Government Master Plan
should be complemented with the establishment of a business
case methodology and an ICT project management model that
can help public institutions better plan and structure their ICT
investments (Principles 9 and 10 of the OECD Recommendation).
These management tools would allow public institutions to clearly
identify expected benefits, manage risks, monitor the
implementation of ICT projects, identify drivers of failure and
success and make adjustments as required. The combination of the
tool would allow the Government of Indonesia more effectively to
monitor and evaluate ICT initiatives at both a micro and macro
level.

• The Government of Indonesia should develop a strategic approach
to the use of alternative channels for public engagement and
service delivery, such as social media platforms and mobile phones.
This new approach should recognise the potential of social media
and mobile devices as sources of data, allowing the Government of
Indonesia to use predictive analytics to spot trends, analyse social
interactions and determine service users’ needs. A strategic
approach in the use of this channel can help the Government of
Indonesia increase its outreach for service delivery to vulnerable or
excluded segments of the population living in remote areas (e.g. m-
services).

• The Government of Indonesia should recognise data as a strategic
asset and accordingly develop governance frameworks,
infrastructure and institutional capacities to support the
strategic use of government data for decision making (Principle 3
of the OECD Recommendation). Aside from the development and
implementation, an initial step in building capacities could be
supporting the expansion, sustainability and streamlining of the UN-
sponsored Pulse Lab Jakarta to build data analytics capacity in the
public sector.

• Indonesia should make efforts to develop a dynamic open
government data ecosystem, which will require addressing legal
and regulatory challenges and limitations, raising awareness and
ownership, developing data skills across society, and actively
engaging with data producers, providers and users to identify
valuable datasets and foster re-use that can deliver social, economic
and good governance value.

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Notes

1. Referring to the ability of the public sector to collect, process and
interpret data to inform public action and decision making.

2. “Investors set their sights on Indonesia’s tech sector” in Financial Times,
7 December 2014, www.ft.com/cms/s/0/4fd5286e-7c32-11e4-a695-
00144feabdc0.html#axzz3wHg3HHYr (accessed 18 December 2015).

3. www.detiknas.go.id/profil/.
4. www.betterthancash.org/news/blogs-stories/the-better-than-cash-journey-

kenya-and-rwanda.
5. The Internet of Things refers to the network of physical objects embedded

with software, sensors and network connectivity allowing these objects to
collect and exchange data. Principle 1 of the G20 International Open Data
Charter: “Open by default”.

References

APJJI (2014), Profil Pengguna Internet Indonesia,
www.slideshare.net/internetsehat/profil-pengguna-internet-indonesia-
2014-riset-oleh-apjii-dan-puskakom-ui (accessed 22 January 2016).

Boston Consulting Group (2013), Asia’s Next Big Opportunity: Indonesia’s
Rising Middle-Class and Affluent Consumers. BCG Perspectives.
www.bcg.fr/documents/file128797.pdf (accessed 22 January 2016).

Government of Indonesia (2012), National Strategy on Corruption
Prevention and Eradication (2012-2025).

Hilbert, M. (2016), “Big Data for Development: A Review of Promises and
Challenges” in Development Policy Review, 34 (1): 135-174.

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Mariscal, J. and Bambrilla, C. (2012), “Conectividad institucional: El caso
de México” in Information technologies and international development
journal, Vol 8, Issue 4 Winter (Special Bilingual Issue: Research on
ICT4D from Latin America).

Mickoleit, A. (2014), "Social Media Use by Governments: A Policy Primer
to Discuss Trends, Identify Policy Opportunities and Guide Decision
Makers", OECD Working Papers on Public Governance, No. 26, OECD
Publishing, Paris, http://dx.doi.org/10.1787/5jxrcmghmk0s-en.

OECD (forthcoming), OECD Public Governance Review of Spain.

OECD (2015), Government at a Glance 2015, OECD Publishing, Paris,
http://dx.doi.org/10.1787/gov_glance-2015-en.

OECD (2015), Digital Government Toolkit.

