What is AIPEG?

The Governments of Australia (GOA) and Indonesia (GOI) have worked collaboratively in the area of economic governance since the major financial crisis of the late 1990s. After more than 10 years of cooperation a great deal has been learned and achieved and there is now a mutual commitment to continue for the next six years under the Australia Indonesia Partnership for Economic Governance (AIPEG).

AIPEG is a partnership between GOA (through DFAT-Australian Aid) and GOI. AIPEG will support the GOI’s aims to improve the quality of economic management, and through this contribute to broad based growth and poverty reduction.

AIPEG will assist the GOI in achieving this Goal by strengthening the Government’s capability for Policy Formulation, Coordination and Implementation in areas affecting the national budget and macroeconomic performance.

Focus

AIPEG undertakes collaborative activities in institutional strengthening and provides technical advice in several areas including:

    * Tax Administration Reform
    * Financial System Stability
    * Trade
    * Public Financial Management

How is it resourced?

AIPEG is funded by the GOA. However the GOI will meet the cost of GOI officials attending meetings, workshops and training activities in Indonesia. The AIPEG team is well resourced to provide assistance at the strategic level. Where specific technical support is required, additional advisers may be mobilized.

Who are our partners?

AIPEG presently works with the Coordinating Ministry for Economic Affairs, the Ministry of Trade, and the Ministry of Finance (Bapepam-LK and Directorate General of Taxation).

How does AIPEG operate?

AIPEG supports Partner Agencies to meet their national priorities through delivery of technical assistance and capacity building support on a flexible basis. This support must also meet the overarching goals of AIPEG.

Examples of support include the placement of short and long term international and Indonesian specialists to work alongside officials in Partner Agencies on specific tasks, a variety of in house and external professional development programs, joint research, and the piloting of new systems.

How are Agency Activities Selected for Assistance?

AIPEG needs to remain strategic, flexible and responsive. AIPEG principally supports activities that link to the Government’s Own Priorities. This link is a key factor in building sustainable and long lasting outcomes.

To be approved, support must directly contribute to the Partner Agencies’ own reform plans and ultimately National Reform Objectives.

AIPEG provides prompt, targeted assistance.

The support is designed jointly with Partner Agency staff. Implementation of activities is a collaborative process. Agency staff are expected to work with AIPEG and its consultants in the delivery, monitoring and evaluation of their work, and determine if any follow on actions are required. Through this approach Partner Agency capacity is developed and systemic improvements are achieved.

AIPEG support to Partner Agencies is planned in advance. A yearly workplan, mutually agreed between the Agency and AIPEG, is presented to the AIPEG Advisory Board for approval. This process is repeated every 6 months, with an updated workplan presented each time.

Support should follow a programmatic approach where a number of small scale activities build on each other to achieve a broad Partner Agency Goal. Ideally AIPEG support will contribute to a Partner Agency reform program, partially funded by the Agency.


GOAL &  OBJECTIVE

Goal

The goal for the AIPEG Facility is to improve the quality of the Government of Indonesia’s economic management and through this contribute to broad based growth and poverty reduction.

Objective

The objective of the AIPEG Facility is to strengthen governmental capability for policy formulation, coordination and implementation in areas affecting the national budget and macroeconomic performance.

The Facility operates through a series of Sub-Facilities providing support in selected areas of economic management. Each Sub-Facility has its own goal and objective, and contributes to the facility wide objective through the provision of high quality analytical and strategic advice that is useful to Government of Indonesia (GoI) policy makers. Particular attention is given to harmonize and work strategically with other sources of assistance and advice, including the Government Partnerships Fund and other programs under the Australia Indonesia Partnership. The Sub-Facilities are engaged with key agencies to impact positively on budget and macroeconomic policy settings and, where appropriate, deliver effective support to build domestic capacity for policy formulation, coordination and implementation in areas of strategic importance.



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