The Policy Cycle…Sort of.

In my early weeks of studying PP5111 – Introduction to Public Policy and Policy Analysis, we learned something called the policy cycle (sketch below). At first I took it for granted and couldn’t care less about the whole thing because it seemed so simple and logical – why would anyone need to learn about it? Well, after graduation and entering into the workforce again – and this time around being on the government side – I have come to my senses that policymakers often forget about the policy cycle. Mostly, they don’t take seriously the monitoring and evaluation part.

Theoretically speaking, policy monitoring and evaluation ensures that the outcome of the policy is directed into the right beneficiaries and if there’s anything wrong with the policy (the design, how it’s implemented, etc.), it can be corrected so the problem you’re trying to solve in the beginning gets solved, instead of creating another set of problems.

Two months into my job, the core task of our unit (apart from other tasks as well) is exactly the monitoring part – ultimately to make sure that the development programs set by the President gets delivered by the end of his period, or to report why it’s not delivered if that’s the case. The learning curve have been steep, but so far I have gained so much knowledge and lessons learned, mostly the dos and don’ts of the many policies in the Indonesian government and understanding the inherent implementation difficulties in our current institutional setting.

And so, the lack of posts in this blog for the past two months is because I’m finding it hard to squeeze the very tight amount of free time that I have into blogging. Commuting back and forth to my workplace have also taken quite a bit of energy (I don’t drive to the office and take the public transport) so during the weekends I use my time to get some Zzzz. Now I’ve finally found my rhythm and hopefully can get back to my regular blogging cycle soon.

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Shedding some light on land acquisition in Indonesia

I am nearing the end of my public policy studies in Singapore and I am very happy with my thesis/report on land acquisition in Indonesia. I was finishing it for the past few weeks, hence the recent absence of blog posts. I should be happily blogging again after I finish one more paper on Political Islam in Indonesia.

Screenshot of my thesis cover

I gave a presentation to UKP4 on my research (since they are my client) and here’s some excerpt on what has been causing delays in land acquisition in Indonesia:

  • Information Asymmetry: Lack of information and understanding about the project, and clarity on how much land and when exactly landowners are getting compensated may cause resentment or protests which subsequently delay the whole process of acquiring land. Finding the rightful parties entitled for the compensation (not limited to those who own the legal title) also prove to be difficult. This gives room for land speculators and ill-intentioned third parties to come in as well.
  • Difficulty in Negotiating Compensation Price: Landowners would want to be compensated based on the market value of their land, but the government is reluctant to do so because it is safer to pay the compensation based on the NJOP (Nilai Jual Objek Pajak) value. This is because the previous Presidential Regulation No. 65/2006 was ambiguous in providing a legal basis for market valuation and the usage of appraisers.
  • Financing Gaps: There is often a difference between the estimated costs for acquiring land and the actual payment given to landowners. Relying in government funds to pay the difference would mean to wait for the next budget cycle and this causes another delay (not to forget that this irritates the landowners because they’re waiting to be compensated).
  • Government Asset Swaps (ruislaag): The difficulty in acquiring land/properties which belong to the central/local government is that you need to find suitable land for relocation and of similar value to “swap” it with. For the Lebak Bulus MRT depot, it is hard to find land for relocation for the Lebak Bulus sports stadium and the police housing and academy.

In the 45-page full report I explained the shortfalls of the new Land Acquisition Law (Law No. 2/2012), the details on the causes of delays as well as the recommendations to “debottleneck” the delays.

I am more than happy to share the report, but let me wait to get clearance from my school and the client beforehand.

Diagram on the Fuel Subsidies Debate

Here’s my quick note on the back-and-forth debate regarding the fuel subsidies:

My fellow wonk friend Taufik wrote an article questioning those who are against the policy, whether they are only looking at the short-term welfare effects by keeping the low fuel prices. Agreeing with Taufik, the economics are clear here, scrapping fuel subsidies is the way to go. However, the political aspects remains to be tricky.

A caveat, the diagram above is a simplification of the real world situation in Indonesia. It is easy for policymakers to sit on the pedestal and argue that in the long-run we are maximizing welfare by removing the unsustainable subsidies. The truth is, the visibility of how welfare and equity are achieved really depends on where that money is being spent elsewhere, and how fast it can reach to the disadvantaged groups of society.

Therefore, those of you who are in disagreement, I would say that it is better to scrutinize the government more on Indonesia’s social welfare programs that targets better for the poor and investment on the public transport system – as the welfare effects are greater for society.

Take note, however, the government will not be winning any trust points with the citizens if they don’t prioritize correctly – such as establishing the anti-pornography task force over dealing with corruption.

