CIVIL SERVICE REFORM IN INDONESIA - United Nationsunpan1.un.org/intradoc/groups/public/documents/... · CIVIL SERVICE REFORM IN INDONESIA ... Criteria for Output Outcome Process

CIVIL SERVICE REFORM CIVIL SERVICE REFORM IN INDONESIAIN INDONESIA

PrijonoPrijono TjiptoherijantoTjiptoherijantoProfessor of EconomicsProfessor of EconomicsUniversity of IndonesiaUniversity of Indonesia

IntroductionIntroduction

New Public Administration

Government

Business SectorCivil Society


Development in civil service administration:Development in civil service administration:

PUBLIC ADMINISTRATIONAll process, organization and individual associated with carrying out

laws and other rules

PUBLIC MANAGEMENTGlobal reform movement that redefines the relationship between

Government and society

GOOD GOVERNANCECreating an effective political framework conducive to private

action


ResponsivenessProfessionalismImpartialityKey Attribute

ProcessOutcomeOutputCriteria for Success

Accountability, transparency and participation

Efficiency and result

Compliance with rule and regulations

Guiding Principles

Citizens and Stakeholders

CustomersPoliticiansAccountability of Senior Officials

EmpowermentEntitlementObedienceCitizen-State Relationship

Responsive Governance

Public Management

Public Administration

Table 1Three Models of Public Administration

Source: UN, Dept. of Economic and Social Affairs, World Public Sector Report 2005, New York: 2005

Indonesian Civil ServiceIndonesian Civil Service

Globalization DemocratizationDecentralization

TransparencyOpenness etc

External Internal

Straighten up Bureaucracy

Structure

Improving Human ResourcesCondition

Structuring the modern and Efficient bureaucracy

Number of Civil ServantNumber of Civil Servant

3.74 million civil servants among about 220 3.74 million civil servants among about 220 million people of Indonesia in 2005.million people of Indonesia in 2005.In 2005, one public employee has to serve 58 In 2005, one public employee has to serve 58 to 59 persons. This number has been similar to 59 persons. This number has been similar since 2003since 2003In 2002, one public employee has to serve 55 In 2002, one public employee has to serve 55 to 56 persons.to 56 persons.In 1974, one public employee has to serve 47 In 1974, one public employee has to serve 47 to 48 persons.to 48 persons.

Number of Civil ServantsNumber of Civil Servants

Table 2Total Civil Servant in Indonesia, 1974-2005

1003,741,4951003,648,0051003,823,0861001,674,871TOTAL

67.92,541,56068.42,496,951Regency/ Municipality

3

8.1303,7248.5311,047

76.02,907,42621.7362,617

Provincial Government

2

24.0896,21123.1840,00724.0915,66078.31,312,254Central Government

1

%Number%Number%Number%Number

20052003*)20021974Job

PlacementNo

Source: National Civil Service Agency (BKN); various publications, Jakarta.


21.7%

78.3%

24.0%

76.0%

Composition of Central and Local Government Employee

19742003

Provincial and Municipality Government Employee

Central Government Employee


Higher share of local government employee in total Higher share of local government employee in total civil servant is in line with the objectives:civil servant is in line with the objectives:Giving a better quality services to the publicGiving a better quality services to the publicMoving closer to the societyMoving closer to the societyIn Cambodia: In Cambodia: ““Serving People BetterServing People Better””

Even though the number of civil servant is only 1.7 Even though the number of civil servant is only 1.7 --1.8 1.8 percent of total population, its quality is rather low, percent of total population, its quality is rather low, partly affected by the salary system in Indonesia partly affected by the salary system in Indonesia which is considered unattractive.which is considered unattractive.