OECD (2014), Recommendation of the Council on Digital Government
Strategies. www.oecd.org/gov/public-innovation/Recommendation-
digital-government-strategies.pdf (accessed 22 January 2016).

OECD/ITU (2011), M-Government: Mobile Technologies for Responsive
Governments and Connected Societies, OECD Publishing, Paris,
http://dx.doi.org/10.1787/9789264118706-en.

OECD (2010), Denmark: Efficient e-Government for Smarter Public Service
Delivery, OECD Publishing, Paris,
http://dx.doi.org/10.1787/9789264087118-en.

Open Government Partnership (2015), Independent Reporting Mechanism
Report: Indonesia,
www.opengovpartnership.org/sites/default/files/Indonesia_Special_Acc_
Report_Public.pdf (accessed 18 December 2015).

Shim, D.C. and Eon, T.H. (2008), “E-Government and Anti-Corruption:
Empirical Analysis of International Data” in International Journal of
Public Administration, February, 31(3):298-316,
http://dx.doi.org/10.1080/01900690701590553.

Sujarwoto and Tampubolon G. (2013), “Deepening Digital Divide and
Widening Spacial Gaps in Indonesia 2005-2009”,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2348729 (accessed
23 December).

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Ubaldi, B. (2013), "Open Government Data: Towards Empirical Analysis of

Open Government Data Initiatives", OECD Working Papers on Public
Governance, No. 22, OECD Publishing, Paris,
http://dx.doi.org/10.1787/5k46bj4f03s7-en.
Utomo, A. et al.. (2013), “Digital inequalities and Young Adults in Greater
Jakarta: a Socio-Demographic Perspective” in International Journal of
Indonesian Studies, Vol. 1, pp. 79-109.

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Chapter 6
Open, transparent and inclusive budgeting in Indonesia

Applying open government principles to the budget process is an important
component of instituting open, transparent and inclusive government. The
OECD has developed principles for budgetary governance and has
highlighted best practices for budget transparency. This chapter assesses
public financial management in Indonesia against these principles and
standards, starting with an outline of principles, followed by an overview of
the situation in Indonesia. This chapter covers budget transparency, public
participation in budgeting and good practices in Indonesia; it also surveys
gender budgeting in Indonesia and assesses linkages between women’s
participation in budgeting and environmental sustainability. The
recommendations point to approaches and actions that could provide for
sound public financial management, strengthening budget transparency and
inclusiveness in Indonesia.

Note: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli
authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights,
East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

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Introduction

Budget transparency has become a broadly accepted principle of public
financial management over the past two decades. Budget transparency
promotes access to and openness about how financial resources are planned,
raised and used by governments. The principle of budget transparency
underpins sound public financial management and has in turn become a
cornerstone of public governance themes such as open government, civic
participation and public-sector performance.

Open, transparent and inclusive budgetary practices strengthen the
integrity, accountability and strategic focus of overall public governance. A
more transparent budget process promotes responsive and evidence-based
policy making, which in turn supports accountability for how public
resources are allocated and used. Although the budgeting process can often
be opaque and technical, proactive engagement between public bodies and
citizens can lead to more transparency.

The framework of how to promote these principles has been laid out in
two OECD publications. The OECD Best Practices for Budget
Transparency (2002) covers the preparation of the national budget and other
budget reports; specific disclosures and accounting practices for the budget;
and practices to promote integrity, control and accountability in budgeting.

In 2015, the OECD introduced the Recommendation on Budgetary
Governance, which broadens the traditional concept of fiscal transparency to
encompass civic engagement while making explicit the links with open data,
integrity and anti-corruption policy. The drive toward greater openness and
transparency in budgeting also supports broader OECD-wide priorities for
trust in government and for inclusive growth.

With regard to Indonesia, since 1998, the country has undergone an
extensive democratisation process that has led to fundamental changes in the
constitution and the legal framework to support transparency, participation
and accountability. As part of a broader reform agenda, the current National
Development Planning System1 and the de-centralisation process have
affected budgeting and public financial management. Specifically, within
the budgeting process, the House of Representatives (DPR, herein referred
to as Parliament) has become more closely involved in budget formulation,
approval and oversight.

