From Dependence towards Effectiveness:
The aid effectiveness debate emerged in late 1990s out of the rising fear that aid was not making any difference, and instead generating dependency relation-ships between donor and recipient countries. With the signing of a Paris Decla-ration in 2005 by over a hundred donor agencies and recipient governments, the debate generated an agenda which seeks to change the nature of contem-porary aid relationships by adopting ownership as the key pillar of a new aid paradigm. As a recipient of foreign aid and a signatory to the Paris Declaration 2005, Indonesia sets to commit to the principles of the Declaration and established a national action plan for aid effectiveness through the signing of the Jakarta Commitment in early 2008. The Commitment aims to translate global com-mitments under the Paris Declaration to the national level in favor of country ownership, setting the means to improve effectiveness of external loans and grants within the time range of 2009-2014. This research aims to find out how likely the Jakarta Commitment is to enhance Indonesia’s ownership over foreign aid and in general improve aid effectiveness. The question is derived from the existing skepticism and debate on whether Paris Declaration on Aid Effectiveness can actually deliver real change. At the same time, while Indonesia committed itself to the Declaration and provided its roadmap for aid effectiveness, it is claiming to receive foreign aid of less than 5% of its national budget annually. After providing introduction of the research design with a background on aid effectiveness debate and aid in Indonesia, research question formulation and methodology, this research works on its objective in the following order: First, it identifies the major problems relating to aid effectiveness in Indonesia, which underline the importance of the Jakarta Commitment as a roadmap tai-lored to Indonesia’s case for its commitment in the Paris Declaration. Second, it addresses the extent to which the implementation of the Jakarta Commitment signifies to Indonesia’s ownership over foreign aid. At this part, this research looks into four dimensions which serve as indicators to assess the extent of country ownership as suggested by Lopes and Theisohn (2003: 30), and later elaborates the relation between Indonesia’s PRSP and the idea of ownership. Third, it finds out how likely the Jakarta Commitment is to meet the goals set in the Paris Declaration. This research concludes that the Jakarta Commitment has not fully ad-dressed the four elements of ownership, but admits that Indonesia is overall making progress although still far from meeting Paris Declaration targets. However, this research stresses that the commitments and strategies under Par-is Declaration should not be taken for granted. This research will also point out the importance of gaining recipient leadership as an indispensable element of ownership.
|Keywords||Foreign aid, Aid Effectiveness, Development cooperation, Indonesia, Ownership, Poverty Reduction, Development policy|
|Thesis Advisor||Hout, Wil|
|Series||International Political Economy and Development (IPED)|
Yuwono, Felicia. (2010, December 17). From Dependence towards Effectiveness:. International Political Economy and Development (IPED). Retrieved from http://hdl.handle.net/2105/8623