PSD Strategy Implementation

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1 PSD Strategy Implementation - A Case of Seaport Management in Indonesia Presentation by Dr. Raldi H. Koestoer Research Professor, Indonesian Institute of Sciences/LIPI 19 April 2005 The views expressed in this paper are the views of the author, and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors or the governments they represent. ADB makes no representation concerning and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented.

2 Key Messages Effective implementation of reforms remains a key challenge in PSD process Regular performance reports reinforce accountability for achieving targeted results Continual analysis of performance gaps provides basis for improvement

3 Background Global investment requires Indonesia to compete in the international markets Improving customs and overall port clearance efficiency was infrastructure strategy Four major action plans chosen to achieve the priority solutions: Improve customs processing quality & speed Set standards of conduct Rationalize & streamline regulations Install an electronic processing capacity

4 Bottlenecks & Solutions Bottleneck Solution Custom services poor & slow Regularize Performance Lack of standards & guidance Code of Conduct Limited ICT systems Install EDI

5 Institutional Arrangement Stakeholder Community CMEA Bank Indonesia Policy I : Decision making II : Operational Legend DoC DoF DoL Banks TDG etc DGs I II DoC - Dep of Com n & Trans DoF - Dep of Finance CDG Local Banks DoL - Dep of Labor TDG - Tax Director General CDG - Customs Dir. Gen l Flow Coordination Decision Ports (sea & air) Report Request Users

6 Maintaining Accountability Report Review Activity Measurement Supervision Unit CDG-DoF, DoF, Banks, BI Business Associations, Chambers, DoF & CMEA Independent unit DoF, CMEA CMEA: Coordinating Ministry for Economic Affairs CDG-DoF: Customs Dir. General, Dep. of Finance BI: Bank Indonesia

7 Measuring Performance Solution P C T Improve Work Performance U C Q2 Standards & Guidance H A Q1 EDI (Electronic Document Interchange) M B Q4 Priority : Urgent, High, Medium & Low Completion : A=Finished, B=Pending, C=Needs revision Target date : Q1, Q2, Q3, Q4

8 Indicator Sample Cargo processing rate - (tons/ hour) Time delay reduced - (Hours) Customer satisfaction - (No. of complaints) Clearing cost to users - (US $/ ton)

9 Gap Analysis (levels achieved) Indicator One-Gate System Streamlined regulations ready Standards & guidance Customs process (files/ day) Time delay (Hours) ICT upgrade No. of complaints (#/month) Prior - - limited 0.3 >32 - >50 Current 50% 35% 75% Rev % 25-40

10 Gap Analysis (time elapsed) Indicator progress in allotted time Coordination arrangement Streamline regulations Standards & guidance Port handling charges Customs process Reporting procedures ICT upgrade HRD - training procedure Time spent 30% of allocated time elapsed: 75% of allocated time elapsed:

11 Evaluation of Performance Gaps Some steps in the strategy have gone well: Stakeholder coordination within implementation Some progress on one-gate service Set standards and updated guidance Others need improvement: Faster customs process & eliminate trivial steps Regular reports should be maintained Online information updates

12 Results of the Approach Approach to implementation workable, but needs improvement in: Clearer guidelines and coordination Better stakeholder consultation Improved human resource skills Measurement needed at every process stage

13 Conclusion Monitoring systems can not improve performance unless applied rigorously Reports timely and in adequate detail Thorough analysis & corrective action Improving HR capacity (e.g. skills and management ability) offers the greatest improvement in implementation

14 For More Information Dr. Raldi H. Koestoer RETA website: RETA website: