Translation of PPP Reference Guide into Bahasa Indonesia strongly supports national PPP delivery efforts
Indonesia’s strategy to become one of the 10 major world economies by 2025 – part of a long-term program outlined in its Masterplan for Acceleration and Expansion of Indonesia's Economic Development (MP3EI) – relies heavily on how quickly it can build new infrastructure to support its rapid growth. This entails cooperation among the central government, local governments, state owned enterprises, and the private sector. Of the four parties, according to experts on the ground, “the private sector has a vital role to play in this masterplan (in the form of PPP schemes), as it is expected to contribute the bulk of financing.”
On an institutional level, however, the development of PPPs is still in flux as the country experiments with the most suitable fit. A recent OECD report on Indonesia explains why:
Following the Asian crisis Indonesia in the early and mid-2000s embarked on a reform process aimed at revitalizing the Indonesian economy. Part of this process involved the implementation of a legal and institutional framework that could serve as basis for a larger degree of private participation in the form of public-private partnerships (PPPs). The legal and institutional framework establishes a basis for the involvement of private participation in infrastructure construction, finance and management. Although the development of the framework has come a long way, the Indonesian government sees the framework as a work in progress and adjusts it to reflect lessons learned through its experience with PPPs.
Working on “a work in progress”
It’s precisely because PPP frameworks are a “work in progress” that the new translation of the PPP Reference Guide into Bahasa Indonesia – the Indonesian language – is so important for us here at the Indonesia Infrastructure Guarantee Fund (IIGF). The PPP Reference Guide was jointly developed by the World Bank, the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB), and funded by the Public-Private Infrastructure Advisory Facility (PPIAF).
This translation allows us to standardize our approach to PPPs with the rest of the world’s. Just as critically, this translation gives us a voice – our own voice – suited to discussions about our own issues, challenges, and opportunities.
The PPP Reference Guide gives brand-new Indonesian PPP agencies like ours access to a substantial body of knowledge built from the ground up, over many decades. Its contributors come from governments, the private sector, international institutions, and academic bodies. Their advice focuses on what PPP practitioners should know, as opposed to advice on what to do. The Guide sets out the main topics, looks at the issues that must be addressed, and provides references that PPP practitioners can turn to for answers, while also building on their own knowledge and understanding.
In the Indonesian context, and that of other nations that are launching PPP programs, the PPP Reference Guide is the map as we chart our course, strategizing on “Plan A,” “Plan B,” and “Plan C” simultaneously.
Role of the Indonesia Infrastructure Guarantee Fund
As the OECD explained in its report, infrastructure investment as a percentage of government expenditure in Indonesia decreased sharply following the Asian crisis, from just below 10 percent to about 4 percent. PPPs have not yet enabled the Indonesian government to increase its infrastructure investment. However, through greater use of PPPs in toll roads, rail, and power generation, the Indonesian government wants to significantly ratchet up infrastructure development, as a means of maintaining the high economic growth rates it needs as a frontline emerging market economy.
That’s where IIGF can play a role. IIGF is a State-Owned Enterprise established by and under the guidance and supervision of the Ministry of Finance, which has the duty to accelerate the provision of infrastructure services through PPPs. IIGF is 100% owned by the Government of Indonesia, structured to minimize the risk of political interference, and places a high priority on transparency and openness. To some extent, IIGF was established with help from the World Bank, which gave technical assistance in the development of operations manuals, corporate governance, and other critical functions.
Through our IIGF Institute --which was established by IIGF as the resource and knowledge center in the country -- we look forward to contributing to the international body of knowledge that makes the PPP Reference Guide so valuable. We are determined to see future editions of the PPP Reference Guide feature expertise gleaned from initiatives that are underway in our country, and we believe that the lessons learned and compiled by IIGF Institute around Indonesian infrastructure and PPP practices will ultimately help other nations in the years to come.
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