In Indonesian Football, it’s Politics over Talents

What do you do after your football team just lost 10-0 in a Pre-World Cup match? Boycott the media, because they presented you in a bad light. At least that’s what the Indonesian Football Association (PSSI) did.

The humiliating defeat to Bahrain last week was a culminating point in a series of Indonesia’s mismanagement in the country’s beloved sport. The current PSSI fired coach Alfred Riedl after his success in putting the national team as runner-up in the 2010 AFF Suzuki Cup; they sacked four members of their executive committee; there is still confusion in the dualism of the Indonesian Premier League; even after FIFA had to step in through a “normalization committee” to elect a new PSSI chief because the previous one was a convicted corruptor.

Mr. Johar Arifin, the current PSSI chief, was quick to point out that Bahrain and the referee for the match was to be blamed for the loss. FIFA will conduct an investigation, considering that the 10 point win was too convenient for Bahrain who needed it to advance to the next round. However, this does not mean that PSSI is free from the scrutiny of not bringing their best players for the match, even though they had no chance of advancing themselves.

In the interview, Mr. Arifin responded that the reason of why they’re not bringing the senior players on the field was because “they are all mafia because they have been contaminated by the ways and behaviors of the old PSSI”. Despite their talent, many shining footballers were unable to wear the Garuda emblem on their chest because they did not follow the rules of the “new PSSI” or they did not play in the official PSSI league.

There’s a saying in Indonesia, “buruk muka cermin dibelah“, you break the mirror for your ugly face, which means that you’re blaming others for your mistake. Why can’t PSSI look straight in that mirror and see that they are in dire straits and in need of serious organizational reshaping?

Supreme Court updates definition of “petty crime”

The Indonesian Supreme Court issued Supreme Court Regulation No. 2 of 2012 to update the definition of petty crime under the Indonesian Criminal Code.

Under the outdated Criminal Code formulated in the 1960s, the nominal value of petty crime was Rp. 250,- and it is now multiplied by ten thousand times to Rp. 2,5 million. The affected articles would be Article 364, 373, 379, 384, 407 and 482 of the Criminal Code. With this decree, cases involving the nominal value less than Rp. 2,5 million does not need to go into the process of cassation with fast court proceedings that can be done in a day, or it may not even be criminalized.

I would see that this was a good response from the Supreme Court with the increase of media reports on citizens being criminalized for stealing a pair of sandals or cocoa beans – those of trivial nominal value. True,¬† no crime can go unpunished, but the sense of “justice” of many law enforcement agencies were seriously questioned in light of these cases.

Will the Supreme Court regulation affect the police and prosecutors? No, it will only be binding with the Supreme Court judges, but it is a good start considering that we can’t expect the revision of the Criminal Code to finish anytime soon.

Risks and Rewards

Corruption charges! Corruption? Corruption is government intrusion into market efficiencies in the form of regulations. That’s Milton Friedman. He got a goddamn Nobel Prize. We have laws against it precisely so we can get away with it. Corruption is our protection. Corruption keeps us safe and warm. Corruption is why you and I are prancing around in here instead of fighting over scraps of meat out in the streets. Corruption is why we win. – Danny Dalton, Syriana (2005).

Why do people cheat?

Is it motivated by the lack of satisfaction with what they already have, thus the false need of wanting more? Or is it because, in general, they perceive that the rewards that they would get is higher than the risks that is involved?

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Over the past few weeks, the Indonesian media has been highlighting the Nazaruddin corruption case, who is currently on trial for rigging the construction tender of the athlete’s village for the SEA Games last year. Nazaruddin, who was the Democratic Party’s treasurer at the time, stated that he did not act alone and subsequently accuse the involvement of Anas Urbaningrum (the Party’s chairman) and Angelina Sondakh (the Party’s deputy secretary general and former Miss Indonesia).

President Yudhoyono is the chief of patron of the Democratic Party, the ruling party in Indonesia, which managed to get 21 percent share in the 2009 election. A recent poll by the Indonesian Survey Institute showed that if elections were to be held now, the Party’s share would drop to 13.7 percent, second to Golkar. President Yudhoyono was re-elected in 2009 over his promise in tackling Indonesia’s corruption problems, but the graft cases in his own party have been overshadowing his performance.

President Yudhoyono have made it clear that he will not suspend Anas, but he will not protect him either if the Corruption Eradication Commission (KPK) declares him as a suspect. Angelina, on the other hand, was removed from the deputy secretary general position on Friday (24/02) after she was named a suspect by KPK, although she is technically still an MP.