Salary SystemSalary System

High Level of Rewards

Create a secure and comfortableWorking condition

Reduce tendency to make aDeviation or wrongdoing

Higher productivity and qualityOf works


The salary system in Indonesia: COMBINATION The salary system in Indonesia: COMBINATION SCALE SYSTEMSCALE SYSTEM

The Single Scale SystemThe Single Scale SystemThe same salary is given to employees at the same The same salary is given to employees at the same level or rank regardless their job or level of level or rank regardless their job or level of responsibilityresponsibilityThe Double Scale SystemThe Double Scale SystemThe salary is given to employee based on their job or The salary is given to employee based on their job or level of responsibilitylevel of responsibility


Some facts:Some facts:The basic salary for the lowest rank, The basic salary for the lowest rank, IaIa(primary and junior high school graduate) is (primary and junior high school graduate) is around US $ 66 per montharound US $ 66 per monthThe basic salary for the highest rank, The basic salary for the highest rank, IVeIVe with with 32 years in service is around US $ 207 per 32 years in service is around US $ 207 per month or equivalent to 6% of the salary of month or equivalent to 6% of the salary of CEO at ordinary SOECEO at ordinary SOE


6.9

5.4

3.0 3.1 3.1

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1993 1997 2001 2003 2005

Year

Rat

io o

f Sal

ary

IVe

to Ia

Ratio of Basic Salary of the Highest Earner to the Lowest Earner


Theoretically:Theoretically:EgaliterianEgaliterian pay structure more attractive for pay structure more attractive for the lower rank of civil servicesthe lower rank of civil servicesHigher Higher ““paypay--ratioratio”” structure more conducive structure more conducive for higher rank officialsfor higher rank officials

In Indonesia:In Indonesia:Salary structure is moved into the different Salary structure is moved into the different

directiondirection

Basis for ChangeBasis for Change

Hunter and Shah (1998) have developed a good governance Hunter and Shah (1998) have developed a good governance quality index based on four sub indexes, namely:quality index based on four sub indexes, namely:A citizen participation index (an aggregated measure using A citizen participation index (an aggregated measure using indexes of political freedom and political stability).indexes of political freedom and political stability).A government orientation index (an aggregated measure A government orientation index (an aggregated measure using indexes of judicial efficiency, bureaucratic efficiency using indexes of judicial efficiency, bureaucratic efficiency and lack of corruption).and lack of corruption).A social development index (an aggregate measure using A social development index (an aggregate measure using indexes of human development and egalitarian income indexes of human development and egalitarian income distribution).distribution).An economic management index (an aggregated measure An economic management index (an aggregated measure using indexes of outward orientation, central bank using indexes of outward orientation, central bank independence, and inverted ratio of debt to gross domestic independence, and inverted ratio of debt to gross domestic product).product).

Basis for ChangeBasis for ChangeTable 4

Quality of Governance of Selected Countries

34Pakistan1236Nepal1138Indonesia10 Poor39China943Thailand843India744Philippines6 Fair45Sri Lanka557Rep. of Korea458Malaysia363Japan2 Good65Singapore1

Governance QualityQuality IndexCountryNo

Source: Adapted from Table 2.1 of Jeff Hunter and Anwar Shah, 1998.


World Bank Indicator of governance:World Bank Indicator of governance:1.1. Voice and accountabilityVoice and accountability2.2. Political stabilityPolitical stability3.3. Government effectivenessGovernment effectiveness4.4. Regulatory qualityRegulatory quality5.5. Rule of lawRule of law6.6. Control of corruptionControl of corruption


Government effectiveness index: comparing the Government effectiveness index: comparing the quality of public bureaucracy, policyquality of public bureaucracy, policy--making making and service delivery.and service delivery.

Government effectiveness contributed to higher Government effectiveness contributed to higher national income (Kauffman, 1999)national income (Kauffman, 1999)


Some impacts of poor governance (World Bank):Some impacts of poor governance (World Bank):Undermine development effortsUndermine development effortsHinder progress toward poverty eradicationHinder progress toward poverty eradicationInfringe on human rightInfringe on human right

SINCE INDONESIA FALL IN THE CATEGORY SINCE INDONESIA FALL IN THE CATEGORY OF POOR GOVERNANCE QUALITY, A OF POOR GOVERNANCE QUALITY, A REFORM IN PUBLIC SERVICE IS BADLY REFORM IN PUBLIC SERVICE IS BADLY AND SERIOUSLY NEEDEDAND SERIOUSLY NEEDED

Institutional ApproachInstitutional Approach

Civil service reform: developing the capacity of the civil Civil service reform: developing the capacity of the civil service to fulfill its mandate, defined to include issues of service to fulfill its mandate, defined to include issues of recruitment and promotion, pay, number of employee, recruitment and promotion, pay, number of employee, performance appraisal and related matters, still constitutes theperformance appraisal and related matters, still constitutes themain part of national programs for public administration main part of national programs for public administration reform. reform.

