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Blue__20081122064206__0.Pdf LIST OF PROJECT AND TECHNICAL ASSISTANCE PROPOSALS 2005 Ministry of National Development Planning/ National Development Planning Agency PREFACE In order to attain the targets of the 2004-2009 Medium-Term Development Plan (RPJM 2004-2009), it is still necessary to have external sources of funding (PHLN), as stated in the RPJM. The PHLN will be used for covering part of the APBN (national Budget) deficit financing, for supporting the balance of payments, and for enhancing the management and technological capability in implementing national development. The policy for obtaining the external funds is still consistent with the RPJM target, namely for reducing the ratio of government stock of debt to GDP from around 53.9% in 2004 to around 31.8% in 2009. For its implementation it is necessary to prepare a process for planning new external funds. In the context of coordinating the planning of activities that will be funded by PHLN (external loans and/or grants), Bappenas has issued the 2005 edition of the List of Projects and Technical Assistance, that is normally referred to as the Bluebook. The Bluebook contains the list of planned priority activities of Government Ministries/Agencies, Regional Governments and State-Owned Enterprises, that are planned to be funded by the PHLN. The 2005 edition of the List of Projects and Technical Assistance Proposals, forms part of the activities that are needed for attaining the 2004-2009 Medium-Term Development Plan (RPJM 2004-2009). Generally, the projects that are included in the 2005 Bluebook encompass planned Project Aid totaling 84 projects in the total amount of USD 7.3 billion, with a planned external loan need of USD 6.2 billion, and technical Assistance totaling 47 projects with a planned external funding need of USD 150.2 million. The funding of Project Aid is directed to the use of concessional loans, whereas funding of Technical Assistance will fully use grants. In line with the priorities of the RPJM, projects that are proposed in the 2005 Bluebook are directed at the funding of infrastructure, namely encompassing Public Works, Communications and Electricity, totaling 40 projects, totaling an amount of USD 4.5 billion and a planned external loan need of USD 3.9 billion. In the context of enhancing the capability of regions in managing development activities, also two (2) activities are proposed that will be managed by the regions themselves totaling an amount of USD 59.0 million. In addition, for enhancing public services by State-Owned Enterprises, nine (9) projects are planned at a total amount of USD 1.4 billion., that is used for the funding of electricity facilities and infrastructure construction. In the context of enhancing the effectiveness of utilizing the PHLN and of reforming management of the PHLN, the Government has issued Government i Regulation Number 2 of 2006 regarding Procedure for Planning and Submitting Proposals and Evaluating Activities that are Funded by the PHLN. As a follow-up to this Government Regulation, currently various reforms are being undertaken to the process of planning, submitting proposals and evaluation of activities that will be financed by the PHLN. The issuance of the 2005 Bluebook is a transition before the effectuation of the reforms to the procedure of planning, submitting proposals and evaluation of activities that will be financed by the PHLN. Immediately after the issuance of the new procedure, all activities that have already been included in the Bluebooks of previous years (including activities included in the 2005 Bluebook) will be reassessed and reevaluated, whether they are still eligible for being funded by the PHLN. It is hoped that the activities planned in the 2005 Bluebook can be implemented effectively and will contribute to the advancement of the whole nation. H. Paskah Suzetta ii Reforming the Management of Government External Debt: Issuance of the List of Planned Priorities of External Loans and/or Grants (DRPPHLN) In order to attain the targets of the 2004-2009 Medium-Term Development Plan (RPJM 2004-2009), it is still necessary to obtain sources of financing from abroad as stated in the RPJM. External funding will be used for covering part of the APBN (National Government Budget) deficit financing, for supporting the balance of payments, and for enhancing management and technological capability in implementing national development. The main principle to be upheld by the Government in the management of external loans (PLN) is to reduce dependence on external funds by reducing the stock of external debt, in line with the RPJM target, namely to lower the ratio of Government debt to GDP from around 53.9% in 2004 to around 31.8% in 2009. Such stock reduction is carried out by among others limiting the total amount of new external loans and improving the management of planning and management external loans/grants, in the context of increasing the effectiveness and efficiency in the utilization of external funds. The main objectives of the endeavors to reform the management of planning and in the management of the PHLN (External Loans and Grants) are the following: 1. The enhanced transparency in the process of planning and in the management of projects that are funded by the PHLN. 2. The enhanced coordination among government agencies in the planning and management of the PHLN, so that the synergy is attained among the projects that are funded by the PHLN and projects that are funded by domestic funds. 