Managing Reform in IndonesiaFrom Tsunami Recovery to UKP4

Decision Science in Practice

Kuntoro Mangkusubroto Public Lecture

Jakarta, 6th September 2013

6th Sept 2013 2

The Story of My LifeThe Story of My LifeThe Story of My LifeThe Story of My Life(Lifelong Love Affair with Decision Science)(Lifelong Love Affair with Decision Science)(Lifelong Love Affair with Decision Science)(Lifelong Love Affair with Decision Science)

6th Sept 2013 3

DECISION SCIENCE IS ABOUT

Choices with Choices with Choices with Choices with consequencesconsequencesconsequencesconsequences

ProcedureProcedureProcedureProcedure to pick the to pick the to pick the to pick the “best” “best” “best” “best” choicechoicechoicechoice

DECISION AND DELIVERY

Deliveryproduce real results

A set of Right DecisionsReal Results

6th Sept 2013 4

THE CHOICES

6th Sept 2013 5

Question

Event 1

Probability 1

Strategy 1

Strategy n

Event j

Probability j

Outcome

1

Outcome

j

Maximum

Expected Utility

THE ENVIRONMENT

6th Sept 2013 6

With

Opponent

Without

Opponent

(Competitive)

(Nature)

THE ENVIRONMENT

6th Sept 2013 7

With

Opponent(Competitive)

Friendly /

Cooperative

Negotiation(saddle point)

Hostile/non-cooperative(zero sum)

BB

THE ENVIRONMENT

6th Sept 2013 8

GAME!GAME!GAME!GAME!

A

VS

Strat. 1 Strat. 2 Strat. 3

Strat. 1

Strat. 2

Strat. 3

A

B

THE ENVIRONMENT

6th Sept 2013 9

Common Objective(Coordination/

Cooperative)

Individual Objectives(Multi games)

Groups Objectives(Multi games)

THE ENVIRONMENT

6th Sept 2013 10

Strategy 1Strategy 1Strategy 1Strategy 1 StrategyStrategyStrategyStrategy 2222

Strategy Strategy Strategy Strategy 1111

Strategy Strategy Strategy Strategy 2222

IS THERE ANY SOLUTION?IS THERE ANY SOLUTION?IS THERE ANY SOLUTION?IS THERE ANY SOLUTION?

A

B

PRACTICES

6th Sept 2013 11

Messy Messy Messy Messy (complex, (complex, (complex, (complex, chaotic, infinite,…)chaotic, infinite,…)chaotic, infinite,…)chaotic, infinite,…)

Live with it!Live with it!Live with it!Live with it!(the “best” choice)(the “best” choice)(the “best” choice)(the “best” choice)

REAL WORLD DECISION MAKING

6th Sept 2013 12

Decision Decision Decision Decision MakerMakerMakerMaker Analyst/SupportAnalyst/SupportAnalyst/SupportAnalyst/Support

information

feedback

Complex

Dynamic

NegotiationsNegotiationsNegotiationsNegotiations

Infinite

Information

Information

6th Sept 2013 13

IT ALL STARTED WITH…

25 years long conflict

Aceh

6th Sept 2013 14

25 YEARS OF CONFLICT

6th Sept 2013 15

SYNCHRONIZING OBJECTIVE

SIGNALS

DAMAGE ALONG ACEH-NIAS WAS

UNPRECEDENTED

6th Sept 2013 16

172,000 dead & missing

550,000 in temporary

shelters/tents

800 km

x 1-6 km

destroyed!

STRONG INTERNATIONAL SUPPORT TURNED

INTO EXTREME LOGISTIC MANAGEMENT

6th Sept 2013 17

900International

Organizations

7.2Billion USD

8,000Volunteers

40Countries

9Mother

Ships

14War Ships

Biggest military operation in the last 50 years,

for non-military purpose

PLANNING FALLS BEHIND CHANGES

6th Sept 2013 18

• Build back, better!

