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Data Collection Survey on Trends of Other Donors in Indonesia and Malaysia

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Data Collection Survey on Trends of Other Donors in Indonesia and Malaysia No. Data Collection Survey on Trends of Other Donors in Indonesia and Malaysia Final Report June 2009 JAPAN INTERNATIONAL COOPERATION AGENCY NIPPON KOEI CO., LTD. KRI INTERNATIONAL CORP. No. Data Collection Survey on Trends of Other Donors in Indonesia and Malaysia Final Report June 2009 JAPAN INTERNATIONAL COOPERATION AGENCY NIPPON KOEI CO., LTD. KRI INTERNATIONAL CORP. CURRENCY EQUIVALENTS (AS OF APRIL 2009) 1 US$ = 11,554 Indonesian Rupiah = 97.29 Japanese Yen 1 US$ = 3.645 Malaysian Ringgit = 97.29 Japanese Yen Location Map of the Study Area Basic Economic Indicators - Indonesia GDP Shares by Sectors (%) GDP Growth Rate and Per Capita GDP Capital Investment by Sectors (Mil.$) (1998-2007) 55,269 1,264 859 4,280 6,347 10 1800 100% 2007 1600 16,950 3,816 5 2,242 1400 80% 40.3 38.5 39.8 41.4 43.2 2006 1200 0 1000 60% 12,964 1996 1998 2000 2003 2005 2007 1,924 4,246 581 800 2005 -5 600 40% 45.9 42.8 45.0 44.1 43.0 GDP Growth(%) Rate GDP -10 400 ($) GDP Capita Per 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 (Million $） 200 20% -15 0 Agriculture Industry Infrastructure Service 16.9 15.6 15.2 14.5 13.8 GDP Growth Rate Per Capita GDP 0% 1998 2000 2003 2005 2007 Primary Sector Secondary Sector Tertiary Sector Foreign Direct Investment by Countries Recent Performances of Japan’s ODA Recent Trend of Major Donors’ and Regions (Million $) (Loan, Grant, Technical Cooperation) Assistance (2005-2007) 14,000.00 730 2002 1,456 8,894 2001 12,000.00 502 10,000.00 2003 1,239 10,463 2002 8,000.00 1,874 2004 1,207 11,483 2003 Mil. USD 6,000.00 633 4,000.00 2005 1,088 9,301 2004 2,000.00 779 537 2006 12,523 2005 0.00 e n 7 ia s 0 500 1000 1500 2000 r sia a ina in ica Asia o p rope ta USA r lle 0 2000 4000 6000 8000 10000 12000 14000 16000 aysia p A a Ch EU2 f e l ga J Korea Eu Bri merica cean A ASEAN n A O ortiums Million $ Ma therlands eych ns Si Other e S o Million Yen N C Technical Cooperation Grant Loan 2005 2006 2007 Japan USA Australia Netherlands Germany Spain Canada Sweden France Basic Economic Indicators - Malaysia GDP Shares by Sectors (%) GDP Growth Rate and Per Capita GDP Capital Investment by Sectors (Mil.$) (1998-2007) 12 7000 100% 10 9,359 6000 2007 8 80% 44.9 46.8 46.0 47.6 6 5000 49.2 5,664 4 2006 2 4000 60% 0 5,007 3000 2005 -2 1996 1998 2000 2003 2005 2007 40% -4 2000 GDP Growth Rate(%) GDP Per Capita GDP ($) GDP Capita Per 46.8 45.0 46.1 44.7 0 2,000 4,000 6,000 8,000 10,000 -6 43.4 1000 (Million $） -8 20% -10 0 Industry 8.3 8.1 8.0 7.7 7.4 GDP Growth Rate Per Capita GDP 0% 1998 2000 2003 2005 2007 Primary Sector Secondary Sector Tertiary Sector Foreign Direct Investment by Countries Recent Performances of Japan’s ODA Recent Trend of Major Donors’ and Regions (Mil. $) (Loan, Grant, Technical Cooperation) Assistance (2005-2007) 3,500 2000 2001 666.8 9.7 3,000 1.0 2,500 2001 2002 588.3 820.4 2,000 2003 483.1 3.7 2002 Mil.USD 1,500 1,000 2004 425.1 0.9 2003 500 3.3 2005 172.3 764.4 0 2004 USA 0 200 400 600 800 1000 India China Japan Qatar Brazil Sudan France Russia Britain Taiwan Belgium Vietnam Thailand Germany Denmark Caymans Australia Indonesia Mauritius Million Yen Singapore 0 50 100 150 200 250 300 HongKong Switzerland Netherlands Million $ 2005 2006 2007 Technical Cooperation Grant Loan Japan Denmark Germany Australia USA Spain Canada Summary of the Basic Economic Indicators EXECUTIVE SUMMARY The framework of international technical cooperation activities towards “Aid Effectiveness”, particularly after the Paris Declaration, has dramatically changed. Furthermore, through the Accra High Level Forum (HLF), the significance of related principles was confirmed leading to the endorsement of Accra Agenda for Action (AAA) in 2008. In this context, the newly reorganized JICA, as one of the major donor institution recognized globally, considers supporting the modality and mandate for the new challenge and agenda. In the case of Indonesia, which is part of this study, the Jakarta Commitment was adopted by major donors and international agencies providing technical cooperation activities and financial support to the Government of Indonesia (GOI) in early 2009. This was considered to be the first initiative among all the recipient countries. Given the current recognition of “quasi/semi middle-income country status”, GOI has been aggressively undertaking a move to the action plan for “Aid Effectiveness.” The major donors for Indonesia have been actively participating in GOI’s action and activities to improve its “Aid Effectiveness” as part of exercise of the Paris Declaration. This was conducted through various mechanisms such as multi donor cooperation, multi donor fund, and trust fund. The donor cooperation activities have been strengthened further in terms of ownership, management and monitoring of funds, alignment and cooperation. GOI intends to share its experience and knowledge to the other potential countries and will serve as the model. Consequently, they are already executing various related activities. The current economic and political situation backs favor to various international investment activities and private sector initiatives to Indonesia. Under this favorable situation, GOI is stepping ahead to perform partnership activities that differ from the traditional ways of receiving aids and assistance to gain ownership. This initiative has been recognized and supported by major donors. Meanwhile, the situation in Malaysia is rather different from Indonesia concerning ODA activities such as donor cooperation activities and its mechanism. Nevertheless, Malaysia has already initiated moves aiming to be an advanced country by the year 2020. There are only a few remaining donors who are willing to support development activities in Malaysia, such as Denmark, UN, IDB, and Japan. Although there are other donor coordination forums that exist, the Government of Malaysia (GOM) does not seem to extend a major participation. Part one of this study focuses on Indonesia with its first chapter presenting an introduction to cover the outline of socio-economic situation, and to present the timeline activities on “Aid Effectiveness.” Chapter two meanwhile, is related to the GOI’s organization and mechanism for receiving ODA and its functions. Some alternative resolutions towards the Jakarta Commitment (JKT-C) are also presented in said chapter. Chapter three explains what other donors consider and the responses to the JKT-C. It also includes their expectations from JICA, as revealed from the results of series of interviews undertaken. Chapter four concludes part one with corresponding findings and suggestions. Part two explains the Malaysian situation on ODA assistance programs with its donors, and GOM’s strategy. Its first chapter presents introductory discussions while chapter two summarizes the overview on Malaysian socio-economic situation. The organizational mechanism and functions of the GOM concerning ODA are discussed in chapter three. This chapter also presents studies and confirms some relevant cases, including the waste management sector’s situation with multi donors at the national initiative, the Pulau Pinang being an example of local initiative for donor cooperation and ownership, and the TCDC or “South-south cooperation” as documented globally. The findings and suggestions are finally discussed in chapter four. S - 1 Data Collection Survey on Trends of Other Donors in Indonesia and Malaysia Final Report Table of Contents LOCATION MAP OF THE STUDY AREA SUMMARY OF BASIC ECONOMIC INDICATORS EXECUTIVE SUMMARY LIST OF ABBREVIATION PART-I: INDONESIA TABLE OF CONTENTS CHAPTER 1 OUTLINE OF THE STUDY IN INDONESIA ..................................................... 1 1.1 Background of the Study................................................................................................... 1 1.2 Objectives of the Study .....................................................................................................3 CHAPTER 2 JAKARTA COMMITMENT AND DONOR COORDINATION SYSTEM................................................................................................................... 5 2.1 Background and the Consultative Group on Indonesia (CGI) .......................................... 5 2.2 Framework of Post CGI .................................................................................................... 5 2.3 Donor Coordination Mechanism After Jakarta Commitment ........................................... 7 2.4 Emerging Scheme for Grant Aid Implementation............................................................. 8 2.4.1 Objectives and Mechanism of the ICCTF ......................................................... 9 2.4.2 Institutional Setting for the ICCTF.................................................................. 10 2.5 Medium-Term Development Strategy (RPJM) 2010-2014............................................. 10 CHAPTER 3 DONOR TRENDS IN INDONESIA.................................................................... 13 3.1 Outline............................................................................................................................. 13 3.2 Donor Resposes on Jakarta Commitment ....................................................................... 14 3.2.1 Trends of International Donor Community............................................................ 14 3.2.2 Donor Responses.................................................................................................... 15 3.3 New Donors...................................................................................................................
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