Indonesia : mid-term evaluation of USAID's partnership for economic growth grants

Mid-term evaluation covers a period ending 10/00 and reviews four grants, three for partnerships between U.S. and Indonesian entities -- IRIS-LPEM, USF-Udayana, GMU-SIAGA (unidentified acronyms) -- and one to The Asia Foundation (TAF). The four grantee partnerships have compiled a notable record of achievements: (1) IRIS-LPEM organized, on very short notice, 12 major public conferences and 37 seminars, workshops, and other events across Indonesia during the run-up to national elections. IRIS-IPEM also helped to bring a new generation of policymakers and advisors forward as leaders and media spokespersons for reform. (2) TAF has emphasized strengthening the organizational capacity and policy advocacy of small and medium scale enterprise (SME) associations. TAF has also supported studies and analyses of critical importance for SMEs, some of which formed the basis for the conditionality of international financial institutions. (3) USF-Udayana's program focused on skills training for the legal profession (law faculty, lawyers, and notaries) in eastern Indonesia. Subactivities included research grants and short courses for law faculties; legal education and reform seminars; short courses for legal professionals; and provision of technical support to public officials and NGO representatives at both the provincial and regency levels. (4) GMU-SIAGA conducted a "road show" of regional seminars in five selected cities during the period leading up to national elections. Their research has focused on banking regulation and reform; taxation, financial disclosure, and competitiveness; and environmentally sound business practices. In general, grantee activities were highly relevant to a changing Indonesian context and have proven flexible and pro-active in promoting economic reform during a chaotic period. Participants generally ranked the activities as highly relevant, with some variations. A possible explanation for a lower relative score received by GMU-SIAGA is that their program appeared to adhere closely to prior faculty research interests. Participants also tended to rank grantees' implementation of activities as highly effective, though by a lower margin and with wider variability. There was a fairly marked difference between relevance and effectiveness in activities directly related to developing advocacy capacity, and a significant difference in areas identified with policy or institutional reform. Effectiveness in legal skills training was ranked almost equal to relevance, although when asked to name the key barriers to improving economic governance in Indonesia, few participants mentioned legal skills. Emphasis was placed on politics and misguided policies, as well as on official corruption. Performance monitoring systems were set up exclusively to track activity outputs rather than intermediate results or impact, and only three of the four grantees had installed any kind of results targets and monitoring systems at all. The quality of grantees' financial information systems varied even more widely, and two of the four could not provide detailed expenditure data. It was not possible to endorse the efficiency of grants management in these cases. Finally, some of the grantees did not seem to view counterpart contributions in terms of the eventual survival and sustainability of the institutions that had been supported. Participants were optimistic that substantive change could be effected during the next 3 years. Notable exceptions included progress in competition legislation and decentralization. Participants believed that rapid payoff could be achieved in SME empowerment, organization of national SME advocacy groups (e.g., FORNAS), and advocacy training. Also perceived as more doable than not within 3 years were bank restructuring, reform of collateral law, and increasing transparency and accountability. Upgrading the skills of legal professionals was ranked high in terms of immediacy of impact, although participants tended not to list these as highly consequential for future efforts to improve economic governance. There was broad agreement among the participants interviewed that institutional linkages would eventually disappear once external financing was phased out. The majority seemed to believe that an additional 3-5 years of external support, at a minimum, would be needed.