• Local government capacity building

• Democratic environment

• Mandate/entrustment

Objective 2Objective 2Objective 2Objective 2Objective 1Objective 1Objective 1Objective 1

NEGOTIATING UNDER SOVEREIGN INFLUENCETHE CASE OF IPP IN 2000

6th Sept 2013 19

Geothermal Non- geothermal

Darajat

4.2 ¢/kwhPaiton

6.9 ¢/kwh

• Process: out of court

• Find Anchor

EXTREME COMPLEXITY DECISION MAKING

6th Sept 2013 20

PoliticalEnvironmentSocial structure

and dynamics

“Problem

Definition”

Importance of

process

Actors and

Interplays

SOCIALLY INCLUSIVE DECISION MAKINGCOMMUNITY PARTICIPATION FOR VILLAGE PLANNING

6th Sept 2013 21

Bottom-up

Planning

COMMUNITIES DECIDE IF THEIR AREA WILL BE REBUILT

WITH NEW LAND CONSOLIDATION OR KEPT AS IT WAS

6th Sept 2013 22

Houses built 6 months later, but

eventually the property market value

reaches 2-3 times higher

23

BREAKTHROUGH IN FLOW OF FUNDS TO

FACILITATE EASE OF EXECUTION

Govt. of

Indonesia

36%NGO

33%

Bilateral &

Multilateral

donor

Total commitmentUSD 6.7 Billion

Examples

Malahayati

seaport

Netherlands

Calang-

Meulaboh Road

Japan

Hospital in

Calang

Spain

Meulaboh

Seaport

Singapore

31%

6th Sept 2013

GROUPS OBJECTIVES IN A HOSTILE ENVIRONMENT:

BUILDING TRUST THROUGH ACCOUNTABILITYFROM THE CONVENTIONAL ASSET INVENTORY SYSTEM...…TO A HIGHLY ACCURATE…

GPS

coordinate

6th Sept 2013 24

GEOGRAPHIC

INFORMATION SYSTEM

THE CHALLENGES…

6th Sept 2013 25

THE RESULTS…

6th Sept 2013 26

A DEVELOPMENT PACE NEVER SEEN BEFORE IN

INDONESIAN HISTORY

6th Sept 2013 27

AMONG THE CHALLENGES…

6th Sept 2013 28

How to fight for adequate authorities?

Master Plan VS bottom up approach

Government ACTION VS Government ORCHESTRATION

Accelerating through FEEDBACK?

Coordination—NEGOTIATION ?

KEY LESSONS LEARNED FROM POST DISASTER

RECONSTRUCTION

6th Sept 2013 29

NEVER expect perfect results

Scrutinized FLEXIBILITY

No TRANSPARENCY no TRUST

INCLUSION is better planning

Accelerated

execution

MINIMIZED

feedback time=~

THE JOURNEY BACK TO JAKARTA

PRESIDENT’S DELIVERY UNIT

for Development Monitoring

and Oversight

(PDU or UKP4)

6th Sept 2013 30

IN 2009, THE PRESIDENT OF INDONESIA ESTABLISHED

THE FIRST DELIVERY UNIT OF THE WORLD’S BIGGEST

ARCHIPELAGO

“UKP4 is my

ears, eyes and

hands”

6th Sept 2013 31

CONSISTENCY AND SYNCHRONIZATION IN DELIVERING

THE VISION OF THE PRESIDENT

SYNCHRONISATION

CO

NS

IST

EN

CY

UKP4, Planning

Agency & MoF

ACTION PLAN 400+ National Priority Action Plans Annualy

6th Sept 2013 32

CONSISTENCY AND SYNCHRONIZATION IN DELIVERING

THE VISION OF THE PRESIDENT

6th Sept 2013 33

SYNCHRONISATION

CO

NS

IST

EN

CY

UKP4, Planning

Agency & MoF

ACTION PLAN 400+ National Priority Action Plans Annualy

Mission

Objectives

Criteria

=~

Targets

NATIONAL PRIORITIES OF THE REPUBLIC

NATIONAL

PRIORITIES

(2010 – 14)

