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Getting
bureaucratic reform right
Alex Yap ; Managing
Director of ASPEC Consultancy, Purmerend, The Netherlands
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JAKARTA
POST, 04 Oktober 2012
When it comes to
reforming its bureaucracy, Indonesia would do well to take a close look at what
has been happening recently in the European Union. The situation in the EU is
almost a paraphrase of Indonesia’s bureaucratic reform challenge.
In 2010, at the height of the sovereign debt crisis in Europe, German chancellor Angela Merkel and former French president Nicolas Sarkozy were convinced that the only way to save the euro was to force a breakthrough on the fiscal reform question, and get some kind of consensus between the EU member countries.
Almost by default, a single currency must be underpinned by a single consistent fiscal policy. There can be no monetary union without a political union and that implies fiscal policy integration. At the current time, what with the euro about to collapse and the financial markets whipping themselves into a frenzy, something had to be done to bring them into line.
The EU countries needed to agree to act as one to implement fiscal reform to improve competitiveness and create financial market stability for the euro.
However, with 27 countries, notoriously difficult to administer as a unit because of their diversity, this is easier said than done. For them, relinquishing control of fiscal policy was tantamount to surrendering sovereignty.
In a sense, the current sovereign debt crisis has been a blessing in disguise. Under extreme duress from the debt crisis, Merkel and Sarkozy managed to get the EU countries to agree firm fiscal targets with penalties for failure. The endorsement in 2011 of the Euro-Plus-Pact (Euro+ Pact) was the result.
However, simply agreeing firm targets and penalties is no guarantee that fiscal reform will actually be achieved.
To ensure the signatories stuck to the letter of the law, the “open method of coordination” (OMC) was called in to monitor compliance. This process of intergovernmental consultation has been successfully applied in the EU since 2004 to policy areas such as employment strategy, social inclusion and health and long term care.
So why not fiscal policy?
The success of the OMC lies in the fact that it allows clear targets to be formulated for each of the member countries, results to be measured and monitored according to a strict schedule and then discussed by the parties involved with adjustments made to the process where necessary.
Discussion is completely open at all times and the results made public. Targets and benchmarks are defined in advance and the resulting performance evaluated yearly or every six months by the participant group. A scoreboard is thus created that can be used for multilateral surveillance. Clearly it was the ideal solution for keeping track of compliance with fiscal reforms agreed.
For the EU read Indonesia and for the 27 EU member countries read the 33 provinces of Indonesia.
Like it or not, Indonesia will eventually be in the same position when it comes to coordinating bureaucratic reform nationwide. The mechanisms of reform may be important but they really are of secondary importance when it comes to coordinating them in a consensual climate.
Last August President Susilo Bambang Yudhoyono, again, declared bureaucratic reform and good governance to be a top priority of government policy. The objectives are clear enough; an administration free of corruption, collusion and nepotism that provides an excellent, efficient service to the public and can be held to account.
The target is also clear; the reform of central government in the form of ministries and institutions (kementrian/lembaga) and provincial governments (pemda).
What is less clear however, is how the reform process is to be carried out to achieve the objectives. How can we, for example, reach a consensus about the method to be used to accomplish bureaucratic reform in local governments that have different cultural, historical and traditional backgrounds? A system of Open Coordination could be the solution.
Which checks and balances are the most suitable for the problems raised by bureaucratic reform across the 33 provincial administrations of Indonesia? It is not an easy question to answer but it is clear that each can gain much by consultation and sharing their experience in areas of common interest.
Doing so could encourage them to improve the design and implementation of their own policies, to develop joint initiatives and to identify areas where they can work together for the common good.
Whatever form it takes, the process needs to be transparent at all times to gain broad public support. As the World Bank recently noted, in the case of Indonesia, a mechanism is lacking which “measures the impact and outcomes of bureaucratic reform. And without transparency, citizens are unable to follow or comment on reform outcomes”.
Greater transparency has benefits for all concerned and creates feedback. The public, seeing the system is there to help them rather than obstruct them, will respond more positively, viewing reform changes as improvements in the overall process of governance that impacts on their lives.
Government officials working in the bureaucracy, seeing their efforts openly acknowledged, will have greater self-esteem and take pride in delivering a better service.
The OMC, highly effective in the EU case, is nothing new to Indonesia anyway. It is almost identical to the system of musyawarah (deliberation) and mufakat (consensus) that has already been in place for centuries.
The mechanism has been used in village assemblies to develop general agreement and consensus with the parties adjusting their viewpoints or integrating contrasting viewpoints into a new conceptual framework that everyone is comfortable with.
It also has the virtue of equally respecting the views of everyone involved in the process so the majority cannot impose their views on the minority.
That there was an existing need in the EU for a system such as OMC can be distilled from its motto: Unité dans la diversité (united in diversity) adopted in 2000.