As noted in Chapters 1 and 2, Indonesia’s system of national
development planning includes a long-term, medium-term and annual
strategic planning process, the latter directly feeding into the budgeting
process. This National Development Planning System encourages a
transparent and participatory approach and helps to foster linkages with

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national and international strategic frameworks through, for example, the
OGP National Action Plan and the 2030 Agenda for Sustainable
Development.

In broad terms, Indonesia’s developmental planning framework has
some advanced and innovative features. These aspects of the policy-
development framework may be characterised as broadly compatible with
the OECD Recommendation on Budgetary Governance, which explicitly
calls on governments to “ensure that budget documents and data are open,
transparent and accessible” and to “provide for an inclusive, participative
and realistic debate on budgetary choices”. The later phases of the budget
cycle and other domains of public financial management in Indonesia,
however, have not yet integrated transparency, openness and inclusiveness
into their systems to the same extent.

The key challenges faced by Indonesia in the area of budget
transparency and public financial management relate to the management of a
diverse, fragmented institutional landscape, also including the various levels
of government. This fragmentation leads to specific challenges in the area of
budget transparency: 1) uniform implementation of national laws, in
particular those relating to information transparency, regarding budget data
at every level of government and budget documents at every stage of the
budgeting process; and 2) the dissemination of good practices throughout all
reaches of public administration.

Furthermore, to ensure the best use of public funds, budget allocations
should reflect public needs, priorities and risks. Transparent and
participative practices can help promote such an alignment. To improve
these aspects of budgetary formulation in Indonesia, the government could
develop stronger structures to improve the engagement of the general public,
civil society and experts across the various phases of the budget cycle.
Indonesia’s strengths in terms of geographical and societal outreach could
also be leveraged further to promote equal opportunities of engagement for
the wider public.

The de-centralisation process in Indonesia started after 1998, and it
continues today. Multi-level budgetary governance poses challenges in
many countries, and given Indonesia’s geographical diversity, such
challenges are particularly acute in this country. Addressing these challenges
will involve: 1) finding the optimal balance for the provision of public
services and goods and responsibilities between the central and local level,
including enhanced co-ordination between the levels; 2) adopting a culture
of transparency, responsiveness and co-operation with local stakeholders at
each level of government; and 3) establishing efficient oversight
mechanisms linked to the increased responsibilities of the local government.

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OECD principles for open, transparent and inclusive budgeting

The 2015 OECD Recommendation on Budgetary Governance identifies
transparency, openness, participation, integrity and accountability as pillars
of modern budgetary governance. This section briefly presents outlines how
these principles should be assessed in practice, before applying them to the
case of Indonesia.

Budget documents should be open, transparent and accessible

Clear and factual budget reports as well as audit reports are needed to
inform key stages of the budget process such as policy formulation,
consideration and debate as well as implementation and review. Information
quality can be improved by focusing on relevance, accuracy, objectivity,
machine readability (open data) and reliability. The presentation of
budgetary information in a consistent format at key stages of the budget
process promotes effective decision making, accountability and oversight.
Citizens, civil society organisations and other stakeholders should be able to
routinely access full budget reports in a timely manner. The impact of
budget measures should be presented in a standard and user-friendly format,
which can be achieved by using a budget summary or a Citizen’s Budget.
Budget data should be designed and used in a way that facilitates other
important government objectives such as open government, integrity,
programme evaluation and policy co-ordination across national and
subnational levels of government.

Active management, monitoring and audit of the implementation of
the budget

Budget allocations should be implemented fully and faithfully by public
bodies, with oversight throughout the year by the Central Budget Authority
and line ministries as appropriate. Special-purpose funds and ear-marking of
revenues for particular purposes should be kept to a minimum. Ministries
and agencies should be allowed some limited flexibility, within the scope of
parliamentary authorisations, to re-allocate funds throughout the year in the
interest of effectiveness. Well-planned and well-designed budget execution
reports, including in-year and audited year-end reports, can inform future
budget allocations and contribute to accountability. The supreme audit
institution should be supported in its role of dealing authoritatively with all
aspects of financial accountability, including the publication of its audit
reports in a manner that is timely and relevant for the budgetary cycle.
Internal and external systems of audit and control should focus on the cost-
effectiveness of individual programmes, as well as assessing the quality of
performance accountability and governance frameworks more generally.

