TECHNICAL ASSISTANCE COMPLETION REPORT Division: SERD/IRM

TA No. and Name Amount Approved: $750,000 3813-INO: Support to the Partnership for Governance Reform in Revised Amount: $750,000 Executing Agency Source of Funding TA Amount Undisbursed TA Amount Utilized National Development Planning ACCSF $294,615.45 $455,384.55 Agency (Bappenas) Date TA Completion Date Approval Signing Fielding of Consultants Original Actual 18 Dec 2001 14 Mar 2002 22 April 2002 31 Jan 2003 31 May 2004 TA Account Closing Date Original Actual 31 Jan 2003 23 June 2005 Description The Partnership for Governance Reform in Indonesia (PGRI) was formed with the Government of Indonesia (GOI), ADB, the United Nations Development Programme (UNDP), and the World Bank as founding members in March 2000. PGRI is an Indonesian institution, acting on delegation from GOI and managing a trust fund of originally $30 million provided on a grant basis from bilateral assistance sources. The fund supports governance reform projects. PGRI also manages a facility to cover its own operating costs and external activities aiming to engage stakeholders or to prepare for projects funded by the trust fund. The vision of PGRI is to extend and deepen the nature of cooperation between the international funding community and Indonesia in support of the governance reform agenda. PGRI has moved from a UNDP-sponsored project coordinating efforts of the international community to support fair elections, to an Indonesian organization that is recognized by the Government as having authority to implement projects financed by official development assistance. PGRI’s independence was formally confirmed in January 2005 when it became a legal entity under Indonesian civil law. GOI and PGRI had requested ADB to provide advisory TA to help expand PGRI’s work to the regional level. ADB’s assistance was necessary because: (i) PGRI’s trust fund may not be used for activities and projects where PGRI will be the beneficiary, and (ii) PGRI’s facility was not sufficiently large to cover the entire TA costs and existing commitments. The TA was included in the 2001 Indonesia country program and was consistent with the then Country Strategy and Program, which called for improved governance at the local level. This was particularly important in the context of the program of decentralization, which transfers revenues and responsibilities for the provision of services such as those for education, health, and regional roads to local governments. Bappenas was the Executing Agency for the TA and PGRI was the Implementing Agency. The four regional governments supported the TA operations by providing office space and other support for the consultant teams. At the time of the TA implementation, PGRI was the only credible institution for governance reform in Indonesia and many donors were giving it their support. While other donors supported PGRI with funds, either to the Trust Fund or to the Facility, the TA was the only way for ADB, as one of the founders, to support PGRI, a support which became an ADB priority in the 2002 Country Strategy and Program. Objectives and Scope The objective of the TA was to support development of good local governance and of greater participation in policy development and implementation at the local level. It aimed particularly at having PGRI established as a credible entity and operational at the local level. The TA assisted PGRI to create regional and cross-regional liaison structures by locating consultants in altogether four regions (Jayapura, , and ) for defined purposes and on fixed term to help improve public and corporate governance on regional and local levels. Specifically, the TA: (i) Provided support to develop projects eligible for PGRI funding developed by institutions and organizations on regional and local levels in accordance with PGRI’s strategies and priorities; (ii) Established strategic networks through workshops and consultations mechanisms on regional and local levels for good governance involving civil society, local press, regional and local government, and universities to assist the implementation of good governance; (iii) Helped develop effective, realistic plans for restructuring at least one village administration in each of the regions, developed in a participatory manner and accepted by local communities; (iv) Provided for information dissemination and workshops related to good corporate governance; and (v) Proposed a sustainable effort including funding for a continued and expanded PGRI presence on the regional level based on the experiences and outputs of this TA. The TA proceeded on the basis of memoranda of understanding (MOUs) signed by PGRI, BAPPENAS, ADB, and the regional governments specifying agreement on the scope and activities of the TA in that particular region. 2