Bureaucracy

Reform &

Governance

1Education

2Public Health

3

Poverty

Eradication

4Food

Security

5Infrastructure

6

Investment

and Business

Climate

7Energy

8 Environment

and Disaster

Management

9

Disadvantaged,

Border, Outermost

and Post-Conflict

Regions

10 Culture,

Creativity and

Technological

Innovation

11

Others

+

6th Sept 2013 34

LEADERSHIP STYLE AND BEHAVIOR

6th Sept 2013 35

Ministers

The Parliamentarians

Regional Leaders

The Leaders

ASSUMPTION: COMMON OBJECTIVE

6th Sept 2013 36

6th Sept 2013 37

THE POLITICS IN THE GOVERNMENT

Coordinating

Minister 1

Coordinating

Minister 2

Coordinating

Minister 3

Minister 1 Minister 2 Minister 3 Minister X

Governor 1 Governor XEchelon 1

Echelon 2

Echelon 1

Echelon 2

Echelon 1

Echelon 2Head of

District 1Mayor

Head of

District 2

Good

Hard

Difficult

Governor 2

Nearly

impossible

6th Sept 2013 38

6th Sept 2013 39

IN REALITY…

6th Sept 2013 40

Year 1 Year 2 Year 3 Year 4 Year 5

GEOSPATIAL INFORMATION SYSTEM TO ENSURE FIELD AND

REPORTING CONSISTENCY

(P100H-P13A1)

Pamsimas Kupang 10.17385 LS,

123.9773 BT

PLTU Kupang NTT

10.23872 LS, 123.49213 BT

(N8P43A1)

Pasar Tradisional Cimanggis

6,50538 LS 106,77531 BT

(P100H-P23A3)

Double Track Rel KA Serpong Maja

6 20’27,88’’ LS, 106 36’06,62’’ BT

(N6P29A3)

Pemeliharaan Jalan di Banda Aceh

Lambaro (road to the airport)

N6P28A1

PPS Lampulo Banda Aceh

5.586 LU, 95.318 BT

P100H-P13A10

Reaksi Cepat Bencana Malang

07°55.3509’ LS, 112°42.4924’ BT

(P100H-P44A2)

Jalan Tol Porong – Sidoarjo

07°30.362’ LS, 112°41.960’ BT

Jalan Tol Lintas Jawa

PLTU Pacitan

8 15’30’’ LS, 111 22’30’’ BT

10.000 MW

6th Sept 2013 41

ASSURING SYNCHRONIZATION AND CONSISTENCY

ACTION PLAN

MINISTRY/

AGENCY IN

CHARGE (MIC)

RELATED

AGENCY

CRITERIA FOR

SUCCESS

MEASUREMENT

OF SUCCESS

MEASUREMENT OF SUCCESS

D30, D50, D75, AND D100

%

ACHIEVE-

MENT

EXPLANA-

TION

1 2 3 4 5 6 7 8

N8P73: Construction of transportation infrastructure network and vehicle provision of intermodal and inter-islands transportation

Construction of

Floating Storage and

Receiving Unit (FSRU)

in North Sumatera,

West Java and East

Java

Ministry of

Energy and

Mining

Resources

Ministry of

Transport

West Java

Provincial

Government

Preparation

activities for

the

construction

of FSRT in

North

Sumatera,

West Java and

East Java

TARGET:

Execution of

monitoring

work for FSRU

construction

preparation in

North

Sumatera, West

Java and East

Java

TARGET B04: Establishment of

construction preparation monitoring

unit

B04:

100%

Contract

signed on

April 14,

2010

TARGET B06: Finalized SOP for FSRU

construction preparation monitoring

B06:

114%

22.82%

TARGET B08: Verification and

evaluation of FSRTU construction

barriers

B08: XX%

TARGET B10: Solution options for

identified barriers

B10: XX%

TARGET B12: Construction

preparation monitoring report

finalization

B12: XX%Realistic and measurable bi-monthly

targets are formatted together with

the MIC

Derives from Presidential

Directive 1/2010

Self

reported by

the MIC

MIC coordinates

other parties in

achieving the

target.

