Publication: Increases in Surpluses of Regional Governments in Indonesia: An Empirical Analysis
Loading...
Date
2008-06
ISSN
Published
2008-06
Author(s)
Editor(s)
Abstract
The overall objective of the study is to identify potential causes to the rapid increase in regional government surpluses. It will be shown that regional government surpluses have rapidly increased because of a confluence of three factors: (i) higher than expected revenue, (ii) lower than expected expenditure, and (iii) limited investments in financial assets. The study will identify potential causes for each factor by analyzing differences in actual and budgeted amounts of revenue. This report was presented to representatives of the Ministry of Finance and Decentralization Support Facility (DSF) in a meeting held on 30 May 2008. Comments and corrections of the attendants are reflected in this version of the report.
Link to Data Set
Citation
“World Bank. 2008. Increases in Surpluses of Regional Governments in Indonesia: An Empirical Analysis. © World Bank. http://hdl.handle.net/10986/28247 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Papua Public Expenditure Analysis(World Bank, Jakarta, 2011-10)Papua has abundant natural and fiscal resources but also faces great development challenges. On the one hand, Papua currently has the largest per capita fiscal capacity after West Papua. Papua is rich in natural resources such as non-oil-and-gas minerals and forest products. On the other hand, development challenges in Papua are significant, including geography, terrain and demography. In general, Papua is still underdeveloped both socially and in economic terms compared to other regions in Indonesia. This underdevelopment is evident in most poverty, education, health, and infrastructure indicators. The economy and investment in Papua are dominated by the mining sector and, in a distant second place, the agricultural sector. Between 2004 and 2007, the mining sector accounted for more than 50 percent of the Papua's gross regional domestic product (GRDP). As a consequence, economic growth was determined by fluctuations in mineral commodity prices. The second largest sector is agriculture, which accounts for about 14-18 percent of GRDP. This sector absorbed the most workers in Papua province until 2008. Meanwhile, industry continues to lag and contributed less than 10 percent to GRDP. The PEA is a part of the PEACH (Public Expenditure Analysis and Capacity Harmonization) program. This program is an initiative of the Government of Papua to continuously improve its public financial management performance. Consequently, the analysis contained in this report addresses issues that are the region's main focus. Today, the Government of Papua is trying actively to achieve a 'New Papua' through implementing the following agenda: a) restructuring the local government; b) developing a prosperous Papua; c) developing a safe and peaceful Papua; and d) improving and accelerating the development of basic infrastructure and facilities.Publication 2011 North Sulawesi Public Expenditure Analysis(World Bank, Jakarta, 2011-08)North Sulawesi province is one of the most developed provinces in eastern Indonesia. Far-reaching development has taken place over the past ten years. Presently, North Sulawesi province has the second highest Human Development Index score in Indonesia, and its poverty rate is low in comparison with other provinces. Over the past decade, per capita gross regional domestic product (GRDP) has doubled and sub-national government spending has increased significantly. Nevertheless, there remain various development challenges to address as well as various potential resources and opportunities to pursue. North Sulawesi's performance in regional financial management has been relatively good, but discrepancies remain in the performance and capacity of different work units within each regional government and also between different regional governments in the province. To address challenges, take opportunities, and increase development performance, sub-national governments in North Sulawesi, particularly the provincial government, need to better utilize their fiscal resources. Clearer vision, mission, indicators and development targets must be accompanied by greater efforts to prepare a more directed budget, and to formulate higher quality programs and activities more consistent with planning targets. This report is an effort to assist North Sulawesi's sub-national governments to improve their regional financial management performance, to improve the quality of planning and budgeting, and finally to contribute to local development performance. The report results from strong cooperation between sub-national governments in North Sulawesi province, the Economics Faculty of Sam Ratulangi University, which was supported by CIDA, the Australian Agency for International Development (AusAID) and the World Bank. North Sulawesi Province BAPPEDA (Head of the Regional Development Planning Agency) played an important role in facilitating the preparation of this report. It is expected that this report will benefit North Sulawesi's sub-national governments, sub-national governments elsewhere in Indonesia and the central government by serving as a reference for efforts to improve sub-national financial management performance and the regional development process. Finally, this report can contribute to better and more effective sub-national financial management and governance. Overall, North Sulawesi's strategic sectors (health, education, infrastructure and agriculture) are performing better than in other provinces in eastern Indonesia.Publication Revising Vietnam's State Budget Law (2002) : Proposals Drawing on International Experience(World Bank, Vietnam, 2014-04-08)This Policy Note is designed to inform the Government of Vietnam and National Assembly (notably the Committee on Finance and Budgetary Affairs, CFBA) discussions on the revision of the State Budget Law (SBL) (2002) by drawing on good international practices in budget management. It is part of the World Bank s ongoing policy dialogue with and advice to the Government and the National Assembly on revisions to the SBL (2002). The SBL (2002) has provided a strong basis for regulating Public Finance Management (PFM) in Vietnam since 2004, when the Law became effective. It has helped the government to allocate and spend public resources in an effective manner, thereby contributing to delivery of important public service outcomes. The SBL (2002), however, needs to be revised to enhance Vietnam s fiscal regulatory framework and accountability. The Policy Note covers seven broad areas including: (i) the coverage and layout of the SBL (2002); (ii) the budget framework for fiscal policy making; (iii) budget approval processes at the National Assembly and Provincial People s Councils; (iv) specific budget classification and definition issues; (v) intergovernmental fiscal relations; (vi) budget