Civil service reform has historically focused on the need tCivil service reform has historically focused on the need to o contain the costs of public sector employment through contain the costs of public sector employment through retrenchment and restructuring, but has broaden towards retrenchment and restructuring, but has broaden towards focusing on the longer term goal of creating a government focusing on the longer term goal of creating a government workforce of the right size, with the appropriate mix of skills,workforce of the right size, with the appropriate mix of skills,and the right motivation, professional ethos, client focus and and the right motivation, professional ethos, client focus and accountability.accountability.

(UNDP, 2003)(UNDP, 2003)


CivilServiceReformStrategy

forIndonesia(World Bank)

Incentive System

Size of the Civil Service

Recruitment

Performance Management

Remuneration

Probity


Important factors in service civilreform in Indonesia

InstitutionalBuilding

MoralConduct


In order to have an effective and efficient public service,In order to have an effective and efficient public service, most of the most of the governments have developed special institution in charged of humgovernments have developed special institution in charged of human an resources management. In some countries this body is called resources management. In some countries this body is called Civil Service Civil Service CommissionCommission (CSC) or (CSC) or Public Service CommissionPublic Service Commission (PSC). (PSC).

In Korea, the CSC established on May 24, 1999, has been leading In Korea, the CSC established on May 24, 1999, has been leading South South KoreaKorea’’s major civil service reform initiatives. On June 12, 2004, perss major civil service reform initiatives. On June 12, 2004, personnel onnel management function, previously remaining in the Ministry of Govmanagement function, previously remaining in the Ministry of Government ernment Administration and Home Affairs was transferred to the CSC, creaAdministration and Home Affairs was transferred to the CSC, creating the ting the single central personnel authority for the Korean government (Kosingle central personnel authority for the Korean government (Kong, 2006). ng, 2006).

In New Zealand, The State Service Commissioner of New ZealaIn New Zealand, The State Service Commissioner of New Zealand in 1999 nd in 1999 asked that he be given responsibility to develop a solution to tasked that he be given responsibility to develop a solution to the absence of he absence of corporate capacity in the public service. Since then, the New Zecorporate capacity in the public service. Since then, the New Zealand aland public service has moved to address wide range of service public service has moved to address wide range of service –– wide human wide human resources management issues from an increasingly corporate perspresources management issues from an increasingly corporate perspective ective (U.N, 2005). (U.N, 2005).

Institutional ApproachInstitutional ApproachTable 5

Responsibility for human resources management inCentral government agencies

Training and DevelopmentNational Administrative Staff College

5

Appointment, promotion, transfer and discipline

Public Service Commission

4

Deployment and condition of service for public servants

Ministry of Public Service

3

Pay and pensionsMinistry of Finance2

Overall government policyOffice of the Prime Minister

1

FunctionAgencyNo

Source: Adopted from table 6 of United Nations; “World Public Sector Report 2005”, New York.


In Indonesia:In Indonesia:PSC or CSC is not yet exist, even though Law PSC or CSC is not yet exist, even though Law No. 43/1999 stated that CSC should be No. 43/1999 stated that CSC should be established.established.Human resources Management is still in the Human resources Management is still in the hand of the institution within the government hand of the institution within the government bureaucracy, not in the hand of independent bureaucracy, not in the hand of independent body such as CSC or PSC.body such as CSC or PSC.

Institutional ApproachInstitutional ApproachTable 6

Institutions responsibility for human resources Management in Indonesia

Education, training and organizational design

National Institute of Public Administration

5

Appointment, promotion[3] and transfer

National Agency for Civil Service

4

Supervision, coordination, monitoring and evaluation of all civil service’s matters

Ministry of Administrative Reforms[2]

3

Pay and pensionsMinistry of Finance[1]2

Overall government policiesOffice of the President (State Secretariat and Cabinet Secretariat)

1

FunctionAgencyNo


Some notes:Some notes:1.1. The Ministry of Finance is responsible for pay and pensions The Ministry of Finance is responsible for pay and pensions

system of the civil service. However the Statesystem of the civil service. However the State--Owned Owned Enterprise (SOE) responsible for pay and pensions in under Enterprise (SOE) responsible for pay and pensions in under supervision and direction of State Ministry for Statesupervision and direction of State Ministry for State--Owned Owned Company (Company (MenteriMenteri Negara BUMNNegara BUMN)..)..

