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development partners’ support for the implementation of A4DES work program in an effective, efficient, transparent and accountable manner, so that the impact of such assistance can be
maximised. TMDF also serves as a mean to identify, select and develop the necessary capacity for a national entity as part of the step to form a Nationally Managed Trust Fund that is fully
managed by Indonesian entity.
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3. Government Regulation on Procedure and Mechanism to Administer Foreign
Loans and Grants, 2011
The Paris Declaration provided the momentum to change the condition of “donorship” to a
different direction, where developing countries are supposed to have ownership over foreign aid on their development. The need to change the previous nature of aid relationships has brought
the government to reform in various areas to retain bigger ownership, as outlined in regulations: Planning and budgeting reforms under Laws No. 252004 and Law No. 172003, government
procurement reform under Presidential Regulation Perpres No. 802003, and the reform of external loans and grants management under Government Regulation PP No. 22006.
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PP No.22006 was a central policy in term of foreign loans andor grants for government of Indonesia. After several years the implementation of PP No. 22006, there are some aspects
in PP No. 22006 that should be reviewed in order to improve the management of foreign aid. Under the A4DES, this regulation also had been reviewed by the WG on PFM as part of their
task to prepare recommendations on the optimization management of foreign aid through development of aid funding mechanisms and to find alternative financing sources andor new
funding schemes along with the development of financing mechanism.
148
146
Id. at 3-2.
147
Felicia Yuwono, supra note 102, at 33.
148
Head of Bappenas Decree No. 33M.PPNHK042009 issued on April 2nd, 2009.
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One important aspect which had been underlined by the WG on PFM was the idea to separate the administrative mechanism between foreign loans and grant arrangement. This is
caused by fundamental differences in characters of foreign loans and grants.
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WG on PFM suggested that the government should amend the PP No. 22006 to simplify the government
procedures especially for the foreign grants to be administered in the state budget. Additionally, WG PFM also tried to satisfy their second task to find alternative financing
sources andor new funding schemes. The WG on PFM had analysed the operation of several multi donor funds in Indonesia. Some important findings include development trust fund
requires a clear policy and regulation to ensure the smooth implementation of activities funded through this mechanism. The clarity of legal aspects in establishing a trust fund, such as the
appointment of national trustee is also important.
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This was also become one of the most important recommendations from A4DES to the government of Indonesia to establish a national
policy regarding a development trust fund. After conducted long discussion with various stakeholders, PP No. 102011 as a replacement of the PP No. 22006 finally was enacted by the
President of Indonesia along with the provision regarding development trust fund within the regulation.
D. MCA-