In Singapore, a high profile corruption case that has been on the news recently was about Singapore Civil Defense Force (SCDF) commissioner Peter Lim and Central Narcotics Bureau (CNB) director Ng Boon Gay. Both of the officers are married and they are being investigated by the Corrupt Practices Investigation Bureau (CPIB) on an IT-related procurement contract case allegedly involving not just money, but sex with a married IT executive.

The Ministry of Home Affairs (MHA) stated that they moved swiftly to replace the two senior civil servants in late January, not long after the investigations began at the end of December and early January. A Singaporean blogger questioned however, why was there a delay in making the investigations public.

The investigation is still ongoing, but a Singaporean friend commented, “if the two officers are proven guilty, they are surely done in Singapore. They can only get a private job most probably outside of Singapore.”

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The two cases above illustrates that they are willing to risk themselves in engaging in an act that is seen to give them better rewards despite the rewards that they already have in their high-ranking position. Why?

Perhaps because they operate in a system that does not penalize them for engaging in such acts. If the rewards from corruption is high, and the risks of getting caught is low (or you can get caught but can get away with it easily), why wouldn’t they?

They say that the root problem of corruption is the low pay that public officials receive, hence the need for rent-seeking behaviors. Giving higher salary, however, does not solve the problem either, as in the case in Singapore (they are among the most well-paid civil servants in the world) and in the recent case of another Gayus in the tax department (reportedly he makes Rp. 8 million per month despite his low rank – which is much better compared to other civil servants in Indonesia).

Is it then the question of greed, not need?

What I would like to highlight here is that we need to create an environment where engaging in corruption is something to be seen as “high risk-low reward“. In order to do so, we would need not only political will from the leaders to fight corruption, but also society’s low acceptance towards corruption.

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On paper, Indonesia’s political will to fight corruption is on the right track. The strategy is right to focus on preventing corruption especially in the law enforcement agencies (another blog post of mine might illustrate why), reflected in the Presidential Instruction 9/2011 (see chart below, taken from UKP4). Quah (2007) argues that you can also see political will in fighting corruption in how much budget and qualified personnel is allocated towards the Anti-Corruption Agencies in the country.

Strategy for Preventing and Eradicating Corruption (Inpres 9/2011)If only there are publicly available information on how we are doing so far with corruption prevention and eradication efforts, then I can probably give a fair assessment. I lament on the media’s reporting on how much corruption is going on, I wonder how many government efforts are actually successful but not reported.

On the other hand, what signals political will to fight corruption to the public, is how swift the political leaders are in acting or responding on corruption cases in their organizations (i.e. suspension of their officers). That is why President Yudhoyono’s hesitation with what is going on in his party is creating questions in the eyes of the public regarding his own political will to fight corruption. To be fair, other political party leaders need to be scrutinized for their slow responses in their party members’ behaviors as well.

On society’s acceptance or attitude towards corruption, this is a bit tricky. I question whether corruption is a part of our culture, because culture is supposed to be seen as something that collectively agree upon. So, is corruption really “okay”? I believe this is a valid question as well in China and their guanxi practices.

A recent effort to challenge society’s definition of corruption is seen in the movie Kita vs. Korupsi (Us against Corruption). Without a collective effort to condemn corruption, even government efforts are futile if we are complacent with the problem.

At least what I see from the Singapore case is that the people are very intolerant towards corruption, as evidenced by the anecdotal remark by my friend above. In Indonesia, unfortunately it is not uncommon for former corruption convicts to run for public office and in few instances they actually get promoted, not demoted from their position. This sort of toleration is what creates that “low risk” situation that I mentioned earlier.

There are details in creating that “high risk-low reward” environment for corruption that I can’t elaborate one by one (and I believe there are more experts on this issue). I sincerely hope, however, that Indonesia can expedite the process in preventing people’s tendency to cheat or engage in corruption.

The irony of government spending

Reading Indonesian newspapers usually depresses me, but on Wednesday the two covers of Kompas and the Jakarta Post particularly made me lose my appetite.

Kompas and The Jakarta Post (18 January 2012)

On the left is a picture on the renovation of the DPR Budgetary Body room, how the newly imported chair from Germany each costs Rp. 24 million. On the right, is a picture of a damaged bridge in Lebak, Banten, used by children to go to school.

As usual, only after it has gotten national and international media coverage, seven days after the bridge was damaged the Bupati, Mr. Mulyadi Jayabaya, decides to visit the site and made an attempt to cross the bridge as well – only to find that he was not as fit as those children are.

The costs for repairing the bridge, he said, is roughly Rp. 600 million with the duration of 3 months.

The total costs for renovating the DPR Budgetary Body room is roughly Rp. 20 billion, and I’m pretty sure it will take less than 3 months to finish. I believe the honorary members of the representatives can’t wait to have its next meeting discussing future government spending in those comfortable chairs.

Oh well.