2.2. The Ministry of Administrative Reform has a powerful The Ministry of Administrative Reform has a powerful authority since National Agency for Civil Service (BKN) and authority since National Agency for Civil Service (BKN) and National Institute of Public Administration (LAN) is under National Institute of Public Administration (LAN) is under his functional supervision and coordination in their daily his functional supervision and coordination in their daily activities.activities.

3.3. Promotion for highest echelon (Echelon I) is done by Promotion for highest echelon (Echelon I) is done by ““the the evaluation team (TPA)evaluation team (TPA)”” directly directly choosedchoosed by the President. by the President.

Moral IssueMoral Issue

Government employees in Indonesia are Government employees in Indonesia are sometimes considered as Community Leaders sometimes considered as Community Leaders ((PanutanPanutan))As a community leader, they should have As a community leader, they should have ““moralitymorality”” (good personality, avoid the (good personality, avoid the irregularity, always obey the rules in irregularity, always obey the rules in conducting their activities)conducting their activities)


Carl J. Carl J. FriederichFriederich (1940) noted that the growing importance of (1940) noted that the growing importance of the internal values, moral and professional, and standard of the internal values, moral and professional, and standard of bureaucrats. Without a good moral and professionalism, an bureaucrats. Without a good moral and professionalism, an abuse of power can easily happens in the government sector. abuse of power can easily happens in the government sector.

The recent study done by Meier and OThe recent study done by Meier and O’’Toole (2006) shows Toole (2006) shows that bureaucratic values be far more important in explaining that bureaucratic values be far more important in explaining bureaucratic output and outcomes than political factors. This bureaucratic output and outcomes than political factors. This does not demonstrated and should not be taken to mean that does not demonstrated and should not be taken to mean that external political control is unimportant, but is does shows thaexternal political control is unimportant, but is does shows that t the serious attention to the values of bureaucrats is the most the serious attention to the values of bureaucrats is the most important. important.


Respectable Community Leaders

Improve services to the public through a Professional, competency and honest action

Give a high priority to honesty, responsibilityIntegrity and bravery in daily activities

A proper and well-panned human resources development

Moral IssueMoral IssueHuman Resource Development for Government Official

1. Recruitment Process• Job analysis and requirement analysis before the recruitment

• The recruitment process should be open and fair

Start

2. Education and Training• Covers physical and mental training and should be given regularly

• Provide scholarship to get higher education, in the country and overseas

End

Recruitment

Retirement Increase quality of government employees

ConclusionConclusion

Since 1980Since 1980’’s many countries have devoted major efforts to promote s many countries have devoted major efforts to promote administrative reform. The need for a good governance appears inadministrative reform. The need for a good governance appears in all all countries.countries.In Indonesia after the fall of the New Order government, politicIn Indonesia after the fall of the New Order government, political al movement emerged and appealed for reform in all aspect, includinmovement emerged and appealed for reform in all aspect, including public g public administration.administration.However, to have a high quality of public service, as the societHowever, to have a high quality of public service, as the societyy’’s hope, is s hope, is still a far reaching goal realizing the direction of reform whicstill a far reaching goal realizing the direction of reform which is processed h is processed up to the present time. up to the present time. As in any reforms, the need for a strong and very determined leaAs in any reforms, the need for a strong and very determined leadership is dership is the crucial factor; it leaves a big question for Indonesia. the crucial factor; it leaves a big question for Indonesia. While a good governance become the main pillar for overcome compWhile a good governance become the main pillar for overcome competition etition in the global world, a reform in civil service in Indonesia in oin the global world, a reform in civil service in Indonesia in order to have a rder to have a clean and efficient bureaucracy, is a must. clean and efficient bureaucracy, is a must. Nobody can predict when will be Nobody can predict when will be ““the honest, productive, creative, the honest, productive, creative, responsible and professional civil servantsresponsible and professional civil servants”” appeared. appeared.

Thank youThank you

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CIVIL SERVICE REFORM IN INDONESIA - United Nationsunpan1.un.org/intradoc/groups/public/documents/... · CIVIL SERVICE REFORM IN INDONESIA ... Criteria for Output Outcome Process