ASEM Annual Review Meeting Brussels, June 28, 2006 ASEM PORTFOLIO PERFORMANCE AND IMPLEMENTATION PROGRESS The Government of Indonesia

Portfolio Performance and Result Focus ASEM TF II: –improving the investment climate for economic recovery and promoting growth –Making service delivery responsive to the needs of the poor –Governance and anticorruption efforts Allocation for Indonesia USD 7.0 million –16 projects: 8 on-going and 8 closed –USD 3.5 million has been disbursed, USD 3.3 million is expected to be disbursed

Implementation progress, constraints, and opportunities Delays in disbursement happen for budget administration complexities and frequent re- organization. The Government plans to revive ICSC meetings to expedite disbursement and enhance performance It is essential to build concurrence on mechanism, selection criteria, and monitoring and evaluation system among Government as recipient, the World Bank as administrator, and other involved donors.

The Experience of ICSC Ministerial Decree No. Kep.306/M.PPN/10/2002 was issued to establish ICSC consisting members of related Government agencies. ICSC collaboratively established a mechanism to facilitate cooperation between the Government and the Bank. Unfortunately, some staff of the Bank apparently had not been satisfied with the mechanism. Issues should be resolved: –Clarity on criteria for proposal selection –Lack of Government role on monitoring and evaluation –No appropriate cooperation in evaluating a project: no cross check before issuing some evaluation report –Little information on Bank executed projects

Recommendation for Future ASEM TF Refer to lack of transparency and unclearness in mechanism of proposing projects as the case with ASEM TF II, the Government has several recommendations as follows: 1.To enhance the optimal operation of ICSC, it is essential to formulate a joint MOU among the recipient, TF administrator, and involved donors in order to formulate a clear mechanism in selecting project proposals. 2.A comprehensive discussion on expected beneficiaries of project is essential in order to insure that the project produces positive impacts and benefits.

Recommendation for Future ASEM TF 3.Discussion to define the target beneficiaries is essential in order to have a positive impact on those who are most in need. 4.The Government, the Bank, and the involved donors should cooperate and develop a mechanism for monitoring and evaluation of ASEM TF II projects. 5.There should be clarity on the agencies eligible for submitting proposals.

Thank you Brussels, June 28, 2006