All that money…for what?

I was browsing through the 2013 budgetary note from the Ministry of Finance and made this chart (sorry, too lazy to translate it into English):

Obvious thing that I wanted to point out is how wasteful we are for spending our money on mostly energy subsidies (fuel and electricity) which amounts to a total of 274.7 trillion IDR. I made an argument about why I’m against fuel subsidies previously on my other post, but this time I’m going to mention a bit about measuring impact. If Indonesian politicians and/or decision-makers finally had some sense to lift the subsidies, would they spend the money wisely into developing good programs for its citizens?

Program evaluations are not something novel for development work – since the taxpayers of the donor countries would like to scrutinize whether the aid money they’re giving goes into the right directions (or else it’s better to be spent in their own countries). And so, the eval wonks should have something similar to the “impact chain” tool to measure whether what they’re doing  is indeed helping the world to be a better place.

So let’s say you want to distribute some boats for some needy group of fishermen, you don’t only give them the boat put perhaps some capacity development to teach them how to fish better (inputs). The tangible output would be the new boats themselves, and the outcomes would be an increase of their catch when they go out to sea, which subsequently lead to an increase to their welfare (impact). Of course this is an over-simplification and the real stuff would involve baseline data, rigorous methodologies, and resources (time, money and the right brains – oh hey, maybe an MPP degree would help). But doing evaluations is indeed a worthwhile exercise because in the end you get to find out which programs deserve to stay and which ones deserve to be terminated.

Now, how often do we hear the results of the program evaluations made by the government (assuming that they are even evaluated)? Do we even know what are all the programs that the government actually oversees?

The thing is, government spending increases year by year, and it is quite a common knowledge for Indonesians that it is usually spent late in the year. Some attribute it to procurement issues, but most of the time it’s just poor planning. And they can’t make better plans if they don’t evaluate the previous programs beforehand.

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The Mudik Phenomenon

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Source: http://kolomkita.detik.com/baca/artikel/3/783/mudik_pakai_sepeda_motor_hmmm…

After 2 years living in Singapore and not being able to come home to Indonesia for Idul Fitri, this time around I finally had the opportunity to taste my mother’s opor ayam and ketupat again. The reason why I didn’t come home back then was because the tickets were expensive and since it wasn’t a long holiday in Singapore, I prefer to wait until the ticket price was cheaper and when I had more time off. Some choose to go back anyway, never mind the cost because they feel the value that you put by being with your family trumps all costs, hence their willingness to pay (for travel costs) are higher.

The term mudik, the annual exodus for Idul Fitri to go home to your kampung, is a uniquely Indonesian phenomenon. No matter how crazy and dangerous traffic gets, some people would still be willing to endure everything just to be with their families.

From the government’s perspective, the annual mudik is a logistical nightmare. If things go bad, of course the government would shoulder the blame, i.e. bad roads, lack of public transport, etc. But I take a different approach whereby this cultural phenomenon is something that you don’t need to do if the risks are high. I mean, why would someone risk their lives (and others) by being on a motorcycle for long distance travel, in addition to luggage (above picture), just to “save costs” by not traveling with public transport? Judging by the numbers alone (below), motorcycles comprises most of the mode of transport, but they’re not designed for long distance travel (especially with small children)! It is no coincidence then if most accidents involve motorcycles.

20120827-224627.jpgThere are improvements in the public transport. This year, the train services enforces the boarding pass system, reducing the number of middlemen who make the ticket price higher. Next year, they will apply this to buses and ships. As for roads, I am still puzzled by the need to fix them from time to time and again. Is it the poor quality of the construction/repair (linked to the procurement system), is it because it’s taking more weight than it normally can take (allegedly corrupt truck weighing stations), or is it the bureaucracy behind the differentiation of national, provincial and local roads with different budget allocations? Most likely all of the above.

Back to motorcycles, I wonder if next year there will be a policy of limiting the number of motorcycles on the road. A colleague of mine mentioned that one of the reason why they bring motorcycles to their kampung is to show off their “success” in the city. But underneath it all, what I truly wonder is if there would be an end to this mudik phenomenon. Perhaps if development (or access to jobs) were to be spread out and not located in Jakarta or Java alone…

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.

The Middle Class Illusion

In my urban intervention class the other day, we were talking about poverty and inequality in cities. The general assumption that you have of the “middle class” is the majority of the population that lies in the middle with incomes usually defined between $2 to $10 per person per day (in PPP terms). Hence, you would imagine the bell curve.

I would guess that most people would define themselves as belonging in the middle class, but are you really?

I mean, if you have a car, a smartphone, you eat out a lot, you hang out with your friends in cafes (though not necessarily expensive), are you not living above the middle class line? The definition of the middle class is indeed tricky, and us wonks sometimes have high hopes with the “middle class” as the harbingers of change (with the assumption that they are sufficiently educated and demands better government services with the taxes they pay).

However, the “true” middle class may lie largely just above the poverty line hence they are struggling to stay above it and thus most of the middle class are ignorant and largely only care about themselves (i.e. caring about policies that will benefit them), as any self-maximizing individuals should be. I guess there are exceptions of the good Samaritans, but how many of them are really there?

Then there are those who say that they are the middle class, but in fact they live pretty much well-off compared to the rest of the population. They are in the illusion that they belong to the middle class because they still see people who are wealthier than them, while the truth is they’re pretty much upper class.

To quote Sedláček in his interview with Der Spiegel:

We are clearly not communists by nature, but we are definitely communitarians. Only a truly egomaniacal person can live happily in a society in which he is the only rich one. Man has a need for fairness and, therefore, for a fair distribution of wealth.

It’s okay to be rich, seriously. But let’s just be honest and say that you are, instead of pretending that you’re middle class and sneer about others not having the same consciousness as you are. If you do, you’re not trying to build equality but instead you’ve distanced yourself from the masses and have become the new elites that you’ve despised.

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?

Many Indonesians only have one name. Deal with it.

I have grown tired of many articles on Indonesia written by foreign journalist which often uses the cliche statement, “xxx, who like many Indonesians goes by only one name“. Two recent examples are WSJ quoting Vice President Boediono and AP on a story about Evie/Turdi, Obama’s transgender nanny. Yes, like many Indonesians they only have one name.

Why are these foreign journalists so amused by Indonesia’s one-name-ness?

On another note, a friend of mine, who only have a single name, had difficulties going for Umrah. Apparently for the visa application, the applicant must have three names. So he had to used his name, his father’s name, and his grandfather’s name (all of them only have one name!) in order to qualify for the visa.

Perhaps this is a measure of soft power. I reckon that at times people outside of East Asia (i.e. China, Korea, Japan) find it difficult to distinguish family names and first names, which are written in the order of family name first followed by their first name. But now it’s not much of a problem anymore.

I am waiting for the day when I won’t find any article written on Indonesia and pointing out the fascination with our single name. Either that or we need to tell Indonesian parents to prepare at least three names for their children.