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Figure 6.1 highlights good practices in the three main aspects of the
transparent budget process, beginning at the bottom with the foundational
requirement for clearly defined roles and responsibilities, adequate
resourcing of the various actors and use of tools that support openness, such
as Citizens’ Guides. A transparent budget process produces high-quality
information for decision making and meets the quality standards for the
process itself.

Providing for an inclusive, participative and realistic dialogue
throughout the budget process and in particular on budgetary
choices

The parliament and its committees should be offered opportunities to
engage with the budget process using a strategic approach at key stages of
the budget cycle, both ex ante and ex post, as appropriate. All important
stakeholders – beginning with the parliament but also including citizens and
civil society organisations – should be engaged in order to pursue a realistic
debate about key priorities, trade-offs, opportunity costs and value for
money. Information on performance, outputs and impacts can help
parliament and citizens to understand not just what is being spent but also
what is being bought on behalf of citizens – i.e. what public services are
actually being delivered, to what standards of quality and with what levels
of efficiency. After the careful consideration of budgetary choices, all major
decisions should be handled within the context of the budget process.

Figure 6.2 highlights good practices in the three main aspects of an open
and inclusive budget process, beginning at the bottom with framework
conditions for clearly defined roles, scopes and objectives, adequate
resourcing of the various actors and use of tools that support participation in
budgeting, such as Citizens’ Guides. Similar to the progressive interaction
between government and citizens outlined in Chapter 3, citizen participation
in the budget process includes a range of degrees of interaction. For
example, a transparent budget process is one in which citizens’ access to
budgetary information is granted. Consultation goes one step further by
establishing a two-way relationship with citizens, who can provide feedback
to the public body soliciting input from them. Finally, active participation
refers to the case when citizens actively engage in a dialogue with a public
body, which does not necessarily have to initiate the process. A system of
active participation establishes a productive and respectful partnership
between the different parties, although the responsibility for the final
decision rests with the public body involved in the process. In the right
conditions and with proper supports, an inclusive and participative budget
process can produce high-quality outputs for budgeting, thus strengthening
social inclusion, accountability and trust.

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Figure 6.1. OECD flowchart of budget transparency

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Figure 6.2. OECD flowchart of openness, inclusiveness and participation in budgeting

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Budget transparency in Indonesia

Legal framework

The legal framework for budgeting and public financial management
that emerged following the 1997 Asian financial crisis and the transition to
democracy in 1998 comprises relevant laws in the areas of development
planning, budgeting, regional governance, state auditing, fiscal balance and
disclosure of public information. In addition to laws that deal with citizen
engagement and strategic planning more generally (such as Law No.
25/2004 on State Planning, Law No. 23/2014 on Regional Governance and
Law No. 14/2008 on Public Information Openness), the primary legal
documents that govern the budgeting and financial system in Indonesia, as
shown in Table 6.1, include:

Table 6.1. Legal framework for budget transparency and public participation

Law/Regulation Relevance for gender budgeting
Law No. 17/2003 on State Finances This law details the constitutional provisions of the budget process, mandates
specific milestones and dates for the preparation and adoption of the budget,
Minister of Home Affairs regulation No. specifies general principles and authorities for the management and
13/2006 on Guidelines for Management of accountability of state finances and establishes the financial relationship
Local Finances between the central government and other institutions. As such, this law is the
Law No. 1/2004 on the State Treasury basis for government regulations that qualify as part of budget transparency
across the budget cycle or during the public finance process.
Law No. 33/2004 on the Fiscal Balance Together with other ministerial edicts, these guidelines regulate the budget
formulation and adoption of local governments.
Law No. 15/2004 on the State Audit
This law outlines the responsibilities of the Treasury and articulates the
Law No. 6/2014 – The Village Law creation of treasurers in government ministries and agencies, together with
(January 2014) and Government general principles on the management and accountability of public funds.
Regulation No. 43/2014 on the This law outlines the responsibility of regional governments for managing their
Implementation of the Village Law (June own public finances, their revenue-raising authority and the system of
2014) transfers from the national government. It replaced an earlier law from 1999.
Government Regulation No. 60/2014 on This law outlines the operational framework of the Supreme Audit Institution of
Village Grants (July 2014) and the Republic of Indonesia (BPK) and mandates the BPK as a professional and
Government Regulation No. 22/2015 (May independent institution required to submit its reports to Parliament.
2015) These regulations change the legal status of villages by increasing their
Law No. 23 of 2014 on Regional authority and responsibility, establishing a new institutional set-up for
Governance and Government Regulation community development in villages. The law increases direct transfers to the
38/2007 villages – districts have to transfer 10% of fiscal balance funds to villages,
complemented by an additional 10% arriving from the central government.
These regulations cover the scheme, prioritisation and reporting of funds
received from the national budget.

This law and regulation outline how governance authority is shared between
the central and local governments.

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Along with the democratisation process, 2008 marked the adoption of
the Public Information Disclosure Act, which became effective in 2010,
providing a solid basis for budget transparency and paving the way for
public participation in the budgeting process.

The role of Parliament

The enactment of the laws related to the budgetary process were part of
a broader reform agenda, moving away from the budget process being
conducted predominantly by the government toward a system in which the
Parliament is more deeply involved in budget formulation, scrutiny,
approval and oversight. Since these reforms led to the excessive use of
parliamentary time in the detailed scrutiny of the budget, in 2014, the
Constitutional Court withdrew the Parliament’s authority to scrutinise the
budget proposal in such detail, in order to strengthen the strategic input of
the Parliament’s feedback and amendments during the legislative phase of
the budget process. As a result, the role of Parliament in the budgetary
process is evolving, allowing for improved quality outputs and strategic
oversight of the budget.

Linked to the Parliament, the Bureau for Analysis of State Budget and
Annual Budget Implementation (a form of “parliamentary budget office” or
PBO), with a capacity of around 40 people, strengthens the independent
input to macroeconomic forecasts and analysis, and more generally, it
supports the role of the Parliament in the budgeting process. The bureau’s
activities comprise conducting research and producing reports and analyses
that can be requested by the Budget Committee, other committees, members
of Parliament and by the PBO itself on its own initiative. The reports and
analyses produced by the PBO include economic forecasts, baseline
estimates, analysis of the executive’s budget proposals, cost estimates of
proposed policies or legislation, budget options resulting from changes in
spending and taxation, economic impact analysis of regulation, more
extensive economic analysis, tax analysis, policy briefs and medium-term
analysis. The impact of the PBO could be improved by: 1) increasing the
skill profile of experts available to the PBO who can focus effectively on
each area; 2) including long-term sustainability analysis as a distinct
function; and 3) making most of the reports (e.g. those that are requested by
committees and the PBO’s own reports) available to the public.

Aligning budgeting with national planning

Indonesia’s planning framework provides a strong input in strategic
planning and essential background to the budget cycle. The National
Development Planning System (SPPN) has three elements. The National

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244 – 6. OPEN, TRANSPARENT AND INCLUSIVE BUDGETING IN INDONESIA

Long-Term Development Plan (RPJPN, the current one running 2005-25)
and the National Medium-Term Development Plan (RPJMN, currently
running 2015-19) both lay out the basis for the annual developmental
planning. The annual developmental planning process starts with a first draft
derived from the RPJMN.