Evaluation of Inputs The consultant input was given in two stages, stage 1 from July 2002 up to June 2003 and stage 2 from September 2003 to May 2005. For stage 1, one international consultant was hired as team leader together with two teams of 3 domestic consultants, one team in Medan and one in Yogjakarta. The team leader was based in PGRI’s office in and tasked to manage and coordinate the two consultant teams on behalf of the Partnership. However, the performance of both the team leader and the two teams was not up to expectations and their contracts were not extended, when they expired in June 2003. Instead, 3 other domestic consultants were hired, managed and coordinated directly by the PGRI executive office for stage 2. The consultants were based in Banda Aceh/Medan, Jayapura and Yogjakarta respectively. The stage 2 team was well integrated into PGRI operations and the fact that PGRI took over funding and employment responsibility for all three consultants, when the TA was completed, was in line with the TA objectives. The reason as to why only $455,384 were utilized out of approved $750,000 is mainly explained by the fact that after stage 1, domestic consultants were used only resulting in TA savings. In retrospect and considering that TA was aiming at the regional level, the use of an international consultant could be questioned altogether. Evaluation of Outputs and Outcomes For both stage 1 and 2, PGRI provided agreed counterpart funds to finance the consultants’ outputs, which were mainly workshops and stakeholder consultations related to decentralization and other governance reforms on the regional level. Consultants’ reports to ADB were progress reports and Final Reports. While there was one consolidated Final Report for stage 1, the final reports for stage 2 were three one report from each consultant/region. The Final Report from stage 1 was of sufficient quality and so were two of the Final Reports from stage 2, while two were less satisfactory. However, the main outputs of the TA were not the consultants reports but all the activities conducted in the regions, which were funded by the Partnership and which mainly consisted of workshops for stakeholder consultations on regional governance and democracy issues as well as support to NGOs and others applying for grants from the Trust Fund. Clearly, this TA was different from many other ADB TA’s in the sense that: (i) it did not define a specific area for reform but rather a broad mandate for the consultants to support implementation of PGRI strategies and priorities in a few selected regions: (ii) ADB only financed the consultants’ remuneration and out of pocket expenses, all operational expenses were borne by PGRI; and (iii) the outputs were not clearly defined reports (except for Inception, Final and progress reports) but workshops and stakeholder consultations on democratization and governance issues, which was in line with the way PGRI mainly operated at the time. The TA clearly helped both PGRI and local governments to deliberate and moving forward contentious issues through workshops and stakeholder consultations. However, the sustainability of such outcomes can be questioned. The fact that the TA led to still ongoing PGRI programs in a few key regions, indicates a sustainable outcome at least in these regions. Overall Assessment and Rating The TA has been rated partly successful. Detailed ratings are relevant, less effective, less efficient while sustainability has been rated less likely and institutional development and other impacts has been rated less significant. Major Lessons Learned • The fact that the TA only provided remuneration and out of pocket expenses for the consultants meant that ADB had little influence over the substantive directions of the consultants’ work. Although the intention was to support PGRI and its agenda, this kind of design does not really provide for sustainability. • Domestic consultants working with local governments need to know the region well and have adequate networks. The relatively poor performance of several consultants in stage 1 was explained by the fact that they had been selected without such considerations, while the consultants under stage 2 had. • Deploying individual consultants at different locations requires a strong coordination and management capacity. While the team leader in stage 1 was not able to fully provide this management and coordination, PGRI Executive Office managed to do so for the consultants in stage 2. • Regular and frequent progress meetings are necessary but difficult when consultants are dispersed over the country. During stage 1, there were monthly progress meetings involving ADB, PGRI and the team leader while in stage 2 progress meetings were held when the consultants came to Jakarta to report to PGRI, which they did regularly on PGRI’s expense. Recommendations and Follow-Up Actions PGRI has a good track record in several important areas of governance reform including anticorruption, judicial reform and civil service reform, and donors continue to support PGRI for activities in such fields. ADB should also be prepared to continue to support PGRI by making it Implementing Agency for grant assistance in areas which are part of ADB’s governance focus in Indonesia and where PGRI has a strong track record and comparative advantages in relation to other institutions. However, ADB should not just add consultant resources through a TA but support a set of selected activities which should be monitored for impact and outcome. By providing substantive inputs instead of resources only the reform process will be strengthened and any future TA more sustainable.

Prepared by Staffan Synnerstrom Designation Governance Advisor 3