6th Sept 2013 42

DEBOTTLENECKING FLOATING STORAGE RECEIVING UNIT

(FSRU) JAKARTA

6th Sept 2013 43

Location:

Muara Karang, Jakarta Utara

Coordinate:

6.108559, 106.781239

Site Monitoring : 13th Oct 2010

Status:

• Fixed location to supply Muara

Karang Power Plant

• Ministry of Transport can not

issue Location Permit due to

hampered reccomendation

from the Governor of Jakarta

• Reclamation Mega Project in

North Jakarta hampered the

FSRU Project as well

PROBLEM

COMPLICATION IN COORDINATION

6th Sept 2013 44

Coord. Min

Economic Aff.

Coord. Min

People’s Welfare

Coord. Min

Politics, Legal

and Security Aff.

Min. of

Transport

Min. of Energy

and Mineral

Resources

Min. of

Environment

Min. of

Internal Affairs

Governor of

DKI Jakarta

No Permit

without EIA

(AMDAL)

No AMDAL without

Gov. RecommendationConflicting with

Reclamation

plan!!

No FSRU!

Jakarta will lose

60% power Escalation!Escalation!Escalation!Escalation!

ESCALATION LEADING TO EXECUTIVE DECISION

6th Sept 2013 45

“…I want the FSRU to

be finished in 2012…”

6th Sept 2013 46

DEBOTTLENECKING FLOATING STORAGE RECEIVING UNIT

(FSRU) JAKARTA

Issues identified in Aug 2010

FSRU inaugurated in Dec 2012

RESULTS FOR THE NATION

6th Sept 2013 47

• Full on-stream 1 September 2013

(260 BBTUD)

• Fuel saving worth 2.4 million USD/day

MANY DOWN, MORE TO GO

• Donggi Senoro Gas Field

• Kalibaru New Port

• MRT Jakarta

• School Operational Assistance fund disbursement

• Sarulla Geothermal Power Plant

• Soekarno-Hatta Airport Expansion

• Certification of Fishing Ships “INKA MINA”

• National Strategy of Corruption Prevention and Eradication

• Public housing (RUSUNAWA) resettlement

• Implementing regulation for new Land Acquisition Law

• Railway governance regulation (IMO-TAC)

• National Agency of REDD+

• ONE MAP……and many more6th Sept 2013 48

REAL WORLD DECISION MAKING

6th Sept 2013 49

Decision Decision Decision Decision MakerMakerMakerMaker Analyst/SupportAnalyst/SupportAnalyst/SupportAnalyst/Support

information

feedback

Complex

Dynamic

NegotiationsNegotiationsNegotiationsNegotiations

Simple

Information

Information

6th Sept 2013 50

DECISION SUPPORT SYSTEM

AT THE HIGHEST LEVEL

• Serving the Decision Maker

• His choice and consequences

• Provide the “best” options

Ministries

/Regions

Tactical Rooms

The President

International

Public

Others

Officials

Country

Leaders

Other leadersVideo/Audio

Conference

Ministries

/Regions

International

Public

Others

ExecutiveRoom

Inboundinfo center

Outboundcommunication

center

IT Center /support room

Ministries

/Regions

Ministries

/Regions

Tactical Rooms

The President

InternationalInternational

PublicPublic

OthersOthers

Officials

Country

Leaders

Other leadersVideo/Audio

Conference

Ministries

/Regions

Ministries

/Regions

InternationalInternational

PublicPublic

OthersOthers

ExecutiveRoom

Inboundinfo center

Outboundcommunication

center

IT Center /support room

6th Sept 2013 51

Thank youThank youThank youThank you