Indonesia: World Bank: Quality Spending is Key to Achieving Development Goal

• Jan 17, 2017

TEMPO.CO, Jakarta – Finance Minister Sri Mulyani endorsed a World Bank assessment that in order to achieve its development goals, Indonesia must significantly improve the quality of its public expenditure.

“Proper budget allocation is important but equally important is how it will be spent,” said Sri Mulyani, at the launch of the World Bank’s Indonesia Economic Quarterly-Sustaining Reform Momentum at the Center for Strategic International Studies (CSIS) on Thursday, January 17, 2017.

However, Mulyani recognized the big challenge faced by the local administrations, the budget end-users when they determine which programs will be the most effective.

Mulyani is concerned on how the funds transferred to Indonesia’s more than 75,000 villages will be used. “There are good and bad local governments,” said Mulyani, acknowledging the different efficiency levels of administrations across the nation. “The question is not what, but how spending can be most effective.”

According to the World Bank, education is one area where the effectiveness of spending can be improved.  The government is striving to improve the quality of education and to assist students to develop higher-order thinking skills.  The use of a student-centered learning approach is considered to be at the core of this change, which involves less teacher-centered lecturing and more interactive learning, drawing on practical teaching practices with a connection to real world contexts.

The report, however, fails to mention the urgent need for vocational training, which economic observers believe would be one option to solving the over five percent unemployment rate, involving about 7 million jobless people in the country.

The World Bank’s economic quarterly report rated  Indonesia’s economic performance and policy reforms  in 2016 well enough to have weathered the risks caused by the global uncertainty. It reported that the current account deficit narrowed and direct investment was strong during the third quarter last year.  Additionally, fiscal policy credibility was enhanced through expenditure cuts in 2016 and more realistic revenue targets in the approved 2017 Budget. The World Bank projects GDP growth in 2017 at 5.3 percent, a slight increase over last year’s projection of 5.1 percent.

Source: https://en.tempo.co/read/news/2017/01/17/056836863/World-Bank-Quality-Spending-is-Key-to-Achieving-Development-Goal