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Publication(International Monetory Fund and the World Bank, Washington, DC, 2007-06) Allen, R. ; Eckardt, S. ; Jacobs, D. ; Kristensen, J. ; Lienert, I. ; Schiavo-Campo, S.This report is designed to assist the authorities develop an overall road map for reforming budget preparation. A specific focus is on the steps to be taken to introduce a medium-term framework for the central government's budget and a performance-based budget. These reforms require important preconditions to be in place, and a substantial change in the culture, incentives and behavior of the public service, and are likely to take several years to complete. Successive Indonesian governments have embarked on various reforms in the budget and public financial management system. New laws for governing budget and planning processes were adopted during 2003-04, which are gradually being implemented. The national development planning agency (BAPPENAS) and spending ministries have developed strategic government and ministerial plans that provide a basis for elaborating the framework for performance measurement and evaluation. Reforms are thus starting from a secure base and can also take advantage of the improved and stable macroeconomic and fiscal conditions, including a low fiscal deficit and a declining government debt ratio.