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REPUBLIC OF INDONESIA MINISTRY OF NATIONAL DEVELOPMENT PLANNING/ NATIONAL DEVELOPMENT PLANNING AGENCY (BAPPENAS)

WELCOME REMARKS FOR ASIA AND THE PACIFIC CONFERENCE ON ELECTRONIC GOVERNMENT PROCUREMENT (e-GP)

FROM:

VICE MINISTER OF NATIONAL DEVELOPMENT PLANNING / VICE CHAIRMAN OF NATIONAL DEVELOPMENT PLANNING AGENCY (BAPPENAS)

DENPASAR, 22 NOVEMBER 2011

REPUBLIC OF INDONESIA MINISTRY OF NATIONAL DEVELOPMENT PLANNING/ NATIONAL DEVELOPMENT PLANNING AGENCY (BAPPENAS)

Bpk. Made Mangku Pastika, Governor of Bali; Bpk. Ahmad Heryawan, Governor of West Java; Bpk. Agus Rahardjo, Chairman of National Public Procurement Agency; Mr. Steve Groff, Vice President of Asian Development Bank; Representatives and Colleagues from friendly nations of the Asia and the Pacific region; Representatives and Colleagues from NPPA, Ministries, Provinces and Asian Development Bank; Ladies and Gentlemen,

Good Morning, Assalamualaikum Warahmatullahi Wabarakatuh

On behalf of the Government of Indonesia, I am delighted to extend our warmest welcome to all of you to the Asia and the Pacific Conference on Electronic Government Procurement.

I am truly pleased to be surrounded by procurement specialists and policymakers from more than 20 (twenty) countries in Asia and the Pacific region along with civil society organizations and development partners, whose
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concern and full commitment are to improve and reform their respective countries procurement system, particularly on the issue of electronic government procurement.

Let me convey my appreciation to the National Public Procurement Agency and Asian Development Bank for initiating, managing and hosting together this esteemed conference in order to move towards a new era of e-GP.

Since this conference brought all of us together, I do hope that the conference is yielding to constructive wisdom, in-depth insight of electronic procurement issues and agree on a robust action plan in moving the e-GP forward. I do believe and strongly hope that the conference would motivate all of us to continue and generate better cooperation among our countries and ADB and other development partners with our countries, regardless of all the differences we have.

Distinguished guests, As you may be aware, procurement plays various important roles in national development. Procurement is an important element for combating corruption, and for Indonesia, the procurement is one of important elements of bureaucratic reform as well. Furthermore, a credible procurement process would be able to generate budget savings. Simultaneously, procurement system creates more conducive national business environment that is prepared and geared to participate and compete internationally. I believe that in the end, a robust procurement system will lead Indonesia to greater prosperity through planned, purposeful, sustainable, and efficient public spending that benefits the entire nation.

In the frame of increasing transparency, efficiency, and effectiveness in the public procurement, the Government of Indonesia has, since the year 2005 developed an electronic government procurement system. The development of this e-GP system is not only supported by public procurement related programs and activities, however the government has endeavored to mainstream the policy direction of government programs in other sectors such as communications and informatics sectors.

