A report recently issued by the World Bank (WB) said that the treatment of political economic issues in Indonesia is "uneven, with no evidence of systematic improvement" since at least four years ago, hampering development in Southeast Asia's largest economy, local media reported on Monday.
Indonesia, as well as other countries assessed by the Bank's independent evaluation group (IEG), which looked at a country's governance and anticorruption strategy and implementation plan, rarely went beyond "identifying political risks and proposing to adjust reforms to governance realities", according to the group' s recent report. , made available for The Jakarta Post on Friday.
Indonesia is poised for at least 6.5 percent economic growth this year, after growing by 6.1 percent last year amid global economic uncertainties; but critics say better governance and political economic decisiveness, for instance, by raising fuel prices to ease the strain on the state budget, albeit an unpopular policy, could boost the economy to expand further.
"There is a need for innovation on multiple fronts: new financial instruments; better metrics for measuring governance performance; a more harmonized and consistent approach to risk management; and more strategic allocations of internal resources," said Nivan Girishankar, the main author of the study and a lead evaluation officer with the IEG.
"Taken together, these can help improve the Bank's approach to strengthening country institutions and its effectiveness in supporting homegrown efforts," he was quoted by the Jakarta Post as saying.
In East Asia and the Pacific countries, the "disenfranchisement of vulnerable groups and limited accountability of government threaten the early gains of public management reforms and anticorruption efforts", the report reads.
The Indonesian government has launched several bureaucracy reform programs, with the latest being to freeze recruitment of new civil servants for over a year to right-size, and increase the quality and productivity of existing public officials.
Indonesia's competitiveness in the World Economic Forum's (WEF) 2011-2012 global competitiveness index slid two places to 46th, as the indices for public institutions-related assessment dip further.
"Despite efforts to tackle the issue, corruption and bribery remain pervasive and are singled out by business executives as the most problematic factor for doing business in the country," the WEF report reads.
Coordinating Minister for the Economy Hatta Rajasa acknowledged poor governance in the country. "Certainties in public services is key so that [processes] do not take time and there's no corruption and extortion," Hatta said recently.
The World Bank's latest evaluation report focuses on the relevance and effectiveness of the Bank's support for governance and anticorruption, as it triples the number of countries in which it plans to support institutional strengthening for good governance; in particular, in public financial management, service delivery and the investment climate.
The second phase of the evaluation will need to address the key
findings of this evaluation "to more effectively help countries overcome deep-seated governance challenges, such as civil service dysfunction, the capture of natural resource rents, or political- institutional barriers to market entry and improved service delivery", the IEG's senior manager, Ali Khadr, said.