MCC worked over 18 months with the GOI to create the implementing structure of the compact prior to entry-into-force in April 2013. MCA-Indonesia was established as a national trust fund, a new and innovative model for development funding in Indonesia, which has allowed the government to explore the possibility of taking a greater role in managing both donor assistance and its own development funding. One of MCA-Indonesia’s greatest attributes was that despite its status as a government institution, it was permitted to channel donor and central government funding to development projects at the community level. MCA-Indonesia’s design included a public and private sector Board of Trustees, the first of its kind in Indonesia. After the establishment of MCA-Indonesia, the GOI created two more trust funds based on this model, most notably the Indonesia Climate Change Trust Fund, which has made grants to small projects around the country.
This spirit of experimentation and pushing the limits of what the GOI was able to accomplish on its own by way of policy reform in these sectors was advanced within the design of each project and played out during compact implementation in unexpected ways. For example, the Green Prosperity peatland portfolio included several initiatives to build the capacity of the GOI’s newly-established Peatland Restoration Agency. The flexible design and focus of the GP Facility enabled MCA-Indonesia to support the accomplishment of GP objectives as well as supporting a national priority. Another example of how the GP Facility enabled policy changes to quickly be operationalized and brought to scale took place when a new Ministry of Forestry regulation was issued in December 2016 that streamlined the application process for social forestry licenses, changing the time needed from a minimum of two years to as little as three months. In 2017, MCA-Indonesia supported projects assisting dozens of community groups to secure such communal forest rights for over 139,000 hectares.
As described above, the most notable example of a project being implemented to a much larger scale than originally contemplated was the Procurement Modernization Project’s expansion from $50 million to $75 million. For the recruitment of the initial pilot PSUs, MCA-Indonesia took several months to convince local mayors and governors that the project would be worth their time and effort. By the beginning of Phase II, when it came time to select the additional pilots, PSUs from around the country were competing to participate in the project, each trying to outdo the other’s declarations of transparency and commitment to better procurement results. By the conclusion of the project, non-pilot PSUs received training from some of the first PSUs selected, some of which aimed to be accredited as Centers of Excellence.
The graduates of the entire organizational and procurement skills training program, consisting of 30 formal training courses and substantial mentoring, took the initiative to establish their own network for procurement professionals to learn from and support one another. The pilot PSUs are also already serving as mentors and champions to other non-pilot PSUs. As of December 2016, the Yogyakarta city government PSU was mentoring seven non-pilot PSUs and the Special Capital Region of Jakarta was mentoring other PSUs in setting up Framework Agreements. MCA-Indonesia’s innovative Indonesian Procurement Maturity Model was also adopted by LKPP for use in more than 600 other PSUs across the country.