execution, accounting, reporting and audit; and (vii) extra-budgetary activities. The issues in the Policy Note were prioritized based on earlier discussions with representatives from the Government, National Assembly, and local authorities, and views expressed at the CFBA and United Nations international conference on SBL (2002) revision held in Ninh Binh at the end of September 2013.Publication Implementing EITI at the Sub National Level : Emerging Experience and Operational Framework(World Bank, Washington, DC, 2011-10)The fundamental rationale behind Extractive Industries Transparency Initiative (EITI) is that increased transparency and knowledge of revenues from the extractive industries will empower citizens and institutions to hold governments accountable. By implementing EITI at the sub national level, countries could reduce opportunities for mismanagement or diversion of funds from sustainable development purposes, especially for prominent oil, gas, or mining regions. It is also an effective way of strengthening EITI local ownership among stakeholders. This report presents a preliminary analysis of emerging experiences in EITI countries implementing sub national EITI. Six countries have been selected as case studies: Ghana, Indonesia, Mongolia, Nigeria, the Democratic Republic of the Congo (DRC), and Peru. Based on these experiences, the report proposes a common operational framework for implementing EITI at the sub national level, laying the ground for further practical guidelines on deepening or strengthening the sub national plans or activities of implementing countries.Publication Punjab Debt Sustainability Analysis(World Bank, Washington, DC, 2012-10)Punjab is Pakistan's most populous and economically vibrant province. Its fiscal health, therefore, is crucial to the fiscal stability and economic development of Pakistan as a whole. By end-June 2011, Punjab's outstanding debt stood at Rs. 413 billion, or 4.0 percent of Gross Subnational Domestic Product (GSDP). The low debt level is perhaps not surprising given the historical barriers to borrowing imposed at the federal level. But this has changed profoundly with enactment of the 18th Constitutional Amendment which has allowed provinces to borrow domestically and externally, subject to limits imposed by National Economic Council (NEC). This change has heightened the need to examine what Punjab owes and the question of provincial debt sustainability in general. As there is no threshold defined for subnational debt levels, this sustainability analysis considers unsustainable fiscal policies and borrowing strategy to be those that lead to an explosive accumulation of debt such that it would jeopardize the normal provision of services by the province. The analysis projects the debt outlook through the fiscal years 2012 to 2021, using the Government of Punjab's current Medium-Term Fiscal Framework (MTFF) as the base. The MTFF for fiscal 2012 anticipates fiscal surpluses in medium term, driven mainly by an improvement in provincial finances due to a favorable Seventh National Finance Commission Award, and thus concludes that the debt outlook is sustainable through fiscal 2021: the debt-to-GSDP ratio gradually declines over the next 10 years, to 1.2 percent, from 4.0 percent; the interest payments-to-revenues ratio decreases to 0.9 percent, from 3.0 percent; while the debt service-to-revenues ratio rises by a modest 0.3 percent to 3.3 percent. The analysis then explores some potential vulnerability to economic and fiscal shocks. Punjab's debt sustainability to be fairly robust to most shocks, except when the individual shocks are combined. However, the probability of combined shock remains very low.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2020(Washington, DC: World Bank, 2020)Global value chains (GVCs) powered the surge of international trade after 1990 and now account for almost half of all trade. This shift enabled an unprecedented economic convergence: poor countries grew rapidly and began to catch up with richer countries. Since the 2008 global financial crisis, however, the growth of trade has been sluggish and the expansion of GVCs has stalled. Meanwhile, serious threats have emerged to the model of trade-led growth. New technologies could draw production closer to the consumer and reduce the demand for labor. And conflicts among large countries could lead to a retrenchment or a segmentation of GVCs. This book examines whether there is still a path to development through GVCs and trade. It concludes that technological change is, at this stage, more a boon than a curse. GVCs can continue to boost growth, create better jobs, and reduce poverty provided that developing countries implement deeper reforms to promote GVC participation; industrial countries pursue open, predictable policies; and all countries revive multilateral cooperation.Publication World Development Report 2021(Washington, DC: World Bank, 2021-03-24)Today’s unprecedented growth of data and their ubiquity in our lives are signs that the data revolution is transforming the world. And yet much of the value of data remains untapped. Data collected for one purpose have the potential to generate economic and social value in applications far beyond those originally anticipated. But many barriers stand in the way, ranging from misaligned incentives and incompatible data systems to a fundamental lack of trust. World Development Report 2021: Data for Better Lives explores the tremendous potential of the changing data landscape to improve the lives of poor people, while also acknowledging its potential to open back doors that can harm individuals, businesses, and societies. To address this tension between the helpful and harmful potential of data, this Report calls for a new social contract that enables the use and reuse of data to create economic and social value, ensures equitable access to that value, and fosters trust that data will not be misused in harmful ways. This Report begins by assessing how better use and reuse of data can enhance the design of public policies, programs, and service delivery, as well as improve market efficiency and job creation through private sector growth. Because better data governance is key to realizing this value, the Report then looks at how infrastructure policy, data regulation, economic policies, and institutional capabilities enable the sharing of data for their economic and social benefits, while safeguarding against harmful outcomes. The Report concludes by pulling together the pieces and offering an aspirational vision of an integrated national data system that would deliver on the promise of producing high-quality data and making them accessible in a way that promotes their safe use and reuse. By examining these opportunities and challenges, the Report shows how data can benefit the lives of all people, but particularly poor people in low- and middle-income countries.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.