The National Development Planning Agency (Bappenas), which is
responsible for strategic planning, prepares a draft annual plan at the
beginning of the annual process and makes it available for the Musrenbang
(the Regional Development Planning Consultation, a multi-stakeholder
consultation forum for development planning). Aligning the medium and
annual development plan with the budget policies and the budget draft is a
complex process (depicted in Figure 6.3). Bappenas, the Ministry of
Finance, the different levels of Musrenbang and various stakeholders of the
Regional Level Working Unit (SKPD) forum participate in it. This forum
takes place between the sub-district and local level Musrenbang, with the
participation of all government institutions, including line ministries, civil
society organisations (CSOs) and the delegations elected by sub-district
level of Musrenbang, in order to reach a consensus about the sectoral
priorities and suggestions to be included in the draft annual plan.

Figure 6.3. Links between government developmental planning and budgeting

Source: OECD work based on Fitra data.

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Linking the national developmental planning and budgeting process at
every level of government is important to provide a solid foundation for
budget transparency. Together with involving all relevant stakeholders and
ensuring access to information, this integrated approach can help ensure that
the government achieves the best possible outcomes.

Budget formulation

Government policy affecting public expenditure and taxation originates
in the executive branch of government, i.e. the president, prime minister and
cabinet, whereas proposals for new programmes and changes to existing
departmental programmes usually come from ministers. Supporting the
formulation of the budget, models and methodology of macro and fiscal
projections are prepared by the Fiscal Policy Office (FPO) of the MoF with
inputs from Bappenas, central bank, statistics bureau and the Ministry of
Energy. Long-term macroeconomic and fiscal projections span up to five
years and are updated every year. Long-term fiscal projections include
economic growth rate, short-term and long-term interest rates on
government debt, exchange rate, fiscal gap projections, effects of significant
policy reforms (e.g. pensions, health), civil servants’ pension obligations
and unfunded pension liabilities.

Two fiscal rules limit fiscal policy: a budget balance and a debt rule.
The debt rule prescribes that the gross government debt ratio must not
exceed 60%, consistent with the Maastricht Treaty. The total budget deficit
(both central and subnational government) must not exceed 3% of GDP.
Currently, none of the fiscal rules are binding, and according to the long-
term fiscal projection, the goal is to reduce the budget deficit to 1% of GDP
and to reduce the debt to 24% of GDP, with a tax ratio of 16% of GDP by
2019.

Indonesia has a medium-term expenditure framework (MTEF) in place,
with MTEF ceilings set for overall expenditures, for programmes and at the
organisational level. The MTEF ceilings have a four-year timespan, revised
annually on a rolling basis. However, there are no commitments made to
guarantee that the MTEF is applied in the budget for the following years;
rather, the MTEF is used as a basis for the indicative budget. According to
the new MTEF instructions effective as of 2017, top-down planning replaces
bottom-up budget planning; i.e. instead of assigning money to functions,
money will be assigned to programmes, allowing for more realistic three-
year forward estimates.

The government imposes budget ceilings on the initial overall spending
requests of the line ministries. The budget circular serves as a guideline for
line ministries’ preparations of budget estimates. It contains a set of rules for

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246 – 6. OPEN, TRANSPARENT AND INCLUSIVE BUDGETING IN INDONESIA

the budget process and the main forms to be used in the submission of
estimates, the macroeconomic assumptions to be used in the budgetary
process, information on government priorities and spending ceilings or
targets. Line ministries’ capital and operating budget requests are integrated.
In case of multi-year capital projects, the budget requests are funded
incrementally each year until the project is completed.

The Judiciary, the Supreme Audit Institute (SAI) and the Legislature
budgets are subject to the same procedures as any other governmental
organisation included in the government’s budget proposal, although they
have more flexibility regarding budget implementation, with more discretion
on allocations and standard costs depending on the nature of the work in
each branch. Loan guarantees, pending lawsuits and unfunded pension
liabilities are considered as contingent liabilities, requiring legislative
authorisation. The produced reports are sometimes publicly available or
available upon request.

Supported by good practices across OECD countries, macro and fiscal
projections are shown to be less biased if produced by independent bodies,
e.g. PBOs or Independent Fiscal Institutions. To improve the information
base of the budget, long-term fiscal projections could cover also migration
flows, demographic changes, health care costs and inter-generational
accounting. Similarly, risks and shocks could be taken into account for
entitlement spending such as personal salaries, health insurance, pension
obligations, office operation, interest repayment and arrears. To ensure the
separation and independence of powers, in many countries, the preparation
of the budget of the Judiciary, SAI and Legislature is not subject to the same
procedures and policies as other governmental bodies and their
independence is granted through the provision of a solid budgetary
background.

Budget cycle

Extending transparency in the legislative phase of the budgetary process,
during budget execution and during auditing can support anti-corruption
efforts, as well as promote evidence-based policy making in priority areas
such as social inclusion, education or health care. Greater transparency
improves public accountability and enhances effectiveness and efficiency
throughout the budget cycle.

Figure 6.4 outlines the budget cycle, encompassing one fiscal year, from
January until December. The process includes planning, drafting, discussing
and adopting a budget at the national level. The fiscal year starts in January.
During the second week of January, the MoF starts preparing
macroeconomic estimates and projections of tax, non-tax, grant and

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2476. OPEN, TRANSPARENT AND INCLUSIVE BUDGETING IN INDONESIA –

expenditures categories. The resource envelope/fiscal capacity is discussed
with the line ministries during the second week of February. As mentioned
above, Musrenbang takes place parallel to the budgeting process, from
January until April of the planning year, feeding into the draft annual plan
and then into the budget proposal. In April, indicative budget ceilings are
communicated to line ministries and the line ministries submit draft annual
work plans and budget proposals to the MoF. The government’s work plan
is sent to Parliament for preliminary discussion in May.

In June, the Parliament’s Budget Committee and government officials
form working groups, and this is followed by discussions involving
Parliament’s 11 sectorial commissions. These commissions hold meetings
with the representatives of ministries corresponding to their sector, and at
the end of the preliminary discussions, the Budget Committee takes over to
discuss further the budgetary outline. July marks the issuance of the decree
of the Minister of Finance on the budget ceiling, which is followed by the
submission of the proposed budget and the supporting documentation to the
Parliament in mid-August, when the President delivers his budgetary speech
before the Parliament. From August until October, plenary sessions are held
in the Parliament, and then the budget law is enacted in October/November.
The Citizens’ Budget is published in November. The checklists of budget
implementation (DIPA) for each ministry/public agency are prepared and
sent in December, leading up to the implementation of the budget, which
starts the following year as of 1 January.

During the budget cycle, the MoF is responsible for developing the
Executive Budget Proposal, authorising line ministries’ outlays, producing
supplemental budgets and producing mid-year reports.

The consolidated Mid-Year report is issued in July, and End-Year
reports of public-sector entities are issued in February of the following year.
In April of the following year, the consolidated, central government End-
Year report is issued. The SAI publishes its End-Year audit report in June of
the following year. Parliamentary discussions of End-Year reports begin in
July of the following year.

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248 – 6. OPEN, TRANSPARENT AND INCLUSIVE BUDGETING IN INDONESIA

Figure 6.4. Annual budget cycle of Indonesia1
• Preparation of fiscal capacity

Jan-Mar
• Indicative ceiling set by Ministry of

Apr Finance and Bappenas

• Submission of Macroeconomic Framework
and Fiscal Policy Principles to the House of

May Representatives

• Discussion of preliminary draft
May-Jul budget

• Decree of the Minister of Finance on
Jul budget ceiling

• Speech of President of Finance and
submission of proposed budget

Aug memorandum

• Discussions with Parliament
Aug-Oct

• Plenary session establishment - draft
Oct state budget

• State budget enacted into law
Nov

• Presidential regulation - details of the
Nov budget

• Submission of list of budget
Dec implementation

• Implementation of the budget
• Ministry of Home Affairs regulation
Next Year appears

1. Not including items and events due in year n+1, e.g. the audit of the budget.
Source: OECD work based on Budget Brief 2016,
www.kemenkeu.go.id/Publikasi/informasi-apbn-2016.

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