3. The enhanced integration in the process of planning and implementation of projects that are funded by the PHLN in the APBN (National Government Budget). 4. The enhanced capacity and role of the ministries/agencies in the planning and management of projects that are funded by the PHLN. 5. The enhanced participation of the general public since the planning process to the implementation of the projects that are funded by the PHLN. 6. The enhanced coordination in the formulation of plans for the utilization of the PHLN and various PHLN donor institutions. In order to increase the effectiveness and efficiency in the utilization of the PHLN, various reforms have been made to the regulations as well as to the planning of projects that are funded by the PHLN. The regulatory reform relates among others to the issuance of Government Regulation (PP) Number 2 of 2006 regarding the Procurement of External Loans and Receipt of External Grants and the Forwarding iii of External Loans and/or Grants, and its various implementing regulations. In this Government Regulation (PP), the reforms are in the following forms: 1. A borrowing strategy is formulated that identifies the planned annual needs for external loans for a five (5) years period, in conformity with the RPJM (Medium-Term Development Plan) period. In addition, an indication will be given on the priorities of fields that will be funded by external loans. This borrowing strategy is the basic policy framework for the implementation of government external loans. With such borrowing strategy, the government will become able to control the magnitude of loans that will be made, and to formulate the direction of their utilization. The priorities of fields that will be funded by external loans shall become the guidelines for all government agencies on the direction of external loans utilization. 2. The main points in the reform of planning and management of activities that will be funded by the PHLN cover the following: a. Implementation of a one gate policy in the planning of activities. An activity can be proposed only by the Minister, Head of Agency, Governor, Walikota (Head of Kota), Bupati (Head of Kabupaten, and by the President Director of the BUMN (State-Owned Enterprise). This is meant for enhancing prudence and increasing accountability of each proposed activity of agencies in the utilization of the PHLN. b. The coordination of planning is carried out by the Ministry for National Development Planning/Agency for National Development Planning, for optimizing government resources. c. In the context of improving coordination, a procedure will be compiled for planning activities that are funded by the PHLN, that will link the external borrowing strategy and the priorities fields contained in the RPJM. d. To monitor planning and enhance monitoring and evaluation of the implementation of projects that are funded by the PHLN. This is meant for enhancing the utilization of external loans and for averting delays in the implementation of projects. 3. Reforms in the Planning of Activities that are funded by the PHLN. In the context of increasing the effectiveness and efficiency of PHLN utilization and in the efforts for enhancing the capacity of ministries/agencies in the process of planning and in the management of projects that are funded by the PHLN, the following steps are taken : a. Compiling the List of the Medium-Term PHLN Activities (DRPHLN JM). The DRPHLN JM is a planning document that contains the list of development projects that are eligible for being funded by the PHLN for a five (5) year period, that is based on the priorities and targets of the RPJM. iv This DRPHLN JM compilation is conducted once in each RPJM period and is subject to annual revisions. With such an approach, the funding of activities by the PHLN will only be made if such activities are already stated in the DRPHLN JM. We are now in a transition. Immediately upon the effectuation of the reformed procedure of planning, proposing and evaluating activities that will be funded by the PHLN (External Loans/Grant), all activities that have been contained in the Bluebooks of previous years (including activities that are contained in the 2005 Bluebook), will be assessed and reevaluated to determine whether they are eligible for being funded by the PHLN for being stated in the DRPHLN JM.
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