The same need for a process of deliberation and consensus can also be inferred from Indonesia’s motto of a much earlier date: Bhinneka Tunggal Ika (unity in diversity) introduced in 1945. ●
In 2010, at the height of the sovereign debt crisis in Europe, German chancellor Angela Merkel and former French president Nicolas Sarkozy were convinced that the only way to save the euro was to force a breakthrough on the fiscal reform question, and get some kind of consensus between the EU member countries.
Almost by default, a single currency must be underpinned by a single consistent fiscal policy. There can be no monetary union without a political union and that implies fiscal policy integration. At the current time, what with the euro about to collapse and the financial markets whipping themselves into a frenzy, something had to be done to bring them into line.
The EU countries needed to agree to act as one to implement fiscal reform to improve competitiveness and create financial market stability for the euro.
However, with 27 countries, notoriously difficult to administer as a unit because of their diversity, this is easier said than done. For them, relinquishing control of fiscal policy was tantamount to surrendering sovereignty.
In a sense, the current sovereign debt crisis has been a blessing in disguise. Under extreme duress from the debt crisis, Merkel and Sarkozy managed to get the EU countries to agree firm fiscal targets with penalties for failure. The endorsement in 2011 of the Euro-Plus-Pact (Euro+ Pact) was the result.
However, simply agreeing firm targets and penalties is no guarantee that fiscal reform will actually be achieved.
To ensure the signatories stuck to the letter of the law, the “open method of coordination” (OMC) was called in to monitor compliance. This process of intergovernmental consultation has been successfully applied in the EU since 2004 to policy areas such as employment strategy, social inclusion and health and long term care.
So why not fiscal policy?
The success of the OMC lies in the fact that it allows clear targets to be formulated for each of the member countries, results to be measured and monitored according to a strict schedule and then discussed by the parties involved with adjustments made to the process where necessary.
Discussion is completely open at all times and the results made public. Targets and benchmarks are defined in advance and the resulting performance evaluated yearly or every six months by the participant group. A scoreboard is thus created that can be used for multilateral surveillance. Clearly it was the ideal solution for keeping track of compliance with fiscal reforms agreed.
For the EU read Indonesia and for the 27 EU member countries read the 33 provinces of Indonesia.
Like it or not, Indonesia will eventually be in the same position when it comes to coordinating bureaucratic reform nationwide. The mechanisms of reform may be important but they really are of secondary importance when it comes to coordinating them in a consensual climate.
Last August President Susilo Bambang Yudhoyono, again, declared bureaucratic reform and good governance to be a top priority of government policy. The objectives are clear enough; an administration free of corruption, collusion and nepotism that provides an excellent, efficient service to the public and can be held to account.
The target is also clear; the reform of central government in the form of ministries and institutions (kementrian/lembaga) and provincial governments (pemda).
What is less clear however, is how the reform process is to be carried out to achieve the objectives. How can we, for example, reach a consensus about the method to be used to accomplish bureaucratic reform in local governments that have different cultural, historical and traditional backgrounds? A system of Open Coordination could be the solution.
Which checks and balances are the most suitable for the problems raised by bureaucratic reform across the 33 provincial administrations of Indonesia? It is not an easy question to answer but it is clear that each can gain much by consultation and sharing their experience in areas of common interest.
Doing so could encourage them to improve the design and implementation of their own policies, to develop joint initiatives and to identify areas where they can work together for the common good.
Whatever form it takes, the process needs to be transparent at all times to gain broad public support. As the World Bank recently noted, in the case of Indonesia, a mechanism is lacking which “measures the impact and outcomes of bureaucratic reform. And without transparency, citizens are unable to follow or comment on reform outcomes”.
Greater transparency has benefits for all concerned and creates feedback. The public, seeing the system is there to help them rather than obstruct them, will respond more positively, viewing reform changes as improvements in the overall process of governance that impacts on their lives.
Government officials working in the bureaucracy, seeing their efforts openly acknowledged, will have greater self-esteem and take pride in delivering a better service.
The OMC, highly effective in the EU case, is nothing new to Indonesia anyway. It is almost identical to the system of musyawarah (deliberation) and mufakat (consensus) that has already been in place for centuries.
The mechanism has been used in village assemblies to develop general agreement and consensus with the parties adjusting their viewpoints or integrating contrasting viewpoints into a new conceptual framework that everyone is comfortable with.
It also has the virtue of equally respecting the views of everyone involved in the process so the majority cannot impose their views on the minority.
That there was an existing need in the EU for a system such as OMC can be distilled from its motto: Unité dans la diversité (united in diversity) adopted in 2000.
The same need for a process of deliberation and consensus can also be inferred from Indonesia’s motto of a much earlier date: Bhinneka Tunggal Ika (unity in diversity) introduced in 1945. ●
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