Distinguished participants, The growth of the Indonesian telecommunications infrastructure development in the past five years has been impressive. The access to telecommunications network and services has grown exponentially, from 60 million subscribers in the year 2006 to over 198 million subscribers in the year 2009. By the year 2010 the number of those who have access to the telecommunications network and services has reached 251 million. However, it is worth noting that the distribution and spread of the telecommunications access is not yet fully equal. Most of the telecommunications access and subscription are geographically located at the western regions of Indonesia. The level of penetration in the year 2006 is at 35.4 percent and by the year 2010 the level of penetration has grown more than three folds to up to 107.5 percent, more than the number of the whole population. By the year 2010, the cellular penetration in Indonesia reached 91 percent, which exceeds the global average which has only reached 78 percent. However from another perspective, the level of national broadband penetration is still very limited, which is between two to five percent and is below the world average that has reached 7.6 percent for fixed (wired) broadband and twelve percent for mobile broadband
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The government is very much aware that the development of the broadband infrastructure is a very important and pressing issue. Broadband, which is the information and communication infrastructure of the future, becomes one of the supporting pillars to economic development and national competitiveness. This premise has been confirmed from various international studies which demonstrate that an increase in a broadband penetration of 10 percent would spark an added economic growth of 1.38 percent in developing nations, including Indonesia. Presently, it is a fact that national broadband services is still lagging behind. As a consequence, the Government of Indonesia in its Medium Term Development Plan for 2010-2014, stipulates three targets related to broadband services that have to be achieved by the end of 2014. This government agenda involves an increase in broadband services penetration, the availability of a fiber optic backbone network that interconnects all major islands; and an increase in the numbers of regency capitals and other cities that have access to the broadband network access. As formulated through the Medium Term Development Plan 2010-2014, the development of communications and informatics for the year 2010-2014 is directed at strengthening the virtual domestic connectivity and becomes one of the pillars that enhance national competitiveness. Therefore, through the development of broadband infrastructure, Indonesia hopes to accelerate itself to become locally integrated and globally connected. Distinguished guests, My view is that, with the alignment and synergy of government directives and programs in the communication and informatics sector with public procurement policy, this would have far-reaching consequences in reducing hurdles for the implementation of the e-GP in the future.
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At this juncture, as was reported by the NPPA and as we have also noted through the keynote speech delivered by the Chairman of the NPPA, in the near future the e-GP system will be nationally integrated. The procedures, data, and system would sequentially form a single market. For us, this single market not only benefits public finances through an increase in effectiveness and efficiency of public financial management; however, it serves for the greater national interest. With the e-GP, this single market is also a pullfactor/means towards solidifying the unitary Republic of Indonesia.

Gradually of course, we would conceive on how our system would be connected internationally, given that it does not impinge on the sovereignty of a nation.

Indeed the issue of e-GP implementation could not only be seen through the aspect of communications and informatics infrastructure readiness per se. There are many other concerns that may need all of our attention, such as the readiness of human resources, entrepreneurs, and the society at large to this paradigm shift.

As I have come to understand through NPPAs report, the development and adoption of electronic procurement system in our country began in 2005. It was not easy to start with something that we barely know. We spent the next 2 (two) or 3 (three) years in learning, developing, testing, and evaluating the system to tailor to national needs and circumstances.

In 2008, we implemented the system in 5 (five) selected provincial government, which were West Java, East Java, West Sumatera, Central

Kalimantan and Gorontalo. Ever since, gradually, the system is applied to more government institutions in central and provincial or district level.

To implement e-procurement system smoothly, we also prepared national campaign, conducting trainings, and provide help-desk to give prompt assistance and response to procurement team in one procuring entity.

In the last 2 (two) years, the establishment of e-procurement services or LPSE achieved more than 100 (hundred) services in 2010, and grow up close to 300 (three hundred) by the end of 2011. We do expect that in next year, the eprocurement services are able to cover nation wide.

The Government is pleased given that those services are performed well and generate significant savings for national budget.

Ladies and gentlemen, distinguished guests, According to our experiences, the success in implementing e-GP is not only dependent on the public procurement policy directive alone. As we all know, procurement matter is a cross-cutting issue and constantly interfaces with various domestic or national affairs. Therefore, the synergy between policy and strategic direction as well as the regulation of other sectors that are interrelated would also determine.

I finally wish each and every one of you a great success in your deliberation at this respectable workshop. I hope that all of you will have a pleasant stay in Bali and receive warm hospitality by us. My hopes and wishes for great accomplishments for your work.

Thank you very much. Wassalamualaikum Warahmatullahi Wabarakatuh

Jakarta, 22 November 2011

Lukita Dinarsyah Tuwo Vice Minister of National Development Planning/ Chairman of National Development Planning Agency (BAPPENAS).