FINAL REPORT
Evaluation of Partnership 
for Economic Growth (PEG) Contract
Contract No: AEP-I–00-00-00025-00
Delivery Order No: 01
Submitted to:
USAID/Jakarta
Submitted by:
The Mitchell Group, Inc.
1816 11th Street, NW
Washington, DC 20001
March 29, 2002
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Table of Contents
Acknowledgements.......................................................................................................................i
Acronyms......................................................................................................................................ii
Executive Summary.......................................................................................................................iii
I. Context of Evaluation...............................................................................................................1
II. Evaluation Findings.................................................................................................................2
Efficiency ..........................................................................................................................2
Effectiveness......................................................................................................................4
Relevance ..........................................................................................................................8
Allocation of Resources.....................................................................................................10
Management of the Contract..............................................................................................10
Substantial Involvement of USAID....................................................................................11
Personnel...........................................................................................................................11
Counterpart .......................................................................................................................13
Sustainability .....................................................................................................................13
III. Recommendations..................................................................................................................14
On-going Project ...............................................................................................................14
Future Project....................................................................................................................15
Annexes:
Annex A: PEG Original Scope of Work
Annex B: PEG Scope of Work 2002
Annex C: List of Individuals Contacted and Interviewed
Annex D: Evaluation Scope of Work
Annex E: List of Publications Generated
Annex F: List of PEG Accomplishments in 2001
Annex G: Draft Matrix of SO 1: IR-1
Annex H: Bibliography
i
Acknowledgments
The evaluation team offers its sincere gratitude to the many people who gave of their time and
knowledge in the course of preparing this evaluation. Over 60 people were contacted and
interviewed, many of them more than once. They are far too many to mention by name here, but 
the full list of individuals contacted is presented in the Annex. 
We are especially appreciative of the guidance of Robert Aten, Lanna Lubis, and Raya Soendjoto 
and their colleagues in the Office of Economic Growth at USAID. We are particularly thankful 
to Dr. Aten who gave the evaluation team a free hand, yet was always available to give guidance 
and insight when needed.
Valuable involvement was also provided by the Partnership for Economic Growth technical
assistance team. Each team member graciously contributed their time and input to the evaluation 
process. Team members generously responded to requests for information and in many instances 
volunteered additional data after scheduled interviews and meetings. In particular, Dr. Stu
Callison, Chief of Party, was most gracious with his time and contributions.
Similarly, we were privileged to be able to meet with many senior members of the Government 
of Indonesia who are earnestly involved in PEG activities. Their perspective on events was most 
enlightening and their candid assessment was enriching.
Finally, we were heartened by the comments received from other donor organizations,
stakeholders, and the business community, particularly the American business community that
interact with or benefit from the Partnership for Economic Growth project. 
Everyone we met was more than willing to share time and views with us, and we greatly
appreciate their cooperation and accommodation. We are particularly grateful as our visits
occurred during the holy month of Ramadan and during the worst flooding in Indonesia over the 
past five years.
Harry H. Wheeler, Team Leader
Felix H. Parlindungan
March 2002
ii
List of Acronyms
ADB Asian Development Bank
AMCHAM American Chamber of Commerce Indonesia
ANE Asia and Near East
APEC Asian Pacific Economic Cooperation
BAPPENAS National Development Planning Agency
BI Bank Indonesia
CGI Consultative Group on Indonesia
CIDA Canadian International Development Agency
DEC Development Experience Clearinghouse
DPR Dewan Perwakilan Rakyat (National Assembly)
ECG Office of Economic Growth
EKUIN Office of the Coordinating Minister for Economic Affairs
FSVC Financial Services Volunteer Corps
GOI Government of Indonesia
GTZ Deutsche Gesellschaft Fuer Technische Zusammenarbeit 
IBRA Indonesian Bank Restructuring Agency
ICT Information and Communication Technology
IMF International Monetary Fund
IR Intermediate Result
IRIS Institutional Reform and the Informal Sector
JICA Japan International Cooperation Agency
LBII Louis Berger International Inc.
LOI Letter of Intent
MOF Ministry of Finance
MOIT Ministry of Industry and Trade
NGO Non-Governmental Organization
PEG Partnership for Economic Growth
POSTEL Ministry of Posts and Telecommunications
SIAGA Sustainable Indonesian Growth Alliance
SME Small Medium Enterprise 
SMECDA Small Medium Enterprise and Cooperative Development Agency
SO Strategic Objective
UI University of Indonesia
USAID United States Agency for International Development
USF University of San Francisco
WB World Bank
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Executive Summary
This document summarizes an evaluation of the Partnership for Economic Growth (PEG)
project. PEG is one activity under the U.S. Agency for International Development’s Office of
Economic Growth in support of its Strategic Objective (SO) 1: Foundations Set for Rapid,
Sustainable and Equitable Economic Growth. Designed to assist the Government of Indonesia 
efforts at meaningful and comprehensive economic reform, PEG provides technical assistance to 
various Indonesian ministries and agencies, namely, National Development Planning Agency
(BAPPENAS); the Office of the Coordinating Minister for Economic Affairs (EKUIN); the
Ministry of Finance (MOF); the Ministry of Industry and Trade (MOIT), and Bank of Indonesia 
(BI). In addition, PEG implements a partnership grant program that encourages the development 
of long-term linkages between U.S. institutions and counterpart groups within Indonesia.
Part one of the document defines the context of the evaluation. The PEG project began October 
1998 and is currently scheduled to end October 2002. Recently, USAID announced that it
intends to extend the program to June 2003. As a result of the proposed contract extension as
well as USAID’s desire to provide future upgrades to Indonesia’s growth through strengthened
economic policies and practices, a broad-based assessment of PEG’s activities was required. 
Part two of the document presents the findings of the evaluation team. Consistent with the scope 
of work, the team performed a broad-based assessment by examining relevance, effectiveness,
efficiency, impact and sustainability, among others. By agreement with USAID, the weight of
the evaluation concentrated on the technical assistance component since that component had not 
been previously reviewed.
The final part of the document presents recommendations. Recommendations are presented in
two sets. The first set concerns the on-going project including the proposed extension to June
2003. The second set reflects recommendations for a potential follow on activity. Inherent in
both sets of recommendations, USAID should continuously sort out the niches in which they
intend to specialize. Some of the recommendations include: 
On contract management issues, 
‚ The contractor should improve the timelines and quality of workplans and annual reports
by including analysis, recommendations, and cohesion against the project objectives and
resource allocations. 
‚ USAID should improve its oversight of the contractor’s workplans and annual reports.
On program activity at least through the June 2003 date, it is recommended that AID
‚ Continue support on trade issues superintended by the Ministry of Industry
and Trade. Emphasis should be on internal and regional trade barriers issues 
as well as the issues relating to the WTO. Peg’s current work on the
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educational services sector should serve as a good example for other service
sectors;
‚ Continue support on labor issues and unemployment, either in BAPPENAS or, if
practical, at another ministry such as the Ministry of Labor;
‚ Continue support to the telecommunications sector;
‚ Continue support to Office of the Coordinating Minister for Economic Affairs;
‚ Reduce support to BAPPENAS;
‚ Enhance support to the Bank of Indonesia and the Ministry of Finance. Within BI the
advisors roles should be tightened;
‚ Strengthen support to Dewan Perwakilan Rakyat [National Assembly] (DPR); and
‚ Consider technical advisor support to the Ministry of State Enterprise since this ministry
supervises all private as well as state banks, is in charge of all state enterprises, and
oversees Indonesian Bank Restructuring Agency (IBRA). 
Principal Findings
In spite of the trying conditions in Indonesia over the past few years, the Partnership for
Economic Growth project has admirably achieved its objectives. The PEG team, which includes
technical assistance advisors, Government of Indonesia counterparts, and USAID personnel,
should be commended for its professionalism and dedication. Undeniably, PEG’s support of five 
GOI ministries has contributed appreciably to the GOI embarking upon stronger economic
policies and willingness to implement practices associated with increased openness. Indeed,
PEG’s collaboration with BAPPENAS on fiscal sustainability, investment, and labor issues has
contributed to a more refined macro-economic framework, a better investment climate, and an
acute awareness of the need to balance employment growth with other pressing social demands. 
Similarly, PEG’s recent assistance to the Office of the Coordinating Minister for Economic
Affairs and the Ministry of Finance was instrumental in conveying to the GOI the importance of
freezing terrorist assets and adopting tough money laundering legislation. By the same token, 
PEG’s cooperation with the Ministry of Industry and Trade promotes Indonesia’s
competitiveness by building their capacity to advance market access, foster regional trade
arrangements, and reduce internal and external trade barriers. Finally, PEG’s help on small
business development for the Bank of Indonesia through assistance in regulatory and financial
services as well as earlier project support to improve analytical proficiency in macroeconomic
modeling, inflation analysis and forecasting, and exchange rate analysis resulted in more
effective institutional capacity. 
On the downside is the deficient quality of the contractor’s required annual reports and annual
workplans. In some cases annual reports and annual workplans were not prepared. No workplan 
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has been produced to cover project activities from January 2001 forward, nor has an annual
report been completed for this past year. In other cases, the reports lacked analysis,
recommendations, and cohesion against the project objectives and resource allocation. 
Moreover, with the exception of the 1999 annual report, annual reports were predominantly
compiled from individual team member reports and did not include a comprehensive review of
the overall PEG project, indicate whether the project was collectively meeting its objectives, or
provide historic and prospective financial appraisal of the use of available project resources. The
absence of quality annual reports does a disservice to the PEG team since these reports are the
ones that external reviewers and the public at large first consult to determine whether a project 
has met the wide-ranging and complex objectives mandated under the terms of its contract. 

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I. Context of Evaluation
PEG is one activity under the U.S. Agency for International Development Office of Economic
Growth to support its Strategic Objective 1: Foundations Set for Rapid, Sustainable and
Equitable Economic Growth. Designed to help the Government of Indonesia (GOI) to
implement meaningful and comprehensive economic reform, PEG provides technical assistance
to various Indonesian ministries and agencies, namely, BAPPENAS; the Office of the
Coordinating Minister for Economic Affairs; the Ministry of Finance; the Ministry of Industry
and Trade, and the Bank of Indonesia. In addition, PEG manages a partnership grant program
that encourages the development of long-term linkages between U.S. public and private
institutions and counterpart groups within Indonesia. Activities under these partnerships
disseminate and promote policy reform measures to build stronger civil society institutions.
The PEG program operates through a $22.4 million contract with Nathan/Checchi joint venture
that began in October 1998. The contract was originally designed to serve as an encompassing
mechanism for USAID’s technical assistance support to the GOI following USAID’s decision to 
scale back Indonesian programs (see Annex A). The contract had an initial two-year level of
effort with options for additional years of support. USAID exercised these options as a result of
the Asian economic crisis and the rapidly changing political environment in Indonesia (see
Annex B). The contract was to be completed in October 2002 but USAID recently announced its 
intention to extend the contract through June 2003. Throughout the period of the contract only
one evaluation, focused on the grants management program, has occurred. That evaluation was
conducted and completed in October 2000.
A broad-based assessment of PEG activities was required by the proposed contract extension and 
USAID’s desire to upgrade Indonesia’s future growth through strengthened economic policies
and practices. The evaluation as presented in this document addresses this need. 
The evaluation determines the extent to which PEG activity is achieving its purposes, identifies
successes stories and lessons learned, and makes recommendations for continuing and future
PEG activity. The evaluation, undertaken by two team members, was conducted under the
auspices of the Indefinite Quantity Contract AEP-I-800-00-00025-00 Task Order 800. In
conducting this assignment, the evaluation team followed conventional methods of project
evaluation, systematically reviewing relevant documents, and holding structured interviews with
a wide range of stakeholders. As a result of security issues in Indonesia and respect for
Christmas and the holy month of Ramadan, the evaluation took place in two stages.
The first stage was implemented in Indonesia from December 4-19, 2001 when initial interviews 
with USAID, PEG, and GOI personnel were conducted. The second stage, also implemented in 
Indonesia, took place from January 27 to February 19, 2002 when a second round of interviews
with the aforementioned personnel was held. 
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SSAAMMPPLLEE SSTTAAKKEEHHOOLLDDEERR
CCOOMMMMEENNTTSS:
::
[the PEG project] “is the single 
most important AID project to the 
business community”
“the advisors work goes beyond the 
limited brief that they are given”
“AID should double or triple their 
budget for what they are doing”
[the PEG project] “serves as a good 
case study on how AID and the 
multi-laterals can work together”
The first field visit took place during the month of December 2001 after receiving security and
travel clearance. During this first field visit initial contact was made with USAID
representatives, PEG personnel, and most of the GOI counterparts. Interviews were conducted
with all of the PEG advisors, jointly and individually. Interviews were also conducted with GOI 
representatives from the Ministry of Industry and Trade, BAPPENAS, Bank Indonesia, the
Coordinating Minister for Economic Affairs, and the
Ministry of Posts and Telecommunications. In addition,
other project stakeholders from the private sector were
interviewed. Unfortunately, this field visit was
concurrent with the holy month of Ramadan and just
before the Christmas holidays thus precluding in-depth 
interviews with the PEG advisors and meeting with all of
the stakeholders. With concurrence of USAID, a second 
field visit was scheduled.
The second field visit began in late January 2002 and was 
completed in mid-February. During this second field visit 
intensive in-depth rounds of discussions were held with
the PEG advisors and representatives from the multi￾lateral banks, other bilateral donors, the private sector and 
the few GOI counterparts that were previously
unavailable. Over 60 individuals were contacted during these two field visits. A list of all of the 
individuals contacted is found in Annex C. In brief, all interviewees gave high marks to the
accomplishments of the PEG team. There were no negative comments on the quality of work. 
II. Evaluation Findings
By agreement with USAID, the weight of the broad-based evaluation focused primarily on the
technical assistance component which constitutes the largest part of project resources, had not
been previously reviewed, and would be the critical foundation for future projects. The PEG
grant activity and the training activity received less attention. Evaluation findings are presented
below. The findings adhere to the key task elements delineated in the evaluation’s scope of
work. A copy of the scope of work is found in Annex D. 
Efficiency 
The contract is proving to be a cost-effective means of addressing the desired project objectives. 
It should be noted that the PEG project was conceived in one era, implemented in another era,
and evaluated in yet another era. The initial concept of the PEG project was to serve as an
umbrella for various support programs following USAID’s decision to wind down its
development assistance portfolio in Indonesia. Shortly after the PEG project was conceived,
economic and political events in Indonesia forced a different mandate on USAID and PEG
leading to a reformulation of resource support and implementation activity. Soon thereafter
other political events, namely the election of a new president and the emergence of a more
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proactive political system, yet again influenced the implementation of PEG as counterpart
personnel changed and political power bases shifted. More changes in Indonesia’s economic and 
political events occurred in the summer of 2001 and continue today. These events coupled with
other recent world events and new security concerns placed more barriers on the PEG team to
meet project objectives. 
Yet the PEG team, and the individual advisors in particular, have overcome these challenges and 
met the objectives of the project. For example, throughout the changing political and economic
dynamics, technical assistance continued to complement Indonesia’s active participation in
multi-lateral trade negotiations. PEG advisors, principally those within the MOIT, helped the
GOI carry on formulation of Asian Pacific Economic Cooperation (APEC) action plans
including tariff and other trade policy reforms. Likewise, PEG advisors continuously responded
to GOI requests to meet WTO negotiation requirements and principles. Additionally, the
economic value of trade services reforms appears to be better understood by GOI personnel as
result of PEG’s work with a GOI interagency task force. Restrictions affecting approximately
200 service categories were identified. A general methodology to examine these restrictions has
been developed and refined, wherein today, the education and business services sectors have
been selected as sample sectors for a more thorough examination. A review of the education
services sector may prove critical since a strong national commitment to invest in education is
one of the attributes of the recently announced Millennium Challenge Account.
A hallmark of the project, and therein the efficiency, has been its flexibility in adjusting to
constantly changing conditions. Many of the changes experienced during PEG implementation
were well beyond anyone’s expectations. As previously stated, the PEG program was designed
to serve as an encompassing mechanism for USAID’s technical assistance programs during a
period of retrenchment. It was noted at that time that USAID/Indonesia’s framework, like
Indonesia itself, had been affected by the economic crisis and, once the full impact of the
economic crisis became clear, adjustments would be necessary. It was recognized that PEG’s
initial elements would, over time, no longer be warranted or would expand and that new program 
elements might be added. 
Thus, the initial activities identified were reasonable. As the economic impact of the crisis
became clear, adjustments to PEG activity followed. Efforts supporting commercial law reform
were expanded and moved from the PEG umbrella to a separate contract. Similarly, support to 
the Indonesian Central Bureau of Statistics was also transferred to a more appropriate contract. 
Moreover, support to the U.S.-Indonesia Leadership Council was discontinued.
In addition to adjusting initial activities through elimination or separation, PEG added critical
new activities as well. The inclusion of technical assistance for the telecommunications sector is 
a good example of these adjustments. During the implementation of PEG, it was recognized
that information-based technologies are fundamental to basic development objectives and that
Information and Communication Technology (ICT) could offer enormous opportunities to
promote economic growth. Accordingly, PEG shifted resources and allocated these to support
ICT. 
4
While we commend the PEG team for its ability to provide quality technical assistance under
difficult circumstances, they have done themselves and the PEG project a disservice by failing to 
provide a contextual framework of the economic and political events within their annual reports
or workplans. Thus outside observers, who naturally go to these documents for a first review of
the project, cannot grasp the magnitude of the conditions under which PEG operated. Moreover, 
there are no clear written linkages between the external events and the annual adjustments that
the team made throughout the implementation of the project. A transparent written record via
the annual reports or the workplan would give an unambiguous view of the conditions at the time 
choices were made. 
Further, annual reports and workplans are geared to the individual advisor rather than the GOI
ministries. While this is a useful tool, we would suggest strongly that results should be reported 
by individual ministry. This would allow one to see project resource allocations differently and 
provide another management tool. 
The PEG team recognizes this shortfall and has already implemented steps to improve the quality 
of annual reports and workplans.
Effectiveness
With the exception of the annual reports and workplans discussed above, the project achieved
quality outputs and results and concrete accomplishments that can be directly traced to the
contract. Approximately 70 publications have been produced. These publications cover many
facets of the PEG program and can be found on both the project’s web page and at USAID’s
Development Experience Clearinghouse (DEC). A brief listing of these publications are
presented in Annex E. 
However, publications only illustrate part of the quality of output and results. Hand in hand with 
the technical assistance effort are the actions that follow. Efforts by PEG resulted in effective
action by the GOI. Some recent ones are highlighted below. Others are presented in Annex F.
‚ A key accomplishment of the work at BAPPENAS has been the mid-term 
macroeconomic frameworks and policy agendas. The most recent framework was
explicitly included in the GOI Letter of Intent (LOI) to the International Monetary 
Fund (IMF). 
‚ PEG worked extensively to help the GOI to establish the legal basis for
identifying and then freezing terrorist assets in the Indonesian banking system.
Because of these efforts two separate orders requiring the freezing of terrorist
assets were issued in late 2001.
5
‚ PEG has been working with the EKUIN on a participatory process for developing 
a poverty reduction and alleviation program. The GOI’s approach in this area was 
well received in a presentation at the Consultative Group on Indonesia (CGI) in
November (2001.
‚ Despite political pressures to reverse the process, the PEG project has been
instrumental in maintaining trade policy reform momentum. Tariffs have been 
reduced by nearly 50 percent over the past six years and most non-tariff import 
barriers have been eliminated.
‚ The PEG project analyzed the tremendous benefits to Indonesia from port and
shipping reform and raised awareness of the need for continued deregulation and 
increased private sector participation in reforms. 
‚ PEG has been instrumental in getting Indonesia to adopt a pro-competition 
regulatory framework for telecommunications based on international best
practices. Regulatory reform is still in process, but one result is that the GOI has 
decided not to create a monopoly by merging two state-owned 
telecommunication companies. 
‚ In collaboration with USAID’s Asia and Near East Bureau, the World Bank and 
the Japan International Cooperation Agency (JICA), PEG facilitated the
development of ICT National Guidelines and a five-year ICT Action Plan. Both
documents were adopted by the GOI as part of a Presidential Executive Order
No.6/2001. 
‚ PEG made significant contributions to Bank of Indonesia’s adoption of a new
market friendly small credit promotion policy and its abandonment of lending
quotas (as required by the IMF LOI). Implementation is underway
In addition to the above, matrices outlining the depth of accomplishments in each year of
PEG can be found in the annual reports. These matrices serve as a common reference point 
for USAID’s strategic objective framework. In the case of PEG, the strategic objective is:
Strategic Objective 1: Foundations Set for Rapid, Sustainable and Equitable Economic 
Growth. Within this strategic objective are four intermediate results (IR): 1) sound economic 
policy and institutions; 2) a conducive legal and regulatory framework; 3) open access to
economic opportunity; and 4) knowledgeable public participation in economic decision￾making.
A current overview demonstrating PEG’s contributions to IR-1 during the past year is best
provided by the draft report prepared by an independent consultant. The draft report was
being compiled during the time of the evaluation and can be found in Annex G. The
evaluators concur with these findings and note that the IR-1 findings also interrelate to the
three other intermediate results of the ECG. 
6
SSEELLEECCTTEEDD
AACCCCOOMMPPLLIISSHHMMEENNTTSS IINN
22000011 :
::
Support to Indonesia’s active 
participation in multi-lateral trade 
institutions has produced openings 
in key sectors, including services, 
telcom, and agriculture which are of 
interest to U.S. business community.
Policy reforms on growth-critical 
infrastructure sectors such as ports 
and telecommunications have been 
advanced, and anti-competitive 
initiatives successfully thwarted.
A national action plan for 
Information & Communication 
Technology has launched a 
coordinated national effort to 
support economic growth and 
democratic policy-making through 
expansion of ICT. 
Moreover, it must be recognized that many results
and accomplishments cannot be placed in the public
domain since providing private advice to their GOI
counterparts is one part of the technical advisor’s
role. By the nature of the activity, this advice should 
be considered confidential and unfortunately, the
PEG team cannot receive proper recognition of their 
service. However, the inference can be drawn that
the PEG team did facilitate output production. 
Cases in point are the “white papers” issued by
BAPPENAS over the past several years. Three
“white papers” have been produced, beginning with
Looking to the Future of the Indonesian Economy
(1999), followed by The Indonesian Economy in the 
Year 2001: Prospects and Policies (2000); and most 
recently The Indonesian Economy in the Year 2002: 
Prospects and Policies. (2001). Several other
“white papers” are currently underway including one 
focusing on the critical issue of labor policy. 
Other examples include input into the drafting of
potential laws recommended to the National
Assembly. For example, within the MOIT and other
ministries, the issue of free movement of goods and
services within the domestic market has taken on more significance since local governments
began imposing additional trade constraints in the form of taxes, levies and licensing
requirements. Here PEG advisors serve as champions by initiating studies of the problem,
implementing a socialization and awareness campaign through seminars, assisting in the
“academic review” and preparing internal drafts, and facilitating the final draft that will be
presented for legislative consideration.
As to dissemination of PEG findings, particularly to outside participants, the evaluation yielded
clear evidence that findings are being widely circulated. This circulation is in addition to access
through the PEG web page and USAID’s DEC. Representatives from the business community
within Indonesia, the World Bank, the Japanese International Cooperation Agency, and the
Canadian International Development Agency (CIDA) worked with and benefited from the PEG
program. The one exception was the Asian Development Bank (ADB) resident mission in
Jakarta where a key individual, who previously worked with the PEG advisors, is no longer at
the bank. On the other hand, an ADB representative from the Manila headquarters gave strong 
comments on the PEG micro-finance advisor working on small enterprises and small scale
financing.
7
A few inexpensive steps, nevertheless, can be implemented that would further improve the
diffusion of findings. First, the business community in Indonesia desires more interaction with
PEG advisors through a series of luncheons or presentations at community meetings. These
meetings should be considered. Second, there is an absence of links between the
USAID/Indonesia web page and the project’s web page. Adding these links to the
USAID/Indonesia web page would point an outsider to the reference documents highlighted on
the project’s website. Third, PEG should consider including a reference to its website on its
letterhead and, more importantly, reference the website on each report prepared by the project. 
Moreover, each project report should reference the other project reports that are available either 
at the website or on DEC.
While the above discussion highlights the effectiveness of PEG’s technical assistance activities, 
achievements have also been produced through the PEG grants program. In brief, the grants
program complements the technical assistance endeavors by stimulating and supporting domestic 
parties interested in economic reform. Grant funding helps both public and non-governmental 
Indonesian organizations to form and strengthen partnerships with U.S. organizations for
cooperative work on key economic issues and problems.
Like their technical compatriots, several of the grantees have compiled a notable record of
achievements. A few highlights are:
‚ University of San Francisco (USF) - UDAYANA University’s program focusing 
on skills training for the legal profession (law faculty, lawyers, and notaries) in
Eastern Indonesia. Sub-activities included research grants and short courses for 
law faculties, legal education and reform seminars, short courses for legal
professionals and provisions for technical support to public officials and Non￾Governmental Organization (NGO) representatives at both the provincial and
regional levels.
‚ Institutional Reform and the Informal Sector (IRIS) – University of Indonesia
(UI) was able, on short notice, to organize 12 major public conferences and 37
seminars, workshops, and other events across Indonesia, prior to the national 
elections. 
‚ The Asia Foundation has devoted its assistance to strengthening small- and
medium- sized enterprises (SME) associations, organizational capacity and
influence on policy-making. They also supported a number of studies and
analyses of critical importance for SMEs, some of which formed the basis of
conditionality for international financial institutions. 
‚ Sustainable Indonesian Growth Alliance (SIAGA) conducted a “road show” of
regional seminars in five selected cities during the period leading up to national
elections. Their program is organized along topical lines, specifically, taxation,
financial disclosure, competitiveness, and sound environmental business practices.
8
A smaller grants program has recently been added to the larger grants program managed by PEG. 
The smaller grants program seldom run more than $10,000 for each applicant, are competitively
awarded to local NGOs, think tanks, and business associations and, address specific social
issues. To date, approximately 38 such grants have been given. Since many of these
organizations are unfamiliar with the use of U.S. funds, PEG provides financial stewardship as
well as technical oversight. Initial results indicate that this program is effective.
In addition to the technical assistance and the grants program, the PEG project also undertakes
training activities whose results contribute directly to the SO1 objective and intermediate results. 
It also appears that training too has been effective. Past training has focused on competition 
policy, small and medium enterprise development, managing capital flow, competition policy
services negotiations, monetary policy modeling, and understanding the Asian financial crises. 
Based on data in the 2000 annual report, 2123 individuals had received training through the PEG 
technical assistance team and 15,989 individuals had received training through the PEG grantees. 
This data reflects a reasonable inclusion of women. It does not reflect geographic distribution
within Indonesia. Since an annual report has not been prepared for 2001, no data was available
in the public domain for review. 
Relevance
The PEG contract supports USAID’s economic growth strategy. While the underlying principles 
of the strategy have not materially changed throughout the implementation of the project, the
mechanisms and resource allocations have. These shifts require flexibility, which the PEG team
has met which is a strong point of the project. An example is the reallocation of resources to
meet the needs of the telecommunications sector. Support for the telecommunications sector was 
not originally envisioned in the design of PEG, but as the political and economic environment
changed, support of the telecommunications sector became a new avenue to achieve potential
economic growth. The PEG team was able to adjust and provide support to this new approach. 
Moreover, the PEG team has contributed to the economic growth strategy by addressing
stakeholders’ high priority problems. Some of these priorities were presented in the discussion
on the project’s effectiveness. Others include the PEG teams interaction with complementary
participants in USAID’s project portfolio, multi-lateral donor organizations, and their
counterparts within the various ministries. For example, PEG advisors worked with the MOF to 
promote the work of the KPMG/Barents on tax reform. In conjunction with the IMF, the
Ministry of Finance is now moving on a number of fronts to improve tax administration and key
goals for tax administration reform were included in the latest LOI.
Another illustration of PEG’s collaboration with complementary USAID projects is its backing
of the IRIS advisor assigned to the DPR. DPR, among other things, appears to have a more
influential role in formulating the state budget, previously the province of BAPPENAS. Within
DPR, Commission 9 plays a key role in budget deliberations. The IRIS advisor works with the
chairperson of Commission 9 on the budget review and has been closely assisted in the
9
preparation and writing of position papers on a variety of topics by the PEG advisors from
EKUIN and BAPPENAS.
In cooperation with Deutsche Gesellschaft Fuer Technische Zusammenarbeit (GTZ), PEG
contributed to reforms in rural banks and non-bank micro-finance regulations. This process is
advanced but not complete. New rules are in place, though the licensing rules will be issued in
the next several months. The draft micro-finance institution law is currently under review by the
Ministry of Finance before presentation to the DPR. 
As an illustration of efforts in the ministries, the PEG team within MOIT played a leading role in 
improving awareness of the potential dangers of decentralization for Indonesia’s business
climate, and in particular the freedom to trade across sub-national boundaries. Here they
sponsored a number of regional seminars and conferences, including a major national
conference, and a series of regional studies and policy papers. As a result, the MOIT is now
working on a new law to ban all forms of tariff and non-tariff barriers in domestic trade.
From an institutional and intellectual capacity building perspective, the PEG program has
successfully trained the first generation of BAPPENAS directors who, in the opinion of the
counterparts, are further ahead in knowledge. Counterparts further opined that advisors provide 
excellent networking within the donor community, something which they themselves lack. PEG
advisors work extremely well with staff, counterparts, ministers, and provide valuable and useful 
input and recommendations. The evaluation team also found similar strong intellectual capacity
building at other ministries supported by PEG. 
Attention to institutional and intellectual capacity building influences other elements of the
project producing a symbiotic relationship. From the 1970s to the 1990s, GOI policy-making 
was a “top-down” process where a few influential persons made decisions. Today, the GOI
policy-making is shifting to a “bottom-up” process. As a result, the present role of technical 
advisors is to know the state of the art, have different ideas, and be capable of transferring skills
and technology in a mentor-student arrangement. The PEG advisors have these capabilities and
have succeeded in contributing to intellectual capacity building through the close collaboration
of PEG advisors and their counterparts. Historically, the presence of technical advisors was
restricted to a few ministries, namely, BAPPENAS, Ministry of Finance, and Bank of Indonesia. 
Today, PEG advisors are found in more ministries and institutions spreading their knowledge,
through training sessions and seminars or through informal conversations between PEG advisors
and counterparts in other ministries or institutions fostering vigorous interaction and dialogue. In 
the long run, the presence of advisors does not benefit one unit of the government alone, but the 
national assembly, regional governments, non-governmental organizations, universities, and
other institutions. As a consequence, there is a wide-ranging ownership in the policy-making 
process and a broadening of participation. Broader participation results in a healthier decision
making system that in turn leads to consensus building and sensible courses of action. PEG
efforts in this direction embodies the four intermediate results of USAID’s strategic objective
one, sound economic policy and institutions; a conducive legal and regulatory framework; open
10
access to economic opportunity; and knowledgeable public participation in economic decision￾making.
Allocation of Resources
It appears that PEG has been able to allocate and reallocate resources to meet the demands of the 
project. The technical assistance advisors and their GOI counterparts felt that they had received
adequate resources. All individuals of course wanted more, but they felt that they had received a 
fair share of the resources available to meet their objectives.
Unfortunately there was an absence of consolidated information that could provide a cumulative
breakdown of resources either by the 10 contract objectives, by GOI ministry or agency assisted, 
or by the three components of the PEG contract. It was not available in the workplans or the
annual reports. Thus, we can only infer from comments by the counterparts and the technical
advisors as to the distribution equity of resources from the total resources available.
With respect to technical assistance, it could not be determined how the short-term technical
assistance level of effort was distributed by ministry. The data that was provided only reflected 
distribution either by service requests of the long-term technical advisor or by distribution of
level of effort amongst the joint venture partners of the contract. Future reporting should also
reflect distribution by ministry.
As to resources made available to the training component of the project, no cumulative cost data 
was available, and as was stated earlier, no data was available in the public domain on the
number of individuals trained this past year. Unfortunately, the severe flooding in Jakarta during 
the evaluation prevented the evaluation team from a follow up meeting with PEG staff on this
issue. Thus, it could not be determined if resource allocation was consistent with terms of the
activity design. However, based on reviews of available annual reports, records concerning the
training component should be strengthened to allow a review of resource allocation,
programmatically as well as financially.
On the other hand, resource allocation data supporting the grants component was comprehensive 
particularly the data supporting the recently launched innovative “small grants” program.
Management of the Contract
The PEG program was designed to serve as an encompassing mechanism for USAID’s technical
assistance programs during a period of retrenchment. The contract had an initial two-year level
of effort as well as options for additional years of support. At the time of award, it was openly
understood that the initial project activities and objectives were reasonable and as the economic
conditions became clearer, adjustments to the PEG program and the contract would follow.
The changes experienced during project implementation went far beyond anyone’s expectations. 
These included program changes, security concerns, realignment of AID personnel, realignment 
of counterpart personnel, and resource constraints. Coupled with these changing circumstances
11
were the dynamics of Indonesian political events, namely the election of a new president, a more 
proactive political system and shifts in the political power base. Throughout this unpredictable
state of affairs PEG had the foresight to choose the right mix of technical advisors and place
them in institutions where their talents were well utilized. The contractor has managed these 
changes and the attendant resources well. Further, the contractor has demonstrated that it can
manage and oversee the implementation of grants under the grants program of the PEG project.
Thus, it is ironic that the most negative finding of the evaluation is the deficiency in the timely
submission and quality of the annual workplans and annual reports by the contractor as required 
by the standard provisions of the contract. 
In some cases annual reports and annual workplans were not prepared. No workplan has been
produced for project activities from January 2001 forward. Under the terms of the contract,
annual workplans are due 30 days prior to the anniversary date of the contract. The anniversary
date in this case is October 15. Hence, no workplan has been produced to cover the past 13
months of project activity. Additionally, no annual report been completed for this past year. 
In other cases, the workplans were wanting in analysis, recommendations, and cohesion against 
the project objectives and resource allocation. There was an absence of discussion of the
deployment of long-term and short-term technical assistance level of effort by GOI ministry or
institution. There was little, if any, discussion of the distribution and use of resources by project 
objective. 
With exception of the 1999 annual report, annual reports were predominantly compiled from
individual team member reports and did not give a comprehensive review or analysis of the
overall PEG project, give insight as to whether the project was collectively meeting its
objectives, whether objectives had changed and what impact these changes might have, or
provide an historic or prospective financial appraisal of the use of the available project resources. 
Moreover, there was limited discussion in the annual reports on the training linkages and the
grants component of the project as to whether these two components support the project’s
objectives. The evaluators believe there is a strong link, but it is not evident in the public record. 
The absence of quality workplans and annual reports is a disservice to the PEG team since these 
reports are the ones that external reviewers, and the public at large, first turn to when scrutinizing 
the project and determining whether a project has met its wide-ranging and complex
contractually mandated objectives. 
Substantial Involvement of USAID
It is clear that USAID personnel have had substantial involvement with the implementation of
the PEG project. USAID personnel are noticeably a part of the PEG team and are well respected 
by the technical advisors and the GOI counterparts. Similar positive comments were heard from
the private sector and representatives of the multi-lateral and bilateral donors. None of the
technical advisors or the GOI counterparts felt that USAID was micro-managing the project. 
12
SSAAMMPPLLEE SSTTAAKKEEHHOOLLDDEERR CCOOMMMMEENNTTSS OONN PPEEGG’
’SS
TTEECCHHNNIICCAALL AADDVVIISSOORRSS:
::
The Advisors supplied by USAID’s PEG program have superior 
intellectual capacity compared to advisors supplied by other countries. 
The U.S. Advisors are by tradition more technical, more results-oriented, 
aiming to get things accomplished in an expedient manner, with almost 
no embellishment in their reports, findings, and recommendations. These 
Advisors have demonstrated ability to interact effectively with their 
counterparts, and successfully performed transfers of technologies.
The advisors have greatly contributed to the ministry, by being able to 
interact well with all levels of personnel, from the staff level up to the 
minister. They have contributed enormously to decision-making within 
the ministry, and succeeded in the transfer of knowledge and technology 
to their counterparts. 
The PEG program produces recommendations that affect monetary policy. 
This in turn would affect the nation’s social well being. With the aid of 
advisors, the policies that the BI Board ultimately issues have been greatly 
improved, which in turn should improve economic activity. 
The PEG program’s advisors made it possible for Indonesia to fully 
participate in trade-related discussions and negotiations. Indonesia’s 
stance and position in the WTO in due course affects the lives of millions 
of Indonesians, preferably for the better.
The PEG program has successfully produced the first generation of 
BAPPENAS directors, trained by the advisors, who in the opinion of the 
counterparts are still much ahead in knowledge. Advisors thus far 
provided excellent networking. Advisors work extremely well with staff, 
counterparts, ministers, providing valuable and useful input and 
recommendations, which were ultimately legislated into law.
The only negative comment heard was the requirement for weekly reports, which we understand 
is not a necessarily an USAID directive.
Personnel
The PEG team is fortunate to have an excellent cadre of professionals, from both the technical
advisors and the GOI. The technical advisors worked under extremely difficult circumstances as 
highlighted earlier. All of the advisors are committed to and appropriate for the work at hand.
We do not believe that the advisors are stale in their professional attitude or demeanor. In fact, 
GOI counterparts are quite comfortable with the quality and timeliness of their advice and input. 
Indeed, immediate demands by the GOI on the technical advisors have increased as the need to 
address pressing economic issues grows. The advisors have graciously accommodated these
requests. In short, PEG has an excellent team.
The long-term technical advisors have a decidedly strong impact due to PEG project’s
cooperation with strategic institutions such as the Bank of Indonesia, EKUIN, BAPPENAS, the
Ministry of Finance, and the Ministry of Industry and Trade. 
Advisors are able to
interact with all levels of
personnel, and act as
trouble-shooters, and
solution providers for
the ministries they serve. 
Advisors provided by
PEG have demonstrated
time and again that they
are capable of multi￾level interaction within
their counterpart
ministry and have
provided much needed
knowledge and skills to
the ministries in
capacity building. 
There is an intense
collaboration between
counterparts, staff, and
advisors so that,
knowledge flows to and
from all sides, fostering
dialogue, collaboration,
13
and consensus. It was observed that in many instances, problems were often resolved quickly
because of the advisors generous assistance. The optimal choice and effective combination of
advisors placed in strategic institutions is a PEG strength that other programs may not be able to 
match.
While the above comments referred to the long-term advisors, similar comments were made
about the short-term advisors as well. In many instances, short-term advisors have very specific 
skills that support a broader project objective. A case in point is the recent request for a short￾term advisor to participate in a public hearing on interconnection. Interconnection deals with the 
complex rules and regulations associated with connecting other telephone service providers to
the existing Telkom telecommunications network. This entails fees, rents, tolls and other 
payments a telephone service provider has to pay in order to be able to use existing land based
and base receiver stationed Telkom lines. Currently there are no uniform rules and regulations
equally applicable to all telephone service providers and operators. The interconnection hearings
are working to formulate an equitable and uniform set of rules, regulations, and fees payable for 
all of Telkom’s partners. PEG advisors know their technical limitation and have augmented their 
program objective by supplementing it with appropriate short-term technical assistance.
Counterpart Support
Within the context of what could be provided by the GOI, all technical advisors felt that
counterpart support was adequate. GOI representatives felt that their counterpart support was
sufficient and that PEG had not placed undue hardship on them. GOI representatives also stated 
their appreciation for support received from USAID, but some did state that if their agency did
not receive funds from USAID, then other donors would likely fill the void.
Sustainability
Positive changes initiated and supported by PEG would be maintained should USAID funding
end. Partly, this results from the intellectual capacity engendered by the technical advisors. It is 
also a result of the ongoing relationships that the advisors have developed with their counterparts 
over time.
Sustainability can also be seen in the continued production of “white papers” that will be issued
after project termination. Similarly, PEG’s involvement in facilitating new laws and regulations
will remain. 
Finally, sustainability is evidenced by the independent support that the GOI will give to the
activity should USAID end its support. One counterpart stated to the evaluation team that if
USAID did not provide funds for the technical advisor, then he wanted to know as early as
possible so that he could request funds from the GOI budget to maintain this advisory position.
14
III. Recommendations
Some of the key issues and problems facing Indonesia when the PEG project began are still with 
Indonesia today. For example, World Trade Organization surveys indicate that Indonesia is
consistently at the bottom of numerous performance lists, and typically ranks number 49 out of
49 nations surveyed. Indonesia still has a long way to go. The recent monetary crisis resulted in 
the closing of numerous companies, causing massive unemployment. Consequently, Indonesia’s
domestic and international trade positions dropped significantly. 
Moreover, regional autonomy within Indonesia has lead to a myriad of local laws inhibiting
internal free trade and the free flow of goods. These regional laws distort the flow of goods from 
one region to another, from one province to another, from one island to another, and even disrupt 
the flow of goods within the same district. In the short-term various regions feel free to collect 
regional taxes and impose regional tariffs in addition to existing national taxes and tariffs. The
long-term impact is the reluctance of investors to invest in those regions, and ultimately
Indonesia as a whole. 
Also, a modern telecommunications infrastructure is critically important to Indonesia’s national
competitiveness. In addition to providing basic telephone services, efficient information flows
play a vital role in linking Indonesia to international financial markets and will play an every
more important role in linking manufacturing enterprises, including the light industries that
Indonesia now specializes in. This could be particularly important in a country like Indonesia
where geographical barriers to trade create higher costs than in other countries. Efficient
information technology has the potential to reduce these costs.
Finally, the recent political changes have significantly impacted agencies and institutions
benefiting from PEG’s support. One obvious occurrence is the uncertain role of BAPPENAS,
which previously enjoyed wide-ranging influence as the central planning agency of the nation.
The past administration decided to reduce the role of BAPPENAS, and placed more emphasis on 
the Ministry of Finance. The present administration at the time of the evaluation was still
undecided on the role of BAPPENAS. This development is coupled several bills within the
parliament designed to change the role of budgeting. 
In light of the above considerations, as well as other world developments, USAID should
critically examine the future deployment of its scarce resources into areas where they will have
greater impact. One requirement of this evaluation is to provide input to that decision.
Recommendations are presented in two groups. The first group concerns the on-going project,
including the proposed extension to June 2003. The second group gives recommendations for a
follow on activities. Both sets of recommendations advise USAID to sort out the niches in
which they intend to specialize and where they can have greatest impact. Efforts should also be
taken to determine the existing niches among and within the various institutions. One obvious
15
existing niche is support for institutional capacity building. Moreover, it is suggested that
flexibility, similar to that experienced in PEG, be maintained.
On-going Project
With respect to the ongoing project, two sets of recommendations are suggested. The first set
concerns management issues. The second concerns adjustments in program activity.
On contract management issues, it is recommended that the:
‚ Contractor improves the timelines and quality of workplans and annual
reports by including analysis, recommendations, and cohesion against
the project objectives and resource allocations.
‚ USAID improve its oversight of the contractor’s workplans and annual 
reports. 
On program activity at least through the June 2003 date, it is recommended that USAID:
‚ Continue support on trade issues superintended by the Ministry of
Industry and Trade. Emphasis should be on internal and regional trade 
barriers issues as well as the issues relating to the WTO. Peg’s current 
work on the educational services sector should serve as a good
example for other service sectors;
‚ Continue support on labor issues and unemployment, either in
BAPPENAS or, if practical, at another ministry such as the Ministry of 
Labor;
‚ Continue support to the telecommunications sector;
‚ Continue support to EKUIN;
‚ Reduce support to BAPPENAS;
‚ Enhance support to the Bank of Indonesia and to the Ministry of
Finance. Within BI the advisors roles should be tightened; 
‚ Strengthen support to DPR; and
‚ Consider advisor support to the Ministry of State Enterprise since this 
ministry supervises all private as well as state banks, is in charge of all
state enterprises, and overseas IBRA. 
16
While we understand that a project extension through June 2003 has been announced, we are not 
aware of the allocated resources or the planned level of effort. We assume it is the same level of 
effort that is currently allocated. If this is the case, then the recommendations above would entail 
a decrease in the number of advisors or level of effort allocated to BAPPENAS; implementation 
of the currently planned reallocation within the Ministry of Industry and Trade; and perhaps
reallocating the advisor in charge of small credit financing at Bank Indonesia to a more
important and wider role, with increased responsibilities, at the Ministry of Finance. 
Future Project
The issues identified earlier will not have been resolved by the close of the current project in
June2003. Constraints to regional trade will still exist, WTO issues will remain prominent,
money laundering will continue to be on the horizon, and it is projected that unemployment will
rise by 10 percent with the most serious jump among educated people. This implies that support 
to the GOI continue along current lines, namely, support to MOIT, BI, and MOF. Less certain is 
future support to BAPPENAS given its unclear role. Perhaps more importantly, issues involving 
labor policy may need to move to the forefront. Consideration should also be given to support
the Ministry of State Enterprise.
Annex A
PEG SOW Original
SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
C.I. CONTEXT
a. Overview of the Indonesian Economy
Indonesia has been hugely successful in promoting economic growth over the last 25 years. As a result 
of sound macro and sectoral growth policies--with key assistance from USAID--the ruined economy of 
Indonesia in the mid-sixties has been transformed into one of the success stories of East Asia. These
achievements include: self-sufficiency in rice; sustained growth of jobs; increased economic
participation of women; economic growth over 25 years averaging 6.9% per annum; universal primary 
education; deregulation and transformation of the economy from near-total dependency on oil and gas; 
liberalization of banking and the development of financial markets; growth of decentralized municipal
finance; the development of Indonesia as a major and reliable trading partner for the United States; and 
Indonesia's emergence as a significant leader in global trade deregulation through GATT and APEC. 
The Indonesian economic miracle of the last 25 years is a textbook example of the importance of
economic policy at both the macro-and micro-level. It is also testimony to past US influence in support 
of sound economic policy.
Indonesia now has the potential to complete its economic transition to reach long term sustainable
growth, although it still has a long way to go. Indonesia currently has an annual per capita income of
approximately $1,150. Continued uninterrupted growth over the next quarter century could put
Indonesia on the verge of Newly Industrialization Economy (NIE) status by the year 2020--with a per 
capita income slightly higher than that of Thailand today. By then, Indonesia could be the world's
fourth or fifth largest economy and a major US trading partner. 
But, as the Mexican experience earlier in the decade has shown, and the recent Thai problems suggest, 
economic success is never assured. Moreover, the sheer size of the Indonesian economy--already 
larger than Canada, South Korea or any economy in ASEAN in purchasing power parity terms--creates 
enormous complexities and difficulties for the future management of an ever deepening and ever more 
complex economy. Indonesia's human capital and institutional base for economic policy analysis,
design and implementation is still very slender. Further, there remain strong elements in the economy
who still favor protectionist policies, and others who seek to retain or expand their existing benefits
from monopolies and other aspects of Indonesia's high cost economy. These forces threaten the long￾term sustainability of Indonesian economic growth. Customers and partners point out that there are
also a series of new policy issues that are not only central to the sustaining of Indonesian growth but 
also of major importance to the United States. These include trade liberalization, intellectual property
rights, policy for the development of the rapidly expanding service sector, increased competition and
the reduction of corruption. Consequently there are a large number of public policy issues important 
for sustaining economic growth in Indonesia which are also of concern to the United States.
Annex A-2
However, although problems lie ahead for Indonesian economic growth, it also has to be recognized 
that there have been major improvements in Indonesia's own capacity to manage and finance economic 
growth. Economic managers are more sophisticated, the weight of the economy is now in private
hands and there is a stronger institutional base in Indonesia for economic policy analysis. 
Nonetheless, there is sufficient continuity so that the opportunity continues to be present to deliver
development assistance in traditional and highly successful ways that Indonesian public officials and
private actors both know well and respond to favorably. In particular, these conditions create an
environment favorable to a continuation of technical assistance activities that will maintain the
engagement of the United States in central Indonesian economic growth issues until after the turn of
the century. As always, such technical assistance will facilitate sound economic policies with relatively 
modest resources. As USAID moves into a transition from development assistance to development 
cooperation, it will nonetheless build on the numerous linkages which already exist, or are coming into 
being, between policy-based institutions in the United States and Indonesia--both public and private. 
As new ideas and approaches arise from the various US-Indonesian linkages, long-term technical
assistance will help the GOI devise and carry out necessary economic policy changes. 
b. USAID's Economic Growth Strategy. 
With limited USAID resources in a vast $200 billion Indonesian economy, it is evident that policy￾based assistance is the only way to exercise significant influence on national economic growth. USAID 
experience of the last decade has demonstrated time and again just how effective policy-based 
assistance is in promoting growth and in supporting US interests. Promoting sustained economic
growth, therefore, requires a continued engagement with Indonesia in policy development and
implementation that is focused on central issues of economic growth and on building alliances which
enhance the long term opportunities for sustaining US engagement on economic growth issues into the 
21st century.
USAID's economic growth strategic objective for the period from 1997 to 2001 is to promote
sustained liberalization of international trade and domestic 
competition for the mutual benefit of Indonesia and the United States.
Indicators: Achievement of this strategic objective will be shown by:
1. Increased value of Indonesia - U.S. non-oil trade.
2. Increased value of US Foreign direct investment to Indonesia.
3. Increased share of small and medium manufacturing industries in total manufacturing
output.
4. Financial sustainability of the U.S. - Indonesian Partnerships for Economic Growth. 
In order to achieve this, USAID has identified two Intermediate Results:
Annex A-3
First, Improved Policies and Practices to Promote Increased Openness to International 
Trade and Investment.
Indicators:
1. Lower average (unweighted) import tariff rates.
2. Reduction in number of non-tariff barriers.
3. Reduction in Number of Export Restrictions.
4. Adoption of key government enactments which facilitate foreign trade and
investment.
Second, Improved Policies and Practices to Promote Strengthened Domestic Economic
Competition. 
Indicators:
1. Reduced concentration within major sectors of the Indonesian 
economy.
2. Reduced distribution costs.
3. Reduced government approval process to start up a new business.
4. Improved transparency of Indonesia's economic law and regulatory
environment.
5. Increased bank lending to small and micro firms.
These Intermediate Results are the key requirements of a sustainable Indonesian growth strategy. 
There are many obstacles to implementing Indonesia's stated commitment to full participation in
GATT/WTO and even more significant hurdles to the deregulation of the domestic economy. The
USAID strategy will focus on the incremental policy developments that are needed to sustain
Indonesia's deregulation drive to a fully open and competitive economy and NIE status.
C.2. SUMMARY OF THE PARTNERSHIP FOR ECONOMIC GROWTH (PEG)
a. Project Summary
The overall goal of the Partnership for Economic Growth (PEG) is to sustain Indonesia's economic
growth by strengthening economic policies and practices associated with increased openness to
international trade and investment; and strengthened domestic economic competition. PEG's purpose
is to establish long-lasting relationships between America's premier public and private institutions with 
counterpart groups in Indonesia to assist in formulating and implementing these economic policies and 
practices. It will do this through Linkage Grants that will be solicited from a wide range of
Indonesian-American collaborators who submit proposals for forming long-lasting partnerships to
address key policy constraints relevant to meeting USAID's Economic Growth Strategy. The
Annex A-4
proposals, each expected to be in the range of $250,000-$1,500,000, will be solicited and evaluated by 
a contractor which will submit recommendations to a 
USAID - Government of Indonesia Technical Committee for review and final approval. Once
obtained, the contractor will make the awards, monitor progress, ensure quality, and
disseminate results. 
PEG will benefit from high-level advice from an Indonesian-American Economic Leadership
Council, to be established jointly by USAID and the Government of Indonesia, composed of 
 distinguished experts who have a long-range vision of economic growth in Indonesia, and 
American interests in such growth. This group will meet annually to provide technical
direction and lend their support to the Partnership's objectives. Their meeting will coincide 
with an annual Economic Forum which will provide an opportunity for a wide range of
government officials, business persons, economists and other professionals to debate
issues associated with Indonesia strengthening its trade/investment regime and domestic
competition. Each year a different topic will be selected from key economic growth issues.
PEG will compliment the companion Long Term Technical Assistance Activity (LTTA), the
other major activity planned by USAID/Indonesia's Economic Growth Team. The LTTA will 
provide direct technical assistance within the GOI and therefore a vehicle through which
policy advice generated by PEG Partnerships can be brought to the attention of key GOI
officials.
The overall Partnership will last 5 years and USAID will contribute $16.7 million. The
Government of Indonesia and private partners will provide matching funds to this $38.7
million total program. When concluded, PEG will have left behind important contributions to 
Indonesian economic reforms, long-lasting linkages between Indonesian and American
institutions focussed on economic policy issues, and a framework which can be used by the 
partners to continue to support reform efforts. 
 
b. Illustrative Institutional Partnerships Supported by PEG 
The following are illustrative examples of the kind of institutional partnerships to be 
supported under PEG. Partnerships are not limited to these examples nor do they
represent a prior commitment to work with the institutions named.
1. Government-to-Government: Connections could be strengthened between
Indonesia's government and U.S agencies to work on customs administration, improve the 
transparency and administration of corporate income tax collection, and otherwise to
strengthen Indonesia's policies for greater industrial productivity and domestic
competitiveness.
Annex A-5
2. University-to-University and Other Economic Research Institutions: The
University of Indonesia could undertake a joint economic research program with an
American university on various impediments to expanded trade and investment and
strengthened domestic competitiveness. The Agricultural Institute of Bogor (or IPB),
working with a counterpart institute of higher learning in the United States, could work to
reduce excessive tariffs on agricultural imports (e.g. off-season fruit and live cattle) which
diminish trade opportunities and the ability of Indonesian agricultural producers to benefit
from external inputs. Universities could also be enlisted to address policies to enhance
human capital necessary to increase Indonesia's domestic competitiveness, a concern of
Indonesian policy-makers today.
3. Professional Association Linkages: The American Bar Association and the
Indonesian legal profession could join for the further development of commercial law to
protect Indonesian entrepreneurs and American investors. Likewise, the Indonesian
Economists Association and the American Economics Association, or other allied social
science organizations, could agree on a program of exchanges to strengthen economic
policies associated with intellectual property protection. The Indonesian Institute of
Accountants could work with a professional accountancy standards body in the United
States to help determine, set and enforce generally accepted accounting principles, audit
standards or a code of professional conduct - without which the reliability of financial
information is questionable and the ability to attract and make sound investment decisions 
is greatly diminished.
4. Trade Association Linkages: Indonesian and American agribusiness trade
associations could form partnerships to remove barriers to greater agricultural trade and
investment, such as the development of government standards, inspection and guarantees 
of pest-free status of exports. Auto parts industrial associations in both Indonesia and the 
United States could form a partnership to examine tariff and non-tariff barriers to greater
trade and investment in the auto component industry. Small-business associations could
tackle policies hampering the growth of the small-business sector, thereby affecting
domestic competition. 
5. Business-to-Business Relationships: While normal business transactions rightly 
belong with the private sector, pioneer activities which help to open markets and increase
domestic competitiveness can be supported by the Partnership. For example, new
business partnerships which further strengthen Indonesian financial markets (such as
establishing a strictly private bond rating company to encourage greater foreign investment 
in physical infrastructure) or which demonstrate viable means for private sector investment 
in, say, port development and management, could benefit from PEG linkage grants. 
c. PEG Grant Subject Matter
Annex A-6
Below are five illustrative PEG Linkage Grants, which demonstrate the subject matter that
would bind typical Partnerships to improve critical economic policies.
PEG Grants are not limited to these examples nor do they represent a commitment to fund 
PEG Grants in these areas.
1. Continued Trade Liberalization. Partnerships can be formed around this
objective with a wide array of institutions in Indonesia and the United States. For example, 
there are a number of independent economic policy think tanks and business research
services in Indonesia which would be ideal participants in PEG. They have, in the past,
been champions of Indonesia's move towards global integration, and based on several
customer surveys, indicated a strong interest in joining with American institutions to address 
the remaining barriers. As economic policy making continues to become more broadly
shared outside of government channels, PEG offers a unique opportunity to support both
continued economic reforms and the emergence of a more pluralistic policy-making 
process, based on informed debate. 
These partnerships can, and indeed, should broaden beyond the economic research
communities in Indonesia and the United States. Business associations, such as the
American Chamber of Commerce in Jakarta and Indonesia's KADIN, are also eager to
support a freer trade regime. And as non-traditional nontariff barriers, ranging from
environmental conditions to labor union/worker rights and safety and health conditions
become more dominant in international trade disputes in a globalized economy, non
traditional partnerships in these areas should be encouraged to find solutions to both
legitimate concerns and freer trade. Industrial standards setting, inspections and
certification organizations, are also important players in implementing a freer trade regime 
and they will also be encouraged to join the Partnership for Economic Growth.
2. Small Business Policy Reforms. There are a number of Indonesian and
American institutions, both public and private, which are interested in supporting the growth 
of small businesses by removing policy constraints and strengthening key practices and
organizations. A number of Indonesian non- government organizations expressed such an 
interest in working with PEG. Likewise, the United States has an array of institutions which 
represent small businesses and help lobby for economic policies beneficial to their
membership. Establishing self-sustaining linkages between these Indonesian and
American groups to strengthen the small business policies, practices and institutions which 
boost domestic competitiveness and broaden trading possibilities would be an ideal PEG
partnership program.
A PEG Linkage Grant would preferably be between non-government organizations in
Indonesia and the United States, as opposed to a government-to-government linkage. 
Such a partnership could conduct a series of studies identifying policy, practice and
institutional constraints to small businesses in Indonesia and recommend solutions. 
Annex A-7
Workshops and seminars could be held in Indonesia to build up constituencies for reforms 
and follow-up would be necessary to see that timely actions are taken. The American
counterpart institution could also be helpful in guiding its Indonesian partner in how to
effectively build up membership and how to lobby for change. Professional exchanges
between leadership and staff of these partners could be one means of building up local
capabilities in these important functions. 
3. Agribusiness Competitiveness and Trade Liberalization. Opportunities for
partnerships in agriculture and agribusiness abound. Examples include linking Indonesia's 
Plant Propagators Association to lobby for a new seed law. If successful, both Indonesian 
and American plant breeders and seed companies would benefit through increased sales of 
planting materials and Indonesian farmers and processors would benefit from improved
quality and production. Another example would be to work with relevant agencies and
trade associations concerned with appropriate norms and standards for the quality, safety 
and appropriate labeling of foods. PEG could also work with the Indonesian Agribusiness 
Management Association and America's International Food and Agribusiness Management 
Association to liberalize broader economic policies affecting international agricultural trade. 
 Much of this work could be associated with the new US-Indonesian Food and Agriculture 
Forum in its formative years.
4. Commercial Law. 
PEG Linkage Grants could support the strengthening of associations of Indonesian lawyers 
through collaborative efforts with the American Bar Association and other professional 
associations in the United States. University-to-university collaborations among legal
departments could also be launched. Linkages to U.S. publishers could help develop the
dissemination of Indonesian laws throughout Indonesia and also make English versions of 
relevant laws available to international investors. We would ask that these partnerships be 
targeted on establishing and improving specific commercial laws and their implementation. 
Joint drafting of new or modified laws, holding workshops and seminars, and professional 
exchanges would contribute to achieving such objectives. 
c. Grant Selection Criteria
Proposals for PEG Linkage Grants will be reviewed against the following criteria, in order of 
priority:
a. Importance in terms of addressing significant policies and practices affecting
Indonesia's economic growth, Indonesian-American economic ties and relevance to 
meeting USAID/Indonesia's Economic Growth Team's Strategic Objective and
associated Intermediate results and Indicators; 
Annex A-8
b. Mutual interest to both Indonesia and the United States, as demonstrated by the 
commitment and engagement of the Indonesian and American partners who submit 
the proposal;
c. Results-oriented with the PEG linkage grants clearly targeted on formulating and 
implementing policy reforms and practices which are measurable and time-bound;
d. Self-managed, in the sense of mature, capable organizations carrying out tasks 
which they are professionally and administratively capable of implementing;
e. Sustainable linkage, leading to a durable partnership between Indonesian and
American institutions with common agendas; and
f. Costs shared, with the individual partnerships covering overhead and indirect
costs, and PEG supporting with the provision of direct costs.
C.3. PEG MANAGEMENT
PEG is under the overall management of the GOI's Director General in BAPPENAS, the 
National Development Planning Agency. The USAID/Indonesia Strategic Objective Team 
No. 1 (SO1) has appointed a full-time Project Manager to monitor the quality and
effectiveness of PEG activities and track the results.
The GOI Project Director and USAID/SO1 have collaboratively developed a five year PEG 
Workplan which covers the entire $38.7 million PEG budget. These partners 
collaboratively plan, review and approve project activities as set forth in each PEG annual 
workplan and the Project Implementation Letter (PIL) annual workplans. The partners carry 
our project reviews every six months. This enables all participants to jointly agree and
approve all PEG activities. Under this contract, there will be annual reviews of PEG
implementation activities. These reviews are necessary to ascertain that funds are being
expended by the most expeditious mechanism.
In an effort to preserve flexibility and responsiveness to local conditions, changes in the
annual PEG Workplan will be possible, with the approval of the GOI Project Director and
the Contracting Officer's Technical Representative (COTR).
The Project Agreement Completion Date (PACD) of PEG is ______. 
C.4. KEY ASSUMPTIONS
Annex A-9
USAID/Indonesia acknowledges that there are factors, which are totally outside the
Contractor's control, that may impact on the Contractor's success under this contract. 
These factors include, but are not limited to, the following:
* The involvement of the Government of Indonesia in the approval of (1) PEG Grants; (2) 
the selection and use of U.S. and indigenous non-government organizations as PEG Grant 
Partners; and (3) Contractor personnel. It is assumed that, with proper coordination, the
Contractor will obtain the necessary GOI approvals. However, failure to obtain such
approvals will, undoubtedly, hinder Contractor performance.
* The results achieved by PEG Grants are dependent upon the performance of specific
Partnerships, which are outside the Contractor's direct control. Failure on the part of these 
Partnerships, will obviously hinder Contractor performance. It is assumed that there is a
sufficient pool of U.S. and Indonesian organizations with common interests willing and able 
to form effective partnerships. In addition, it is assumed that with screening and review of 
PEG Grant applicants, selected partners will have sufficient technical capacity and
motivation to achieve desired results.
* Vested GOI and other interests may be resistant to the economic and policy changes
advocated in PEG Grants. There are many Indonesian parties that reap great benefit from 
rent-seeking economic behavior and will be resistant to much economic change that could 
threaten them in the short run. It is assumed that with GOI involvement in PEG planning
and decision making and with evidence of the success of past economic reforms, vested
interests can be overcome, at least to a limited degree, to make progress toward achieving 
reforms in economic policy and practice. 
* The sustainablity of PEG Partnerships, after the end of USAID support, is dependent
upon the willingness of the participants. It is assumed that there are many U.S. and
Indonesian organizations with sufficient commonality of interest to form and sustain such
partnerships to achieve common ends after direct USAID support has ended. 
* It is assumed that the overall political and economic situation in Indonesia will remain
stable.
Based on the fact that there are significant assumptions which, if not realized, could
adversely affect contract performance, a fixed base fee is provided in section B.4.(b). of
this contract to the Contractor for using its best efforts to achieve the stated contract
performance objectives. Thus, the Contractor will not be penalized if any of the above
assumptions are erroneous or other factors, outside of the Contractor's control, should arise 
and adversely affect the Contractor's ability to achieve the performance objectives. On the 
other hand, the award fee shall only be provided to the Contractor when, and if, the contract 
Annex A-10
performance objectives are achieved. 
[End Clause]
NOTE TO OFFERORS
* Manageable Interest: USAID seeks to contract for meaningful developmental changes 
rather than traditional project inputs. Therefore, the contract performance objectives 
are stated in terms of the development change or results we seek to achieve under this 
contract. However, it is recognized that the performance objectives, as currently stated 
in this RFP are not within the control of the contractor to achieve solely on its own. 
For example, the Contractor is dependent upon the activities of the PEG Partnerships 
to achieve stated contract objectives. Recognizing the performance objectives may be 
beyond the Contractor's manageable interest, a fixed base fee may be proposed by 
Offerors. This base fee will be provided to the Contractor, as a percentage of its 
monthly cost reimbursable payment, based on the Contractor's best efforts to achieve 
the contract performance objectives as measured by the provision of inputs and the 
obtainment of sub-results, short term targets and performance benchmarks. Thus, 
offerors are encouraged to propose sub-results, targets, and benchmarks that are within 
the Contractors manageable interest and will clearly lead to achievement of the desired 
performance objectives. Offerors should be innovative, yet practical and logical, in 
demonstrating how their proposed sub-results, targets, benchmarks, and performance 
monitoring plan will lead to achievement of stated performance objectives. Offerors 
shall also propose the Maximum Award Fee Amounts to be included under Contract 
performance Objectives numbers 1 through 3. Please note that the total of all fees 
(Base and Award Fees) shall not exceed the ten percent (10%) of the total estimated 
cost, less fee. The final contract award will consist of the performance objectives, sub￾results, benchmarks, award fee structure, and performance monitoring plan. Except for 
the award fee structure and budget, all of the above should be set forth in the offeror's 
Completion Plan and submitted as part of the technical proposal.
 [End Note]
C.5. INFORMATION OF GENERAL APPLICATION ABOUT THE 
 PERFORMANCE OBJECTIVES
 
Unless otherwise specified, the following shall apply to all performance objectives set 
forth in paragraph C.6. of this section.
(a) Each contract performance objective has a corresponding Strategic Objective or 
Annex A-11
Results Package Indicator. The contractor is only responsible for tracking and 
achieving the performance objectives, sub-results, and benchmarks of this contract and 
not the entire SO1 Strategic Framework The Strategic Objective and results Package 
may change. However, such changes will not alter the performance objectives of this 
contract unless specifically stated, in writing, by the Contracting officer.
(b) The base period for completion of the performance objectives is stated in Section H 
of this contract. The contractor is only responsible for achieving the objectives stated 
in the base period. 
(c) The terms Performance Objective, Performance Standards, Maximum Award Fee 
and Award fee Statement are defined, for purposes of this contract, as follows:
(1) The Performance Objective is the result which the contractor is required to 
achieve by the completion date of this contract.
(2) The Performance Standard is a measurable, quantifiable, rate or number 
under a performance objective which, if achieved, the contractor's performance shall be 
deemed satisfactory.
(3) The Maximum Award Fee Amount is a ceiling dollar figure that the Contractor 
shall receive if, and when, the performance objective is achieved in accordance with 
the Award Fee Statement, set forth in Section C, and the evaluation process described 
in Section E.
(4) An Award Fee Statement is provided under each performance objective 
which describes the allocation of the Maximum Award Fee Amount. Under most 
performance objectives, the Contractor may obtain a bonus fee, which is stated as a 
percentage of the maximum award fee amount, for any year in which performance is 
better, by a given percentage, than the satisfactory standard. If the Contractor fails to 
achieve a satisfactory standard level for any given year but achieves the final target as 
stated in the performance objective, the contractor may receive all (i.e., the balance) of 
the maximum award fee amount.
 
C.6. PERFORMANCE OBJECTIVES, STANDARDS, SUB-RESULTS AND 
INCENTIVES
(a) Results Package Indicator No. 1: Establishment of PEG Partnerships 
(1) Contract Performance Objective No. 1: Increase in number of PEG Linkage 
Grants negotiated and executed within three months after review and approval by 
Technical Committee.
Annex A-12
Performance Standards (Annual Satisfactory Levels):
1998: 3* (Baseline)
1999: 6
2000: 9
2001: 12
2002: 15
Maximum Award Fee Amount:
$ ( To be proposed by offeror: Base period Only)
Award Fee Statement:
Every grant negotiated and executed above the satisfactory performance standard 
level, the Contractor will receive a bonus of 10% of the maximum award fee amount. 
The Contractor shall receive the balance of the maximum award fee amount at the end 
of the base period of the contract if the performance standard of 19 is achieved within 
ninety (90) days prior to the contract base period completion date. 
(i) Sub-result. 1.a. 25 U.S. and 25 Indonesian (total 50) organizations 
contacted formally annually regarding submission of proposals for PEG Linkage Grants
Benchmarks:
1998: 50 (Baseline)
1999: 100
2000: 150
2001: 200
(ii) Sub-result 2.a. Prepares three annual PEG Grant submissions to 
Technical Committee, evaluating each grant application on technical, administrative, 
and financial merits.
Benchmarks:
1998: 10 grant proposals submitted for review (Baseline)
1999: 20 grant proposals submitted for review
2000: 30 grant proposals submitted for review
2001: 40 grant proposals submitted for review
(b) Results Package Indicator No. 2: Successful Management of PEG Linkage Grants
(2) Contract Performance Objective No. 2: Increase in the number of PEG 
Annex A-13
Partnerships in which partners contribute 50% or more of total grant cost.
Performance Standards (Annual Satisfactory Levels):
1998: 3 (Baseline)
1999: 7 
2000: 11
2001: 14
Maximum Award Fee Amount:
$ ( To be proposed by offeror: Base period Only)
Award Fee Statement:
When total number of grants in which partners contribute at least 50% of total grants 
costs reaches or exceeds baseline, the Contractor will receive a bonus of 10% of the 
maximum award fee amount. The Contractor shall receive the balance of the maximum 
award fee amount at the end of the base period of the contract if the performance 
standard of 14 is achieved within ninety (90) days prior to the contract base period 
completion date. 
(c) Results Package Indicator No. 3: Effectiveness of PEG Partnerships in changing 
Indonesian economic policies and practices. 
(3) Contract Performance Objective No. 3: An increase in the percentage of 
PEG Linkage Grant objectives achieved by PEG Grant Partnerships.
NOTE TO OFFERORS: It is not possible to specify the specific objectives of PEG 
Linkage Grants until grants are reviewed and approved. However, as noted in section 
2.c.1., PEG Grants must be measurable, time-bound and clearly targeted toward reform 
of specific policies and practices that are relevant in meeting SO1's Strategic Objective. 
 The Contractor can be supportive of these objectives being met. While not within the 
full control of the Contractor, the Contractor can "make best efforts" and encourage the 
PEG Partnerships to work toward achieving Grant objectives. 
Performance Standards (Annual Satisfactory Levels):
1998: 30%* (Baseline)
1999: 30% 
2000: 30%
2001: 30%
2002: 30%
Annex A-14
Maximum Award Fee Amount:
$ ( To be proposed by offeror: Base period Only)
Award Fee Statement:
For achieving grant objectives above the satisfactory performance standard level, the 
Contractor will receive a bonus of 5% of the maximum award fee amount. Should 50% 
or more of grant objectives be achieved, the Contractor shall receive a bonus of 7% of 
maximum award amount. Should 75% or more of grant objectives be achieved, the 
Contractor shall receive a bonus of 10% of maximum award amount. The Contractor 
shall receive the balance of the maximum award fee amount at the end of the base 
period of the contract if the performance standard of 75% is achieved within ninety (90) 
days prior to the contract base period completion date. 
(d) Strategic Objective Indicator: Financial Sustainability of PEG Partnerships
(4) Contract Performance Objective No. 4: Increase in the number of PEG 
Partnerships in operation one year after cessation of USAID/Indonesia funding.
Performance Standards (Annual Satisfactory Levels):
1999: 1* (Baseline)
2000: 3 
2001: 5
2002: 7
Maximum Award Fee Amount:
$ ( To be proposed by offeror: Base period Only)
Award Fee Statement:
Every grant negotiated and executed above the satisfactory performance standard 
level, the Contractor will receive a bonus of 10% of the maximum award fee amount. 
The Contractor shall receive the balance of the maximum award fee amount at the end 
of the base period of the contract if the performance standard of 9 is achieved within 
ninety (90) days prior to the contract base period completion date. 
C.7. OTHER DELIVERABLES
The following deliverables must be provided by the Contractor. Deliverables (a) and 
(b) together, are shown as a CLIN for Program Support (CLIN 0005). Because they do 
Annex A-15
not directly support a contract performance objective in Section C.6, no award fee is 
attached to these deliverables under CLIN 0006. However, deliverables (c), (d), and 
(e) will contribute to the contract performance objectives set forth in Section C.6 above. 
 The costs associated with deliverables (c), (d), and (e) shall be allocated by the 
Contractor under the appropriate CLINS 0001 through 0004. 
(a) NATIONAL CONFERENCES
The Contractor shall organize four annual conferences titled the Indonesian-American 
Economic Forum which will provide an opportunity for a wide range of government, 
business, finance, economic and other professional representatives to debate important 
issues associated with Indonesia strengthening its trade and investment regime and 
domestic competition. This entails creation of agenda, dissemination and confirmation 
of invitations, arranging meeting logistics, arranging speakers, attending proceedings, 
and recording and dissemination of proceedings. The timing of the Forum will coincide 
with the annual meeting of the Indonesian - American Economic Leadership Council 
(see below). The COTR will provide technical directions no later than one hundred 
and twenty (120) days prior to each scheduled conference to further clarify these 
deliverables. 
(b) ANNUAL MEETINGS 
The Contractor shall arrange logistics for and participate in four annual meetings of the
Indonesian - American Economic Leadership Council. The Council is a group of 
Indonesian and American experts concerned with economic policy in Indonesia. The 
group will meet annually to provide policy and technical direction and lend their 
support to PEG's objectives. The Contractor will be responsible for dissemination and 
confirmation of invitations, preparing agenda, and briefing Council members on 
problems and progress of PEG and recommending solutions to PEG implementation. 
The COTR will provide technical directions no later than one hundred and twenty (120) 
days prior to each scheduled meeting to further clarify these deliverables. 
(c) PUBLICIZE AND SOLICIT PEG GRANT PROPOSALS
The Contractor shall widely publicize the availability of PEG Grants through appropriate 
media in both the United States and Indonesia. The Contractor will also actively solicit 
PEG Grant proposals from a wide range of appropriate organizations in both the United 
States and Indonesia. 
(d) TECHNICAL ASSISTANCE
Annex A-16
The contractor shall arrange, as necessary, short-term technical assistance, to assist 
recipients of PEG Linkage Grants meet grant objectives. COTR approval will be 
required for each request for technical assistance.
(e) EFFORTS TO SUSTAIN PEG PARTNERSHIPS
The Contractor will undertake efforts to secure private financing and other means of 
support to sustain PEG Partnerships after direct USAID support to these partnerships 
has ended.
C.8. COORDINATION WITH PEG PARTNERS
 
(a) In order to fully implement the range of activities encompassed by PEG, SO1 
partners (including GOI agencies, PEG Grant recipients, other NGOs, universities, 
community and private sector organizations, and other donor agencies) will collaborate 
to mobilize resources and secure community participation in PEG activities. The 
Contractor must share information and closely coordinate with all partners in order to 
achieve the contract performance objectives. The following paragraphs describe the 
relationship between the Contractor and other agencies to achieve the performance 
objectives.
(b) The Government of Indonesia's Bappenas (National Development Planning Agency has 
primary responsibility for implementing PEG activities and administering the GOI 
portion of the PEG budget. The project is under the overall direction of the Director 
General at BAPPENAS as the GOI Project Director. The Contractor will work directly 
with the GOI Project Director. 
(c) The Indonesian - American Economic Leadership Council. USAID/Indonesia, the GOI
Project Director, and later the Contractor, will nominate and approve members of the 
Indonesian - American Economic Leadership Council. Final approval will be mutually 
decided by USAID/Indonesia and the GOI Project Director. The primary role of the 
Council will be similar to that of an advisory board or board of trustees. The Council will 
have no role in day-to-day PEG decision making or administration. It will identify the 
broad economic themes and economic policies that need strengthening and provide 
general guidance to USAID, the GOI, and the Contractor as to the direction of PEG 
partnerships.
This group will meet annually to provide policy and technical direction and lend their 
support to the Partnership's objectives. Specifically, their responsibilities will include: 
(a) identifying economic policies associated with trade/investment and domestic 
competitiveness which require strengthening; (b) suggesting potential relationships 
Annex A-17
between American and Indonesian institutions which would be capable of addressing 
these policy concerns; (c) advising on annual workplans based on these policy and 
linkage directions; (d) reviewing and suggesting relative balances between public, non￾profit and private sector institutions engaged with the Partnership; and (e) putting in 
place a longer-term framework to sustain PEG should it demonstrate its worth and 
value. 
Their meeting will coincide with an annual Indonesian-American Economic Forum
which will provide an opportunity for a wide range of government, business, finance, 
economic and other professional representatives to debate important issues associated 
with Indonesia strengthening its trade/investment regime and domestic competition. 
Each year a different topic will be selected from key policy issues under review.
(c) The Technical Committee will be composed of representatives from USAID/Indonesia, 
Bappenas and the Contractor. The Committee will be primarily responsible for the 
review and approval of grant proposals solicited and critiqued by the Managing
Organization. All PEG Grants will be subject to mutual agreement between USAID and 
the GOI.
 The Technical Committee will also serve as a vehicle for addressing coordination 
among Government of Indonesia agencies. Because PEG will strengthen economic 
growth policies, practices and institutions which cross bureaucratic lines, a means for 
addressing issues of GOI institutional coordination is necessary. Therefore with the 
advice of Bappenas, GOI departments may be invited to those Technical Committee 
meetings which plan and review particular PEG Linkage Grants which require such 
collaboration and coordination.
(d) USAID/Indonesia's Strategic Objective Team No. 1 (SO1) has established a results 
package (RP) teams under which PEG activities operate. The RP team has appointed 
a full-time Project Officer/Manager under supervision of the RP team leader. The 
Project Officer/Manager monitors the quality and effectiveness of the Contractor's 
performance by maintaining close contact with the Contractor's advisors, their GOI 
counterparts and by reviewing their accomplishments against annual workplans. The 
Project Officer/Manager shall participate in progress meetings with the Contractor's 
team. At frequent intervals, the Contractor will be requested by the COTR or the 
Contracting Officer to coordinate with and brief USAID on contract activities and 
progress toward achieving performance objectives.
C.9. CONTRACTOR'S DETAILED DESCRIPTION OF THE CONTRACT 
IMPLEMENTATION STRATEGY AND COMPLETION PLAN 
The Contractor's strategy for achieving the contract performance objectives is provided 
in its Completion Plan shown below:
Annex A-18
NOTE TO OFFERORS: The offeror shall provide a detailed description of its strategy 
for achieving the performance objectives and any proposed subresults as well as 
benchmarks or targets which will be tracked throughout the performance of this 
contract. The subresults, targets, and benchmarks must be clearly linked to 
achievement of the contract performance objective. The offeror's strategy must take 
into consideration all of the information provided in this Section C, including the 
assumptions, contract performance objectives, and deliverables. Offerors should be 
innovative, yet precise and practical, in demonstrating in its Completion Plan how the 
proposed subresults, targets, benchmarks and performance monitoring plan will lead 
to achievement of the stated performance objective. The final contract award will 
include the successful Offeror's completion plan and initial performance monitoring 
plan. Note that the technical merit of the approach proposed in this paragraph will be 
used as a significant contractor selection criterion.
C.10. CONTRACTOR PERSONNEL
Due to agreements reached with the Government of Indonesia under the Strategic 
Agreement, the following are the minimum personnel requirements under this contract:
(a) An expatriate shall be named as Chief of Party
(b) The Contractor shall identify and commit to other key personnel whose 
qualifications have been discussed in response to the requirements of section 
C9 above; and
(c) The Contractor shall identify and commit to positions expected to be fillede for 
other necessary personnel, such as secretaries who are expected to participate 
in the contract. 
NOTE TO OFFERORS: Offerors are expected to propose a staffing pattern and 
estimates for long and short-term level of effort in accordance with Offeror's 
strategy outlined in Section C.9. above. Exact titles, qualifications, and areas of 
responsibilities of long-term technical assistants and office support staff should 
be indicated by the Offeror in the technical proposal. proposed Key Personnel 
must be identified pursuant to Section F.5. The required language capability 
levels, stated in Section H.6. should be noted for each Key Personnel position.
END OF SECTION C
Annex A-19
SECTION E - INSPECTION AND ACCEPTANCE
E.3. PERFORMANCE STANDARDS
The performance standards set forth in Section C are the levels at which the 
Contractor's performance will be deemed satisfactory at annual intervals and at the 
completion date of the base period and options, if exercised, of the contract. Pursuant 
to Section E.4, the Contractor's performance will be monitored and evaluated on a 
regular basis to determine whether the Contractor has met the performance standards 
Annex A-20
at any given time.
[End of Clause]
E.4. AWARD MONITORING AND EVALUATION PLAN
(a) Award Fee Evaluation Plan
Evaluations of the Contractor's achievement of performance objectives will be 
measured on an annual basis between November and December of each calendar 
year. Achievement of a performance objective will be measured against the annual 
satisfactory level of the performance standard of the year in question. 
Accomplishments against standards shall be measured by the Contractor and 
submitted to the COTR no later than November 15th of each calendar year of the 
contract period. Provision of Award Fees, where indicated in Section C, will be made 
no later than April 30th of each calendar year of the contract period.
(b) Award Fee Evaluation Procedures
All award fees are applied on an annual basis as a percentage (%) of the maximum 
award amount allocated to the specific performance objective for above and below the 
standard satisfactory level indicated under each objective. At the end of the base 
period of the contract, the Contractor may receive the balance of the Maximum Award 
Fee amount of a given objective if the performance standard is achieved. The specific 
Award Fee statements applicable to each Contract performance Objective is stated in 
Section C.
Award fee Evaluations will be conducted annually by a technical panel consisting of 
GOI counterparts, USAID personnel (including the COTR) and, possibly, consultant(s) 
hired by USAID under separate direct contracts. This panel will be appointed by the 
Contracting Officer. The panel will examine all evidence, including the Contractor's 
measurements stated in paragraph (a) above, of the achievement of the annual 
performance standard for all performance objectives. At the conclusion of their 
deliberations and evaluation, the panel will make recommendations to the Contracting 
Officer regarding the Contractor's achievement of the performance objective. Only the 
Contracting Officer can authorize the payment of Award Fee amounts to the Contractor. 
 The Contracting Officer's decision will be final and will not be subject to the Dispute 
clause of this contract. The Contracting Officer will provide the Contractor with detailed 
information explaining the rationale for all Award Fee decisions so that the Contractor 
fully understands what aspects of performance or accomplishments may have been 
viewed less than desirable, what aspects are going well, and what areas of 
performance or accomplishments might be given greater focus in subsequent periods.
Annex A-21
(c) Performance Monitoring Evaluation Plans
(1) Monitoring
Within ninety (90) days after the contract award date, the Contractor shall finalize and 
submit the contract performance monitoring system to the COTR. This system shall 
effectively track inputs and outputs of activities and achievement of performance 
objectives, sub-results, benchmarks and standards over the life of the contract. It will 
also monitor progress of PEG Grant Partnerships in achieving grant objectives. This 
system shall also facilitate the flow of information within the contractor's organizational 
structure, enabling all parties to more efficiently monitor and manage activities 
required. The automated system shall be designed to collect, store, and report 
administrative, financial and programmatic data on the contract inputs and outputs as 
well as actual progress toward achieving the performance objectives and sub-results. 
The Contractor's final monitoring system shall be approved by the COTR within thirty 
(30) days of submission of the final system. The Contractor shall implement the system 
within fourteen (14) days of receipt of the COTR's approval of the system.
A variety of mechanisms, including the Completion Plan and Performance Monitoring 
report, will be used to monitor the Contractor's performance. These include, but are not 
limited, to the following:
(i). Meetings between Contractor team and USAID/Indonesia staff.
(ii). Feedback from GOI, PEG Partners, and other entities involved in, or 
impacted by PEG implementation.
(iii). Progress monitoring reports prepared by PEG Partnerships.
(iv). Site visits by USAID personnel or outside experts to observe PEG 
implementation in the field.
(v). Review of contractor's written reports and other products.
(vi). Periodic evaluations by in-house USAID or outside experts.
F.4. REPORTS AND PLANS
In addition to the requirements set forth for submission of reports in Sections I, AIDAR 
clause 752.7026, entitled "Reports", the Contractor shall submit the following items to 
the COTR specified in Section G:
(a) DATA COLLECTION REPORT
The Contractor shall conduct data collection on a yearly basis on each data related to 
the performance objectives and standards of this contract. This will also include data 
Annex A-22
related to performance objectives and standards of PEG Partnerships.
(b) PROCUREMENT PLAN
The Contractor shall submit a Procurement Plan to the COTR for approval no later than 
ninety (90) days after the contract start date. The procurement Plan shall contain the 
following:
(1) Specifications and the estimated costs of all non-expendable supplies and 
equipment to be purchased under this contract;
(2) An explanation of the intended use of each item;
(3) The source and origin of each item;
(4) A description of how the Contractor will monitor and control the use on 
non-expendable resources.
The Contractor shall abide by all source and origin requirements when procuring non￾expendable commodities, particularly vehicles, under this contract.
(c) ANNUAL WORKPLANS
(1) PEG Annual Workplan
Within ninety (90) days of the contract start date, the Contractor, the GOI Project 
Director, the PEG Technical Committee, and USAID/SO1 team members will 
collaboratively develop a detailed PEG Annual Workplan to cover the period _______ 
through __________. The Plan will be based on guidance provided by the Indonesian 
- American Economic Leadership Council and the annual Economic Forum. 
Subsequent annual workplans shall be developed and approved by this same group 
prior to the start of each calendar year. The Contractor is responsible for drafting the 
annual PEG workplan and its yearly updates. The Contractor shall submit the PEG 
Annual Workplan and updates to the COTR, PEG Technical Committee, and other 
partners, as directed by the COTR for approval. 
The Annual Workplans will be developed to ensure that project objectives are achieved 
by the end of the PACD of the PEG Project. The annual workplans will incorporate data 
from customer surveys conducted by USAID/Indonesia and will draw clear connections 
between results expected and activities planned. In addition, attention will also be 
given to coordinating PEG activities between the various PEG Grant recipients. In an 
effort to preserve flexibility and responsiveness to local conditions, changes to the PEG 
Annual Workplan will be possible, with the approval of the GOI Project Director, PEG 
Technical Committee, and USAID/SO1. 
2. Annual Contract Performance Plan
Annex A-23
The Contractor shall develop an annual Contract Performance Plan which updates the 
Completion Plan provided in Section C and shows how the performance objectives and 
subresults of this contract will be achieved through specific inputs and activities on an 
annual basis. This plan shall be incorporated into the PEG Annual Workplan, 
discussed in paragraph 1 above, as agreed to by the COTR.
(c) PERFORMANCE REPORTS
AIDAR Clause 752.7026, entitled "REPORTS" (October 1, 1996), is hereby provided in 
full text:
(1). Performance monitoring reports (PMRs): The Contractor shall 
submit performance monitoring reports summarizing progress of the major 
activities in process in relation to the requirements of the contract, indicating any 
problems encountered, and proposing remedial actions as appropriate. (Note to 
Offeror: This will include information on how well the PEG Grant recipients 
are meeting their objectives. The reports will present for each PEG Grant 
recipient information on overall progress, problems, issues, and will 
recommend remedial actions as appropriate).
(i). Performance reports shall be submitted within 30 days of the three￾month periods (calendar quarters) ending on March 31, June 30, September 30, 
and December 31.
(ii). The Contractor shall submit the reports to the cognizant Contracting 
Officer's Technical Representative (COTR) identified in Section G of the 
Schedule, who will forward the reports to the responsible Contracting officer.
(2). Performance evaluation reports (PERs): The Contracting Officer 
shall use information contained ion the periodic PMRs, discussed in paragraph 
1, and input from the COTR, to evaluate Contractor performance on completion 
of activities and, for multi-year contracts, on an interim basis.
(i). The Contractor performance Report (AID form 1420-66) which will 
be used to evaluate performance is attached to the Schedule.
(ii). Contractors shall have 30 days to comment on or rebut the assessment, 
or may simply concur with the assessments by signing and returning the CPR 
form to the CO.
(3). No other performance reports shall be required. The Contractor, 
however, shall promptly notify the CO and COTR of any problems, delays, or 
Annex A-24
adverse conditions which materially impair the Contractor's ability to meet the 
requirements of the contract.
(End Clause) 
(d) COMPLETION REPORT
In accordance with Section I, AIDAR clause 752.7026, entitled "Reports", the 
Contractor shall submit a Completion Reports to the COTR ninety (90) days prior to the 
contract completion date. The reports shall discuss all activities and achievement of 
the contract performance objectives, subresults and other deliverables from the 
contract start date through its completion. The reports shall follow the format of the 
performance Reports but shall also include a major section for performance objectives 
for the option period, if exercised. The completion report shall be submitted in draft 
form to the GOI Project Director and to the COTR for review. Any comments on the 
draft report are to be made by the COTR and provided to the Contractor within thirty 
(30) days. The completion report shall then be resubmitted in final form, no later than 
thirty (30) days prior to the completion date of the contract.
f:\rude\pegsow: Aug 13, 1997
Annex B-1
Annex B
PEG SOW 2002
SOW for the Nathan-Checchi Consortium
For the period July 1, 2002- June 30, 2003
 (19 April 2002 Draft)
This SOW addresses the activities and deliverables for the various long-term 
advisors provided to the GOI under the Nathan-Checchi consortium. SOW revisions are 
provided for 11 full time and one part time advisor. 
I. The Coordinating Ministry for the Economy, the Ministry of Finance, and 
Bappenas
Macro/Policy Advisor at Coordinating Ministry/Finance/ 
Bappenas
The main functions of the combined macroeconomic advisor position will be:
· macroeconomic and analysis support to:
o The Coordinating Minister for the Economy and
o The Minister of Finance
· Organization of trade support as requested by the Minister of Finance
· Agenda setting at Bappenas (integrated with staff work plans)
o Assistance for Annual Action Plan Repeta 2003 (II quarter 2002)
o Assistance for the next year’s White Paper (IV quarter 2002)
o The annual action plan – Repeta 2004 (I and II quarter 2003)
o Assistance for Long –Term Issues
ß Background studies (Q III and IV 2002)
ß Continued (Q I and Q II 2003)
The consultant’s key policy effort will focus on coordinating and raising the 
awareness in policy circles of the increasing importance of the poverty/ trade/investment/ 
labor/banking issues being worked on by consultants elsewhere. To the extent possible, 
this effort will be integrated with institutional development goals that include assisting 
the Planning Ministry to improve their analysis, agenda setting and coordination role in 
these areas. In addition, consultant will help improve the understanding, communication, 
and reporting of the staff and Minister of the Coordinating Ministry for the Economy on 
macroeconomic policy issues. In addition consultant will help improve the 
implementation and understanding of trade policies especially as they impact on elements 
of the Ministry of Finance. Coordination on trade matters is required with other USAID 
consultants, both within and without the Nathan-Checchi consortium, as well as with 
other donors.
Annex B-2
The consultant’s activities at the planning ministry will support the planning staff 
with strategy, guidance and support. At the Finance Ministry, the largest part of the 
advisor’s time is expected to continue the concentration on trade issues. Remaining tasks 
in the current workload include those identifying and providing policy recommendations 
and responses regarding the likely magnitude of smuggling, and the role of bonded zones, 
especially their foregone tax consequences. At the Coordinating Ministry the consultant 
will assist the Finance/Banking System consultant on more specifically macroeconomic 
tasks, including memos, speeches, etc. (In these tasks the Advisor will call on assistance 
from advisors at Bappenas, the Ministry of Industry and Trade, and Bank Indonesia).
Deliverables:
ß A study on budget issues on the overlap between regional and central 
government budgets in major sectors or an equivalent study, with 
recommendations on how to improve this problem in time for the budget in FY
2004 (i.e. the Repeta next year). 
ß Assist Bappenas to complete another White Paper at the end of 2002, and 
continue assistance to the Repeta process (the near-term focus will be on 
Repeta 2003, with a later change to background and issues for Repeta 2004)
to tighten national priorities and action plans to achieve them,
ß Under the guidance of the COP, consultant will provide leadership to the 
organization of the PEG team response on trade issues for the Minister of 
Finance.
Finance/Banking Advisor at the Coordinating Ministry for the 
Economy
The Nathan-Checchi consultant at the Coordinating Ministry for the Economy has 
as his direct counterpart the Deputy for Macroeconomics, Finance and Bank 
Restructuring. Requests for assistance are also received from the Deputy for 
International Economic Cooperation. In addition over the last year the current Nathan￾Chechhi consultant has also worked closely with an expert staff for the Minister of 
Finance on assorted economic issues including money-laundering, debt-for-nature swaps, 
Paris Club, etc. 
The consultant at the Coordinating Ministry for the Economy will focus on three 
areas:
· Finance and Bank Restructuring. This will involve reviewing the progress 
in this area reviewing (Two or more of the following)
o Once more explain the strategy behind recapitalization, to add to the 
arsenal of intellectual capital of the Coordinating Ministry. 
o The regulatory environment – including the new multi-agency 
supervisory agency. If this activity is chosen, there should be 
careful coordination with the ongoing work 
Annex B-3
o The evolution of financial markets (including the exit from the 
blanket guarantee)
o Micro level issues (especially state banks)
· Donor support
o Consultant will assist the GOI to understand and prepare for 
meetings with the donor community. The goal is to achieve a better 
GOI outcome and greater GOI ownership of donor community 
conclusions and recommendations.
· Private sector capital flows
o Consultant will assess and evaluate simple, limited effort strategies 
to help Indonesians devise ways to improve macroeconomic 
stability by improving private sector capital flows and a 
strengthening rupiah or an equivalent analytic effort. To 
accomplish this, the GOI will need to devise improved strategies 
that encourage these capital flows as public sector flows dwindle. 
The policy agenda includes improved understanding and policy in the banking 
and broader financial sector. This work needs careful coordination with other USAID and 
World Bank funded activities. The institution building is related to this, but more directly 
focused around an initial assessment of the possibility of improving the Indonesian 
government understanding of private sector capital flows and the policies and 
information required to maintain stability in such flow and to increase them. 
Deliverables:
· An initial study (or more) of the banking system or an equivalent activity 
as judged by the CTO designed to improve GOI policy including 
communication in this area.
· An assessment of how to organize better information between the 
Indonesian government and the foreign private sector or an equivalent 
activity as judged by the CTO. Consultant will prepare a report, make 
recommendations, and follow up.
· An coherent assessment of a Paris Club exit strategy that addresses 
Indonesia’s perceived needs in the context of the international financial 
community’s views or an equivalent activity as judged by the CTO.
· Other policy issues and support as they arise through requests from the 
GOI and as evaluated by the advisor.
Annex B-4
Macroeconomic Advisor
The Macroeconomic consultant for PEG at Bappenas will provide support for 
Bappenas efforts to improve macroeconomic analysis, projections and reporting 
especially around the Repeta/Budget process. The Planning Ministry and the Deputy for 
Economic Affairs is a key location in the Indonesian government where macroeconomic 
projections and analysis are carried out. In fact the Planning Ministry is responsible for 
providing input and direction to the Macro framework in May that forms the umbrella for 
the budget later in the year. With the focus on fiscal sustainability and its interplay with 
monetary policy the consultant will be responsible for continuing improvements in 
understanding and projections in these areas. 
In addition the Director for Monetary and Fiscal Affairs is to be held responsible 
for broader financial market development under the Bappenas reorganization including 
issues around banking, capital markets and the investment framework. Thus the advisor, 
working with the Nathan-Checchi advisor to the Coordinating Ministry for the Economy 
and other USAID advisors as appropriate, will review issues in the banking sector, capital 
markets and investment as requested by the Minister, and as needed to improve 
Indonesian understanding of the recovery path for the economy. 
A number of real sector issues have become increasingly important for effective 
macro-economic management:
· The macroeconomic advisor will continue to carry out analysis, draft suggestions 
for improvements, and work closely with counterparts, the expatriate investor 
community, and other donors to improve the Investment Law and clarify and 
make its implication benign as this law moves forward.
· He will assist the labor advisor to complete a coherent detailed Labor White￾Paper, addressing economic and labor relations issues 
· He will take the lead on preparing a coherent report addressing analytic issues, 
recommendations, and potential outcomes regarding that links the previous 
minimum wage work to poverty outcomes,
· Integrate the work on labor policy with the macro-economic framework, for 
example, the link between minimum wage policy, inflation and monetary policy, 
and 
· Continue to assist staff with their macro monthly reporting/surveys.
The policy focus of this work will be the support for the investment law and the 
integration of minimum wage and other policies with macro-economic policy. The 
institutional development will be focused around developing Bappenas capability in 
macroeconomic modeling, especially monetary and budgetary.
Deliverables:
Annex B-5
· Work with Bappenas (memos, training, estimation, model building) to 
improve monetary, macro and budgetary projections for Repeta 2004, 
including improved staff capability, (this has an externality for the 
Ministry of Finance and Bank Indonesia as these three institutions share 
their forecasts)
· Memos and briefings on developments in the investment law,
· Assistance to the white paper on Labor,
· A study on the relation of minimum wage increases and poverty or an 
equivalent study as judged by the CTO.
Real Sector Advisor
With the reorganization at Bappenas the bureau for industry has been moved under the 
renamed Deputy for the Economy. This provides an opportunity to advance a broader 
agenda on the real sector, building on the labor and investment work already under way 
and pushing this agenda to the fore as macro stability and budget sustainability concerns 
fade somewhat. Thus a full time USAID advisor is appropriate in the increasingly 
important area of trade and industrial policy. Two main tasks are envisaged for this 
position in the year ahead:
· The first task is to provide substantial analysis, input, and policy 
recommendations to a white paper on trade and industry policy issues facing 
Indonesia. This white paper will be input to the Repeta 2004, and as a 
background study for the long-term planning effort (in 2002/2003), and the 
Propenas (five year plan). Bappenas is planning to start this effort with an early 
seminar to follow up on the industry policy issues raised in the East-Asian 
Miracle Revisited. However, it is also a major element of the requests received by 
the team from the Ministry of Finance on trade. The goal of the advisor’s efforts 
is to help the GOI provide itself with a clear coherent position on trade and 
industrial policy that would help clarify, possibly reduce, or assist the 
government in refusing continuing demands for protection across many sectors.
· The second area of assistance from the Real Sector advisor is to assist the 
Macroeconomic advisor and Bappenas staff on upgrading macroeconomic 
projections models. This effort is to involve analytical work on at least three key 
structural issues affecting the model, providing diagnoses of problems, and 
recommendations for possible solutions. 
This advisor is to have a policy focus on synthesizing work within the government 
and elsewhere on trade and industrial policy issues for input to long, medium and short￾run government policy making and decision making agendas. Institution building will 
occur as part of the work with the staff on these issues but more directly through 
assistance to the macroeconomic modeling work.
Annex B-6
Deliverables
· The highest priority for consultant work is support for improved 
trade/industrial analysis including memos and up to a Bappenas white 
paper on trade/industry policy for use on upcoming Indonesian
government planning documents; or an equivalent activity as judged by 
the CTO,
· Revisions and possible extensions are to be made for three major changes 
to the existing macroeconomic model.
Labor Advisor at Bappenas 
This position is programmed for about one half a year. There are two areas of 
broad policy support: national labor policy and regional government public sector 
employment and wage policy. On national labor policy, the advisor will be asked to 
encourage concrete government policies on minimum wages, improved regulation 
(possibly laws) regarding the labor market and industrial relations, building on in-depth 
research and intensive technical support and consultations conducted during 2001-2002. 
There are two priorities.
· Consultant will provide a framework for substantive central government input, which 
takes into account the threat to employment from the anticipated minimum wage 
increases. The policy process on this issue, initiated at the regional level, begins in in 
the lead up to regional decisions about these key matters that will occur before 2003.
· Consultant will provide a focus for policy reform in the area of labor more generally, 
taking into account important developments in labor regulation, legislation and 
industrial relations, over the past three years. This work is to be designed to help 
provide direction, a set of priorities and an agenda for action in government reform 
and policy over the next three to five years. These activities will be organized around 
a forthcoming Bappenas white paper on labor issues (consultant will make major 
inputs) that will be discussed at a major workshop to be held in at about the mid-point 
of the additional work being carried out by the consultant. Consideration will be 
given to improved system of tripartite regulation of the Indonesian labor market by 
workers, employers, and government.
Consultant will also address the analysis of regional issues in the public sector 
labor market. Public sector employment dominates the urban economies in many Outer 
Island provinces. One pressing need is a more clearly defined set of regional government 
policies on the recruitment, deployment and wage policy in the civil service, which 
accounts for a overwhelming share of total regional budget expenditure. One approach is 
to explore the issues and implications of allowing the local governments to set their own 
salaries and working conditions. Decentralization has contributed to over-manning, and 
flexibility on compensation would allow the regions (with lower than average costs of 
living) more possibilities to smooth adjustments and free up funds for pressing social and 
economic expenditure needs. It would also align incentives and potentially raise 
awareness on the potentially damaging impact of minimum wages on private sector 
Annex B-7
employment. It will require quantitative analysis of civil service wages (building on 
previous World Bank work here), and qualitative work on the issues and strategy needed 
to change policy. Consultant will carry out at least three analyses and prepare inputs and 
at least two relevant reports, as appropriate.
Another, related, set of issues have to do with discrimination in employment 
against outsiders from other regions and employment of less qualified locals in key 
positions of government. Consultant will investigate to gain understanding of the 
importance of these issues for efficiency and equity at provincial and district level, and its 
potential impact on social cohesion. 
Consultant will actively seek to coordinate his activities as appropriate with other 
US government-funded activities directed to serving the Indonesian labor market.
Deliverables
Complete a major policy paper that will be a key input into the Bappenas White Paper on 
labor policy. Hold a workshop on labor policy inviting major stakeholders, policy 
makers, the press and politicians, and disseminate the discussions of workshop widely. 
Carry out and report upon as relevant an exploratory initial examination of issues on 
regional recruitment and deployment of labor, and civil service wages or two similar 
activities as judged by the CTO.
II. The next set of Nathan-Checchi consortium activities is carried out in the Ministry of 
Industry and Trade and in Bank Indonesia.
International Trade Specialist, Ministry of Industry and Trade
International Economic Integration and International Trade Negotiations
Trade Policy Reform. The Government of Indonesia has made great strides at 
integrating the Indonesian economy into the world economy. Since May 1995, tariffs 
have been reduced by over 50 percent and many non-tariff import barriers have been 
eliminated. Nevertheless, there continue to be requests for increased protection. In 
addition, the Government often needs to analyze its trade policy structure for 
international negotiations and for specific policy issues. The focus of this work is to be 
in the Ministry of Industry and Trade and in Team Tariff in the Ministry of Finance. 
Coordination on these is required with the Nathan-Checchi consortium and with other 
donors in support of GOI activities.
Deliverables: Update the project’s trade policy database and provide policy 
memoranda on trade policy issues as requested.
Support for Indonesia’s Participation in Multilateral Trade Agreements. The 
implementation and enforcement of international trade agreements and the negotiation of 
new agreements will continue to be major issues faced by the Government in the coming 
years. As part of the built-in agenda from the Uruguay Round, negotiations on services and 
Annex B-8
agriculture are now on-going in the WTO. At the Doha trade ministerial in 2001, the 
worlds’ trade ministers agreed to broaden the negotiations to include other issues as well. 
Responsible institutions would be in the Ministry of Industry and Trade, plus other 
institutions where relevant (e.g., the Ministry of Agriculture in the case of agricultural 
negotiations, and the Ministry of Finance in the case of service negotiations, etc.)
Deliverables: Provide technical assistance and training on multilateral trade 
agreements, including the WTO built-in agenda on agriculture and services.
APEC Action Plans. APEC continues to play a major role in facilitating transparency in 
international trade policy and in setting the agenda for trade negotiations in other forums. 
APEC economies must submit annual action plans on their trade policy measures. In 
addition, Indonesia is an active participant in other APEC activities, including the APEC 
capacity building-program. The lead agency supported is the Ministry of Industry and 
Trade. 
Deliverables: Provide input on Indonesia’s APEC action plan. Support the 
Government’s participation in other APEC activities as requested. 
Anti-Dumping and Safeguards. Indonesia has introduced its own regulations on the use of 
antidumping actions against other countries. Regulations on the use of safeguards are also 
now being developed. These regulations are in conformance with WTO rules, but do not 
always reflect international best practices. For example, the regulations tend to favor the 
parochial interests of industries seeking protection and do not take into account the wider 
interests of society. The lead agency supported is the Ministry of Industry and Trade.
Deliverables: Develop recommendations for administrative procedures reflecting 
international best practices in the use of anti-dumping and safeguard measures or two 
similar activities as judged by the CTO. 
Foundations for Competitive Markets and Competitive Industries
Telecommunications Regulatory Reform. Because of the rapid advancement in 
information technologies, Indonesia has passed a new telecommunication Law and is 
undertaking steps to reform its telecommunications sector. Major goals are the development 
of new telecommunications infrastructure, the development of competitive markets for 
enhanced and basic telecom services, and the development of new business opportunities for 
small and medium size enterprises. The Government is now in the process of developing 
decrees to implement the Law, including decrees on licensing, the number of 
telecommunications providers, interconnection, pricing, universal service, and other issues 
as required by the Law. The lead responsible institution is the Ministry of Communications.
Deliverables: Provide assistance on international best practices for the implementation 
of Indonesia’s new telecommunications Law, the development of a modern regulatory 
system for telecommunications, and the establishment of an independent regulatory 
authority.
Annex B-9
Trade and Industrial Development
Export Performance and Related Policies. The Indonesian export sector has had to make 
major adjustments as a result of the economic crisis, and there are concerns about 
Indonesia’s anemic economic performance and whether it can lead the economic recovery. 
For informed policy making, Government officials need current information on the export 
sector and factors influencing exports. The lead counterpart agency is the Ministry of 
Industry and Trade. 
Deliverables: Provide an in-depth analysis of the factors impacting Indonesia’s trade 
performance.
Respond to short-run staff requests and prepare speech materials, as requested.
MOIT Domestic Trade Advisor
Competition Policy and Deregulation- Assist with the development of legislation and 
supporting institutions at the national level that will help ensure fair trade and
competition for all parties in an increasingly deregulated economic environment.
The development of a competitive and fair trading environment represents an important
foundation for future social and economic development in Indonesia. The Domestic
Trade Advisor will provide economic analysis and reports, short-term technical
assistance and training to support the development of policies that promote economic
growth through deregulation, competition and greater private sector participation.
Deliverables: 1. Policy memoranda, papers as requested 
2. Training seminars/workshops
Decentralization and Domestic Trade – Monitoring the impact of regional autonomy 
upon domestic trade and the business climate at the local level. At the national level, 
development of appropriate legislation and institutions to ensure free internal trade 
in the decentralizing era.
By bringing government 'closer to the people' decentralization brings with it the opportunity
for more efficient and accountable government. However, decentralization also brings with
it the threat of uncoordinated setting of taxes, and the use of discriminatory measures such
non-tariff barriers to favor locals over outsiders. In the current fiscal climate, taxes on trade
are particularly worrisome as they work to undermine national economic integrity and
typically drive a wedge between farm gate and wholesales prices thereby depressing
agricultural incomes. 
Annex B-10
Effort is required to monitor how decentralization is impacting upon business and trade.
Local legislation needs to be reviewed and rescinded if necessary. National laws and
institutions need to be further developed to ensure free, open and competitive
internal markets in the decentralizing era.
Deliverables: 
1. One or more regional studies on the impact of decentralization upon the business
climate.
2. Frequent updates on problem local regulations (perda bermasalah)
3. Assistance for MOIT in developing a new national law on free internal trade
Conducive Local Regulations – Assistance directed at the local level to socialize
policies that promote trade and other economic activities; and to institutionalize
more effective regulatory review mechanisms as a means to prevent unnecessary 
and trade distorting local regulations.
An important means to prevent or minimize barriers in domestic trade is to socialize how 
both good and bad regulations respectively impact upon the business environment at the 
local level. An important missing ingredient in the process of developing regulations at 
the local level is the institutionalization of an effective regulatory review system. Such a 
process requires the completion of regulatory impact assessments to ensure that costs of 
regulation do not exceed the benefits and that the problem to be solved actually requires 
explicit regulation. 
Deliverables: Work with local universities, on such factors as various socialization and 
training workshops
Distribution Systems - Identification and analysis of issues and problems affecting
the distribution sector in general, and/or the distribution system for specific
commodities 
A well functioning distribution system improves the competitiveness of Indonesian
producers by allowing products to reach the market quickly at low delivery cost. An
efficient distribution system is also important in that it serves consumers by expanding
their choices and by providing better services and products at ever-lower prices. There
has been much progress in recent years in improving the Indonesian distribution system.
However many problems still remain (such as infrastructure bottlenecks, information
asymmetries and locally imposed trade barriers). An important recent focus for the
Domestic Trade Directorate General has been to use domestic commodity price data to
measure distribution efficiency. MOIT has also requested assistance in monitoring the
impact of certain events (such fuel price rises, Lebaran) upon domestic food (and other)
prices.
Deliverables: 
1. One policy study or equivalent, policy memos and training to assist in the
analysis of domestic price data.
2. Analysis and short memos on the impact of key events upon food prices
Annex B-11
Port Sector Reform - Analysis and policy assistance with regards to improving the
performance of Indonesian ports through greater private sector participation and
also in developing appropriate legislation and institutions governing port sector
affairs in the decentralizing era or an equivalent activity as judged by the CTO.
In an archipelago and essentially agrarian nation such as Indonesia the development of
efficient distribution and trade systems (both domestic and external) is very dependent
upon the transport infrastructure, in particular the port sector. The Indonesian port sector 
lacks modernization and remains largely inefficient. This is due to a general lack of
competition and private sector participation in the sector. The Ministry of
Communication has requested assistance in developing strategies for promoting private
sector investment in the sector and in developing a new decentralization consistent
national law on ports. 
Deliverables for the port activity (comparable deliverables as judged by the CTO if the
study area is changed)j: 
1. One policy study on improving private sector participation in the port sector
2. One policy study on laws and institutions governing ports in the decentralizing 
era
3. National workshop on port sector development
Industrial Competitiveness - Research and analysis of key issues affecting Indonesia’s 
industrial competitiveness.
The MOIT is currently in the process of defining a new approach to industry policy as a 
means to enhance Indonesia’s long run competitiveness. For this work activity the 
Domestic Trade Advisor will give particular attention to the efficiency of domestic 
markets as a key input to the competitiveness process. Attention may also be given to key 
sectors such as Textiles and Clothing, Footwear, Plastics and Petrochemicals, amongst 
others. Important issues that may be considered include business development services, 
taxation policy (in particular value added taxes) human resource development, domestic 
competition, access to information and technology, innovation, and the supply side 
benefits of clusters. 
Deliverables: 1) Provide input, in the form of papers and memos, to the development of 
a new industry policy vision at the MOIT
2) At least two sectoral studies.
Ad hoc requests – Respond to short run MOIT and USAID/PEG requests and
prepare speech materials as requested
This includes speeches for the Minister and senior MOIT officials, attendance at various
meetings, responding to training requests as well as a range of other activities not
captured by workplan activities 1- 4.
Annex B-12
Deliverables: 1) Memos, papers and speeches as requested
2) Attendance and participation at meetings/committees as requested
Bank Indonesia: Resident Advisor on Monetary and Exchange 
Rate Policy and Research
July 2002-June 2003
Research and Analysis and Education on Inflation and Monetary Policy. The 
resident advisor will work closely with BI staff in the Directorate for Research on 
Economics and Monetary Policy to develop a research, analysis, and education program 
aimed at enhanced understanding of the process of inflation and methods for helping 
Bank Indonesia to bring the inflation rate, as measured by the Consumer Price Index 
(CPI) down to medium term target levels of 6-7%. This research analysis and education 
will involve monitoring of monetary aggregates (currency, base money, demand deposits, 
time deposits, M1, M2, etc.) and movement of interest rates on loans and various savings 
instruments. Research analysis, and education will seek to illuminate the processes 
through monetary policy and exchange rate policy are transmitted and the effects these 
processes have on the level and rate of change of prices. 
Research, Analysis and Education on Productivity in the Real Economy, Capital 
Formation and Inflation. The resident advisor will work closely with BI counterparts to 
establish a working group on productivity and will seek to enhance measurement of 
productivity and productivity growth in the Indonesian economy. Bank Indonesia 
presently monitors and estimates the capital stock in the Indonesian economy but has not 
looked carefully at levels and trends in productivity of capital and labor in the real 
economy. Enhanced awareness of the relationship between productivity, productivity 
growth and remuneration is essential for achieving price stability in Indonesia. This 
activity will seek to adopt research methodologies presently used by other Central Banks 
in monitoring productivity and productivity change, including the Federal Reserve.
Coordination of Short-term Technical Assistance and Development of a Regular 
Research Seminar Program. The resident advisor will work closely with other donors, 
the academic and business community to bring a variety of high-quality economic 
research to the attention of counterparts in Bank Indonesia and, collaboratively, to help 
improve the research environment in Bank Indonesia. The objective will be to establish a 
regular, on-going research seminar program with voluntary attendance and participation 
by BI researchers.
Assist Bank Indonesia Publications Programs. The Resident Advisor will assist 
counter parts in Bank Indonesia in improving their English Publications on economic and 
monetary policy affairs. He will assist in editing work on BI's annual report and related 
publications as requested.
Deliverables 
Annex B-13
Recurring regular analyses and training provided informally to Bank Indonesia staff. 
Three technical reports will be prepared in relationship to Activities One and Two above. 
Seminar notes will be collected for dissemination as part of Activity Three above.
Small Scale Adviser, Bank Indonesia and Other Institutions
Bank Indonesia
Both Micro and Small and Medium Enterprises (SMME) are critical in Indonesian 
development. Both in Indonesia, and the world as a whole, a new paradigm has emerged 
for SME promotion. This paradigm is based on the realization that efficient SMME will 
do well in competitive markets and that their primary need is access to those markets. In 
SMME finance the paradigm involves the development of financial markets and 
institutions not targeted, subsidized credit. The work program of the Adviser is directed 
to three government clients who determine much of the framework for SMME in 
Indonesia: Credit Bureau (BKr) and Rural Banking Directorate (DBPR) of Bank 
Indonesia (BI) and the State Ministry for Cooperatives and Small Enterprise 
(MennegKop).
A. In the case of BKr training and research are designed to assist the transition to the 
new paradigm as follows:
1. In House Courses on SME Finance Research Methodology, Rural 
Finance, and SME Policy.
2. Socialization Seminars with regional banks and publics to promote SMME 
lending.
3. Research on the factors influencing Commercial Bank Lending.
B. In the case of DBPR, ongoing and new activities include:
1. Research on Best Practices for Bank Perkreditan Rakyat (BPR), rural 
banks.
2. Research, advice, and support for dialogue on regulation of nonblank 
microfinance institutions, the licensing and promotion of new BPR, 
improved BPR information systems, improved external audit of BPR, and 
linkage of BPR with more general financial markets (especially through 
the creation of a rating bureau).
3. Research on regional patterns in SMME finance, which should serve as 
raw material for regional approaches to SMME finance.
4. Joint work with USAID funded entities such as Asia Foundation on 
specific regional microfinance initiatives.
C. Other work will be with other sections of BI as follows:
1. Coordination of the Short Term Advisory work on HRD/Training for bank 
supervision.
2. Assistance to the Directorate for Licensing and Information on the 
proposed credit bureau and other issues.
3. Assistance to the Transition Team on the development of BI’s regional 
offices.
4. Assistance to the Shariah Banking Bureau.
Annex B-14
D. The activities with MennegKop are more tentative because they depend on 
several decisions by USAID/Jakarta but include as follows:
1. Research on the regulation and promotion of savings and loan 
cooperatives and the impact on them of regional autonomy.
2. Research on subcontracting/partnership between SMME and large 
industry as a means for their promotion.
3. Other potential work includes that on small debt resolution, revision of 
SMME legislation, and the impact of government activity on SMME.
Deliverables: Incumbent will provide a final report addressing the research results, 
the analysis underlying the research, the recommendations that result and the 
rationale for those recommendations. The research, analysis, and assistance 
activities will also be reported to government officials through a national seminar 
that the incumbent will organize to consider findings and generate support for policy 
follow through. Policy advice is typically documented in policy memoranda to 
decision makers, as well frequently by participation and presentations to national or 
regional seminars for which there is always final documentation. Incumbent is 
committed to completing three policy memoranda and five presentations to national 
or regional seminars. Finally, much of the collaborative work is culminated in 
seminars/workshops/meeting and which participants resolve next steps and again are 
documented both in published proceedings (though these are occasionally not 
available to the general public if the authorities restrict their dissemination) and in a 
written Notulen (or summary report). Incumbent will draft or assist in the drafting of 
at least five Notulen. Incumbent is to persist to seek enactment or promulgation of 
three pieces of legislation or (more typically) regulation on the administrative or 
provincial level) or formal institutional initiatives (documented in the government 
case by administrative legislation, and in private cases by contracts, memoranda of 
understanding, or similar documents.)
III. Management, ICT, and Grants Management
Expert on Assistance to Information, Communications and 
Technology Activities (ICT) including the Ministry of Communications 
and Information, a short-term position financed by converting short-term TA. 
Small Medium Enterprise (SMEs) Development 
Assist Comm-Info and USAID SME development efforts with policy formulation and 
coordination on the use of ICTs by SMEs to improve efficiency, productivity, access to 
market, technology, capital and business services assistance in Indonesia by the 
development of applications and linkages with local and foreign partners and in 
coordination with the government and private sector associations, including a) consensus￾building on priorities and strategy on use of ICTs by SMEs with other USAID partners; 
Annex B-15
b) identification of specific technical assistance to national and regional industry 
associations, for example within West Java/Bandung region.
Private Sector Opportunities in ICT Activities
Assist the newly established the State Ministry of Communications and Information in 
facilitating the implementation of the ICT Action Plan, with particular emphasis on those 
activities that provide increased private sector participation in ICT activities. Conduct 
two studies of on the best techniques for carrying out improved strategies for private 
sector leadership in ICT Action Plan implementation..
Ad-Hoc Coordination and Policy Work 
(1) Take a leadership role as appropriate in efforts to encourage private sector leadership 
of ICT activities in Indonesia.
(2) Coordinate, organize and arrange workshops, conferences or other special events on 
behalf of the State Ministry and USAID as requested; help coordinate the Donor to 
Indonesia Group on ICT, ICT Mission Team and ICT Working Group,
(3) Respond to ad hoc ICT-related requests from the Ministry as requested in fulfilling its 
responsibilities as the GOI's executive body for the development and implementation 
of ICT in Indonesia,
(4) Respond to ad hoc ICT-related requests from the Indonesian Telematics (ICT) 
Coordinating Team (Team Koordinasi Telematika Indonesia) as requested in 
fulfilling its responsibilities as the GOI's advisory (and monitoring) body for the 
development and implementation of the ICT Action Plan,
(5) Assist with the development of surveys/studies supporting policy analysis leading to 
recommendations and institution-building for the State Ministry as required.
Deliverables: 
Participate on the USAID ICT Mission team and ICT Working group. 
Design and prepare a strategy for follow up for the ICT action plan in accordance with 
USAID ICT Mission team priorities, and seek opportunities to encourage the GOI to 
implement that strategy.
Design and prepare a consensus strategy for USAID ICT usage by SMEs. Seek 
acceptance in implementing this strategy from the GOI in collaboration with other 
USAID SME activities, both inside and outside the Nathan Checchi consortium.
Design and prepare a consensus strategy for ICT development in West Java consistent 
with the USAID West Java working group.
Grants Advisor/Project Administrator
The Nathan-Checchi consortium grants activity is designed to contribute to Indonesia's 
economic growth by strengthening economic policies and practices associated with 
Annex B-16
increased openness to international trade and investment and strengthened domestic 
economic competition. The grants promote sustainable linkages between U.S. and 
Indonesian institutions whose work is focused on economic policy issues. The principal 
tasks of the Grants Advisor/Project Administrator are as follows: 
Solicit New Grants/ Process Grant Applications/ Negotiate and Execute New Approved 
Grants: Subject to availability of funding and a clear decision to proceed from the CTO,
the Contractor shall undertake the solicitation of new grants in the extension year (FY 02 
through 03). In the wake of the decision, the Contractor will compile information on 
suitable research organizations, universities, government departments, public and private 
think tanks, both Indonesian and American, that may be interested in the PEG program. 
The Contractor will inform such organizations about the PEG program. The Contractor 
shall prepare a formal solicitation document and conduct a solicitation process for the
selection of new grantees under the PEG program. The Contractor will receive guidance 
each year on areas of programmatic emphasis from the CTO, the Steering and Technical 
Committees and the Economic Leadership Council.
The Contractor will accept and perform an initial technical and financial evaluation and 
rank order all proposals received in response to each grant solicitation in accordance with 
criteria established by USAID and the Government of Indonesia. The Contractor will
submit recommended successful applications for review and approval by a technical 
committee formed under USAID procurement procedures that may be the joint 
USAID/GOI Technical Committee responsible for the economic growth program. The 
CTO shall notify the Contractor, in writing, of the approved applications.
Based on the recommendations of the Technical Committee, as confirmed in writing by 
the CTO, the Contractor will negotiate and execute grants with the selected applicants. 
The Contractor will assure that these grants are in full agreement with all relevant USAID 
rules and regulations. USAID will retain the right of review of these grants to determine 
if they are in compliance with USAID policies and to reject any such grants that are not 
in conformity with USAID regulations.
Manage Partnership Grants: The Contractor shall review work plans, monitor progress 
toward results, and administer all grants it has awarded or made recommendations for 
award to USAID. The Contractor shall determine if all such grants it has awarded are 
performing and meeting goals and benchmarks as agreed. Contractor shall actively assist 
USAID regarding grants USAID ECG has awarded. All performance problems 
Contractor identifies regarding all such grants (awarded and recommended) must be 
addressed and the Contractor must ensure that there is complete and timely 
communication with the PEG CTO on all major issues. The Contractor is responsible for 
ensuring that all performance reports, as agreed to under each grant it has awarded, are 
received in a timely fashion. For grants on which contractor has made recommendations, 
Contractor shall assist USAID in obtaining these reports. The Contractor shall review on 
a timely basis the progress reports of these grantees in order to have an overall 
understanding of the entire range of PEG grants and the goals and objectives that they are 
Annex B-17
seeking to achieve. Problems and opportunities arising during these reviews shall be 
brought directly to the appropriate grantee and the appropriate grant CTO. 
Audits: In addition to the audit requirements incorporated in the contract clause FAR 
52.215-2, the contractor shall implement the audit requirement for the grants awarded 
under this contract. The contractor will incorporate the requirement for performance of 
the audit in grant agreements. The statements of work for all planned audits of grants 
shall be coordinated with USAID, including the CTO. If the grants are awarded to U.S. 
for-profit grantees, the audit of those grants will be performed by their cognizant audit 
agencies. If the grantees are U.S. non-profit organizations, their audits will be covered by 
the provisions of OMB Circular A-133. If the grantees are non-U.S. not-for-profit 
organizations, those audits will be conducted preferably by auditing firms approved under 
the Recipient Contracted Audit (RCA) program of the Mission.
Small Grants: Provide small grants to Indonesian NGO's, civil society groups and 
research institutions to help them conduct activities and programs to advance Indonesia's 
financial recovery, sustainable and equitable economic development and economic issues 
that arise during the course of Indonesia’s efforts to carry out decentralization. Activities 
funded by the small grants should promote sound economic policies and institutions, 
especially at the local level, help construct a legal and regulatory framework that is 
conducive to economic growth particularly by small and medium businesses, help 
provide open access to economic opportunity for all Indonesians, and support 
knowledgeable public participation in economic policy decision making. 
Under the supervision of the COP, small Grant awards will be administered by the PEG 
Grants Manager and support staff. Management includes the direct purchase of goods, 
services or intellectual products from individuals or companies on behalf of the award 
recipient. The strategy is to relieve the award recipient of the burden of managing funds 
and completing stringent procurement procedures required by USAID, even under the 
USAID simplified grant award format. The small grants activities will be concentrated 
on major regional issues, including 1) investment opportunities, 2) employment 
opportunities and 3) interregional trade 
Other Administrative Tasks. The grants advisor/project administrator is to carry out 
other supportive/administrative tasks as assigned by the COP.
Deliverables:
At least 20 small grants awarded. All existing grants, both as issued by the Nathan 
Checchi consortium and by the USAID ECG team administered consistently with USAID 
standards.
Chief of Party
This position provides leadership, direction. and coordination of Nathan-Checchi 
consortium activities, principal liaison with USAID, and reporting and technical work as 
Annex B-18
required. The nature and duties for this position are substantially the same as in past 
SOWs for this activity. 
Annex B-19
Budget for July 1, 2002 to June 30, 2003
11.5 full time expatriate advisors@ $300,000 per person per year $3,450,000
18 person months of short-term TA at $30,000 per month $450,000
Office space and related administrative costs. $130,000
20 small grants at $20,000 per grant $400,000
Training activities $250,000
Long term grant spending, $350,000
Annex C- 1
Annex C 
List of Individuals Contacted and Interviewed 
OFFICE
NO NAME ADDRESS PHONE/FAX/MAIL
1.
MEYERS, Terry
Mission Director
USAID
American Embassy
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 344-22111 F: 380-6694
E-mail: tmeyers@usaid.gov
2. DEUSTER, Paul
Economic Growth Team Leader
USAID
American Embassy
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 343-59418 F: 380-6694
E-mail: pdeuster@usaid.gov
HP: 0812-930-6948
3. ATEN, Robert H
Senior Public Finance Advisor
USAID
American Embassy
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 343-59000 Ext. 9230 F: 380-6694
Email: bobaten111@aol.com or 
raten@usaid.gov
HP: 0816-129-0666
4. DINH, Quan X
Senior Economic Advisor
USAID
American Embassy
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 343-59000 F: 380-6694
E-mail: qdinh@usaid.gov
HP: 0811-925-291
5. AJI, Firman B
Team Leader
USAID
American Embassy 
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 343-59000 F: 380-6694
E-mail: faji@usaid.gov or 
fbaji@hotmail.com
HP: 0811-999-885
6. O’CONNOR, Tim
Deputy Director Economic Growth Team
USAID
American Embassy
Jl. Medan Merdeka Selatan 3-5, Jakarta 10110
P: 343-59483 F: 380-6694
E-mail: toconnor@usaid.gov
HP: 0812-921-1512
7. SOENDJOTO, Raya R
Office of Economic Growth
USAID
Jl. Merdeka Selatan No. 3, Jakarta 10110
P: 343-59000 F: 380-6694 
E-mail: rsoendjoto@usaid.gov
8. SIMAUW, Hans
Contract Office
USAID
Jl. Merdeka Selatan No. 3, Jakarta 10110
P: 343-59000 F: 380-6694 
E-mail: jsimauw@usaid.gov
9. LUBIS, Lanna W.
Activity Manager Financial Institutions Office 
of the Economic Growth
USAID
Jl. Merdeka Selatan No. 3, Jakarta 10110
P: 343-59000 Ext. 2314 F: 380-6694
E-mail: 
INTRNET(Llubis@USAID.GOV)
10. RUCKER, Bob USAID/PSC
Jl. Merdeka Selatan No. 3, Jakarta 10110
P: 343-59000 
11. CALLISON, C. Stuart 
Chief of Party Development Economist
PEG CENTRAL OFFICE
 Suite 304, Setiabudi Atrium, Plaza Setiabudi 
Jl. HR. Rasuna Said Jakarta 12920
P: 520-1047 F: 521-0311 
E-mail : stu@pegasus.or.id
12. POVOLNY, Jeffrey J.
Grants Manager
PEG CENTRAL OFFICE
Suite 304, Setiabudi Atrium, Plaza Setiabudi 
Jl. HR. Rasuna Said Jakarta 12920
P: 520-1047 F: 521-0311 
E-mail : jeff@pegasus.or.id
13. SULAIMAN, Idris
ICT Coordinator & Economic Advisor
PEG CENTRAL OFFICE
Suite 304, Setiabudi Atrium, Plaza Setiabudi 
Jl. HR. Rasuna Said Jakarta 12920
P: 520 -1047 F: 521-0311 
E-mail : idris@pegasus.or.id
14. SIMANDJUNTAK, Norma
Training/Administrative Assistant
PEG CENTRAL OFFICE
Suite 304, Setiabudi Atrium, Plaza Setiabudi 
Jl. HR. Rasuna Said Jakarta 12920
P: 520-1047 F: 521-0311 
E-mail: Norma@pagasus.or.id
HP: 0816-740-652
15. MCPHELIM, Patricia S
Vice President
CHECCHI
1899 L St., N.W. Suite 800
Washington, D.C. 20036-3804
P: 202-452-9700 F: 202-466-9070
E-mail: 
pmcphelim@checchiconsulting.com
16. GRAEF, P. Lance. 
Vice President International Trade Policy
NATHAN Associates Inc
Two Colonial Place, 2101 Wilson Boulevard
Suite 1200, Arlington, Virginia 22201
P: 703-516-7718 F: 703-351-6162
E-mail: igraef@nathaninc.com
17. MENON, Ashok R
International Trade Policy
NATHAN Associates Inc
Two Colonial Place, 2101 Wilson Boulevard
Suite 1200, Arlington, Virginia 22201
P: 703-516-7714 F: 703-351-6162
E-mail: amenon@nathaninc.com
Annex C- 2
OFFICE
NO NAME ADDRESS PHONE/FAX/MAIL
18. MERRILL N. David
Senior Vice President
International Programs
NATHAN Associates Inc
Two Colonial Place, 2101 Wilson Boulevard
Suite 1200, Arlington, Virginia 22201
P: 703-516-7810 F: 703-351-6162
E-mail: dmerrill@nathaninc.com
19. JAMES, William (Ted) 
Senior International Economist
PEG / MOIT
Block I, 4th floor Ministry of Industry & Trade
 Jl. Ridwan Rais 5 Jakarta 10110
P: 385-8192 F: 385- 8192 
 E-mail wtjames@pegasus.or.id
20. MAGIERA, Stephen L
International Trade Specialist
PEG / MOIT
Block I, 4th
 floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 385-8192 F: 385-7758
E-mail: smagiera@pagasus.or.id
21. RAY, David J.
Domestic Trade Advisor
PEG / MOIT
Block I, 4th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 348-33813 F: 385-8192
E-mail: dray@pegasus.or.id
22. BIRD, Kelly
Economist
PEG / BAPPENAS
 Jl. Sunda Kelapa No. 9 Jakarta 10310
Entr. From Jl. Kusumaatmaja
P: 319-06515 F: 319-06514
 E-mail : kbird@pegasus.or.id
23. MANNING, Chris
 Economist
PEG / BAPPENAS
 Jl. Sunda Kelapa No. 9 Jakarta 10310
Entr. From Jl. Kusumaatmaja
P: 3190-6515 F: 319-0 6514 
E-mail cmanning@pegasus.or.id
24. WALLACE, William
Economist
PEG / BAPPENAS
 Jl. Sunda Kelapa No. 9 Jakarta 10310
Entr. From Jl. Kusumaatmaja
P: 3190-6515 F: 319-0 6514
 E-mail : wwallace@pegasus.or.id
25. TIMBERG, Thomas A
Small Scale Credit Advisor
PEG / BI
5
th Floor Bank of Indonesia 
Jl. Kebon Sirih 82-84 Jakarta 10010
P: 381-8478 (Direct) F: 386-6073
E-mail : ttimberg@pegasus.or.id
26. BUEHRER, Timothy 
Macro Economist
PEG / Ministry of Finance (MOF)
 Gedung Utama, 4th Floor Room 401-A
Jl. Lap. Banteng 2-4 Jakarta 10710
P: 385-2142 F: 345-3710 
E-mail : tbuehrer@pegasus.or.id
27. DJAJA, Komara 
Deputy Coordinating Minister for Economic 
and Finance
Ministry of Finance (MOF)
 Gedung Utama, 4th Floor Room 402-A
Jl. Lap. Banteng 2-4 Jakarta 10710
P: 352-1976
28. WARJIYO, Perry
Deputy Director Economic Research and 
Monetary Policy
Bank Indonesia
Jl. MH. Thamrin No. 2
Jakarta 10110
P: 381-8171 F: 380-00394
E-mail: perry_w@bi.go.id
29. SALAM, Abdul
Director, Directorate of Rural Bank 
Supervision
Bank Indonesia
Jl. Kebon Sirih No. 82-84, Jakarta 10010
P: 381-8733 F: 231-1177
30. JOSEPH R.P., Charles
Economist
Bank Indonesia
Gedung B. 19th Floor
Jl. MH. Thamrin No. 2, Jakarta 10110
P: 381-8383 F: 350-2030
E-mail: cjoseph@bi.go.id
31. NASUTION, Anwar
Senior Deputy Governor
Bank Indonesia
Jl. MH. Thamrin No. 2, Jakarta 10110
P: 350-1983 F: 350-1924
E-mail: anwarn@bi.go.id
32. HUTAPEA, Bun Bunan E.J.
Director Internal Finance Department
Bank Indonesia
C Building, 10
th Floor
Jl. MH. Thamrin No. 2, Jakarta 10110
P: 231-1438 F: 350-1941
E-mail: bun_bunan@bi.go.id
33. SAMOSIR, Alfons
Deputy Director for International Trade 
Defence - WTO
MOIT
Block II, 7th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 384-0139 F.: 384-0139
E-mail: samosiralfon@usa.net
34. DJUMARMAN
Secretary to the Directorate General of 
Domestic Trade
MOIT
Block I, 6th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 385-8211 F: 385-8211
E-mail:
djumarman@pusdata.dprin.go.id
35. AGUSTINA, Sri
Head of Planning and Programming
MOIT
Block I, 6th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 385-8211 F: 385-8211
Annex C- 3
OFFICE
NO NAME ADDRESS PHONE/FAX/MAIL
36. SOETANTO, Herry
Director for Multilateral Cooperation
MOIT
Block I, 7th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 384-0139 F: 384-0139
E-mail: dirkm-klipi@dprin.go.id
37. AC. YAMANAH
Deputy Director for IPR & Service WTO
MOIT
Block II, 7th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 384-0139 F: 384-0139
E-mail: yamanahac@usa.net
38. WAHYUDI, Benny
Secretary Agency for Research and 
Development of Industry and Trade
MOIT
Block I, 10th floor Ministry of Industry & Trade
Jl. Ridwan Rais 5 Jakarta 1011
P: 385-7354 F: 385-7580
E-mail: ses-bppip@dprin.go.id
39. WIROKARTONO, Soekarno
Deputy Chairman of Fiscal and Monetary
BAPPENAS
Madium Bldg. 5th Floor, Jl. Taman Suropati No. 2
Jakarta Pusat 10310
P: 334-259 F: 334-259
40. WIDIANTO, Bambang
Director of Manpower
BAPPENAS
2A Bldg. 5th Floor, Jl. Taman Suropati No. 2
Jakarta Pusat 10310
P: 310-1988 F: 310-1988
E-mail: bwidianto@bappenas.go.id
41. SURYABRATA, Adi Wismana
Director for State Budget and Monetary 
Analysis
BAPPENAS
Madium Bldg. 5th Floor, Jl. Taman Suropati No. 2
Jakarta Pusat 10310
P: 336-207 F: 314-3773
E-mail: wismana@bappenas.go.id
42. SHINJI, Yoshioka
Economist, from Economic Planning Agency
BAPPENAS (JICA)
Main Building, 2nd floor, Jl. Taman Suropati No. 2
Jakarta 10310
P: 391-5223
E-mail: yoshioka@link.net.id
43. McQUADE, Laura A.
Regional Director
Financial Service Volunteer Corps (FSVC)
Wisma GKBI, 39th Floor Suite 3901
Jl. Jend. Sudirman No. 28
P: 5799-8118 F: 5799-8080
E-mail: Imcquade@fscv.org
HP: 0817-1899-88
44. WOLFE, Chad L.
Program Officer
Financial Service Volunteer Corps (FSVC)
Wisma GKBI, 39th Floor Suite 3901
Jl. Jend. Sudirman No. 28
P: 5799-8118 F: 5799-8080
E-mail: cwolfe@fscv.org
HP: 0812-960-6334
45. FENTON, John R.
Chief of Party
KPMG
Plaza Setiabudi 2 Buiding, 2nd Floor Suite 207D
Jl. H.R. Rasuna Said Kav. 62, Kuningan
P: 520-6646 F: 520-6678
E-mail: jrfenton@usa.net
46. RAHARDJO, Tulus
Deputy Director General for 
Telecommunication and Information 
Technology
DITJEN POSTEL
Gedung Sapta Pesona, 5th Floor
Jl. Merdeka Barat No. 17, Jakarta
P: 383-5893 F: 3860-805
E-mail: tulus@postel.go.id
47. KARIM DITJEN POSTEL
Gedung Sapta Pesona, 5th Floor
Jl. Merdeka Barat No. 17, Jakarta
P: 383-5893 F: 386-0805
48. BURMAN, John DITJEN POSTEL
Gedung Sapta Pesona, 5th Floor
Jl. Merdeka Barat No. 17, Jakarta
P: 383-5893 F: 386-0805
49. GAJEWSKI, Peter
Senior Advisor House of Representative 
Republic of Indonesia (DPR-RI)
IRIS/LPEM/UI
Jl. Latuharhari No. 6
Menteng, Jakarta 10320
P: 390-2986 HP: 0811-805-918
E-mail: peterg@iris.or.id
50. NELSON, Bernard
Senior Advisor 
BPPN
Wisma Bank Danamon, 24th floor
Jl. Jend. Sudirman Kav. 45-46
Jakarta 12930
P: 577-2776 Ext. 1618 F: 577-0803
E-mail: nelson@bppn.go.id
HP: 0812-804-8153
51. SOETRISNO, Noer
Vice Chairman
SMECDA
Jl. Jend. Gatot Subroto
Jakarta Selatan 12780
P: 794-2721, 798-8045 Ext. 25
E-mail: smecda@hotmail.com
52. HENDRIANTO
International Cooperation Division
SMECDA
Jl. Jend. Gatot Subroto
Jakarta Selatan 12780
P: 794-2721 F: 794-2721
E-mail: smecda@hotmail.com
53. AGEE, James L. (III)
Project Director 
ELIPS
5
th Floor, Gedung Kumdang
Jl. H.R. Rasuna Said, Jakarta
P: 526-7055 F: 526-7054
Annex C- 4
OFFICE
NO NAME ADDRESS PHONE/FAX/MAIL
54. BAILEY E. Laura
USAID IR Consultant
2940-4 Rimrock Road
Billings, MT 59102 USA
P: 61-408-069-017 (Timor)
P: 812-967-5581 (Indonesia)
E-mail: laurab@mcn.net or 
laura047@yahoo.com
55. DRUM, Bernard
Coordinator Private Sector Development
The World Bank
Jakarta Stock Exchange Building, Tower 2, 12th Floor
Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190
P: 5299-3000 F: 5299-3111
E-mail: bdrum@worldbank.org
56. LATIEF, Sarwan
Senior Advisor Economic
The World Bank
Jakarta Stock Exchange Building, Tower 2, 12th Floor
Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190
P: 5299-3000 F: 5299-3111
E-mail: klateef@worldbank.org
57. NEHRU, Vikram
Lead Economist
The World Bank
Jakarta Stock Exchange Building, Tower 2, 12th Floor
Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190
P: 5299-3000 F: 5299-3111
58. GREEN, David
Economist
Asian Development Bank
BRI II Building, 7th floor
Jl. Jend. Sudirman Kav. 44-46, Jakarta 
P: 251-2721 F: 251-2749
59. CONNORS, Kathleen
Executive Director
Amcham Indonesia
World Trade Center, 11th floor
Jl. Jend. Sudirman Kav. 29-31, Jakarta 12920
P: 526-2860 F: 526-2861
E-mail: director@amcham.or.id
60. ARDIE, Arian 
Second Vice President
British Petroleum Indonesia
C/o. Amcham Indonesia
World Trade Center, 11th floor
Jl. Jend. Sudirman Kav. 29-31, Jakarta 12920
P: 526-2860 F: 526-2861
E-mail: info@amcham.or.id
61. HESSLER, Carol
President
Mission Energy
C/o Amcham Indonesia
World Trade Center, 11th floor
Jl. Jend. Sudirman Kav. 29-31, Jakarta 12920
P: 526-2860 F: 526-2861
E-mail: info@amcham.or.id
62. NELLOR, David 
Senior Resident Representative
IMF
Bank Indonesia, Tipikal Building, 1st Bldg
Jl. MH. Thamrin, Jakarta
P: 2311-884 F: 2311-939
63. COBHAM, A S (Andy)
President Director
Corporate Country Manager
Motorola Indonesia
BRI II, 30th floor, suite 3001
Jl. Jend. Sudirman Kav. 44-46, Jakarta 10210
P: 251-3050, 575-4510 F: 571-3646
E-mail: q11478@email.mot.com
HP: 0818-748-595
64. MACPHERSON, KATHY
Resident Policy Coordinator
Canadian International Development Agency 
(CIDA)
Jl. Talang Betutu No. 2
Jakarta 10230
Menteng (Enter from Blora)
P: 391-5517 F: 391-5518
HP: 0818-992-346
Annex D
Evaluation Scope of Work
_______________________________________________________________________
AID 1420-61 (Rev'd)
1.1. TITLE:
EVALUATION OF PARTNERSHIP FOR ECONOMIC GROWTH (PEG) 
1.2. STATEMENT OF WORK
SUMMARY/BACKGROUND / OBJECTIVES
I. SUMMARY:
An evaluation is required for Partnership for Economic Growth (PEG) contract, which 
consist of three components. The components are:
ß Technical Assistance for Economic Growth (TA-EG)
ß Grants for Partnership for Economic Growth (Grants between U.S. and Indonesian 
institutions) 
ß Training (short-term seminars and conferences)
Purpose: This evaluation is to determine to the extent to which the activity is achieving its 
purposes; to compile success stories and lessons learned and to make recommendations for 
the improving the last year of PEG and for a follow on activity. 
Contract Mechanism: The evaluation will be performed under the Development Information 
Evaluation Services IQC. The intention is that the chosen contractor will field a three￾person team – two expatriate experts supported by an Indonesian expert. They will 
undertake the evaluation and submit their findings within 40 days of receipt of the task 
order. 
II. BACKGROUND: 
The “Asian Economic Crisis” and the associated political events highlighted and exposed 
serious structural flaws in Indonesian economic governance. Meaningful and comprehensive 
economic reform is essential to move the economy in the direction of efficient market-based 
decision-making. This is the key to economic progress and political stability. Many officials 
and parliamentarians lack understanding of the needs of free-market based economy. Even 
more damaging: opaque, corrupt processes, over centralization, excessive regulation, lack of 
acceptable standards of corporate governance, and a dysfunctional banking system have 
discouraged investment and all but arrested economic recovery and long term progress. 
To assist Indonesia to overcome these problems the Partnership for Economic Growth
provides long- and short-term technical advisors to a series of institutions; and grant 
assistance for partnership arrangements between US and Indonesian institutions and 
scholars. These activities seek to upgrade the extent and quality of national economic policy 
debate, improve the context in which economic policy decisions are made, and spark 
meaningful market-oriented reform.
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-2
The activity vehicles to accomplish this are exchange of information, intellectual capital, and 
analytical support to key policy-making officials in support of the economic growth, studies, 
analyses, seminars, training, public fora, and the creation of durable partnerships between 
US and Indonesian technical institutions and experts.
The activities under this contract are: 
1. Technical Assistance
TA-EG activities are located in 5 ministries and agencies of the Government of Indonesia 
(BAPPENAS, Ministry of Industry and Trade, Ministry of Cooperatives, Ministry of Justice, 
and Bank Indonesia) which play critical roles in policy formulation in international trade, 
domestic economic competition, or other issues which are the focus of the IMF-backed 
reform effort linked to the current crisis.
2. Partnership Grants
The partnership grants are to establish long-lasting relationships between America’s public 
and private institutions with counterpart groups in Indonesia to assist in formulating and 
implementing the economic policies and practices. The activity is run through the linkage 
grants that were solicited from a wide range of Indonesian-American partners who 
submitted proposals for forming long-lasting partnerships to address key policy constraints 
relevant to meeting USAID Economic Growth strategy. 
3. Training
In addition to the long-term advisory services as mentioned above, the transfer of 
intellectual capital is key to successful policy development and reform. Short-term training 
and seminars, primarily in Indonesia and the United States are encouraged in order to make 
the overall program a success.
III. EVALUATION REQUIREMENTS
General Requirements:
The contractor should undertake a broad-based assessment of to what extent the PEG 
activity is achieving its purposes, including examining relevance, effectiveness, efficiency, 
impact, and sustainability. This includes looking at the activity concept, implementation, 
management, and overall effectiveness. Among other tasks the contractor should compile 
success stories and lesson learns. The contractor should recommend improvements for the 
last year of the present PEG activities and considerations for a follow on activity.
Specific Task Elements. The following points, inter alia, should be addressed, though not 
necessarily in the order or structure below.
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-3
Efficiency. Is the contract proving to be a cost-effective means of addressing the desired 
objectives? In the opinion of the evaluators, could the progress in evidence have been 
achieved more efficiently with a different choice of activities? Could the administration of 
the contract be reconfigured to accomplish the same progress more efficiently?
Effectiveness. Assess the extent to which the nature and quality of the output and results 
have been or being produced and achieved by the contract. Has progress been made? What 
concrete accomplishments can be traced to the contract? Are the activities on target to 
achieve the design results? And if not what changes are require for that end. 
In addition to the above questions, the evaluator is expected to specifically look at the 
dissemination of findings from the PEG activity. Have best practices and lessons been 
effectively spread outside the project participants? What techniques worked best and why? 
What is recommended for future programs?
Relevance. Assess the concept and fit of the contract to the meet USAID Economic 
Growth strategic objectives and operating style. Is there consistency with the underlying 
project and/or symbiotic support to other project elements? Are the activities relevant to 
the purposes of the contract and of the underlying project? To what extent the project is 
addressing or has addressed problems of high priority, as viewed by its stakeholders?
Practicality/Adequacy of Funding. Assess the attainability of goals and objectives under the 
contract. That is, are the goals reasonable in terms of the level of resources and the activity 
design? Were there good prospects for success? Are the resources allocated to the 
contract consistent with the requirements for success at the levels foreseen in the design 
process?
Management of the contract. Has the contractor effectively structured and exercised 
management control over the activity and the commitment and disbursement of resources?
Substantial involvement of USAID. Has USAID provided appropriate and timely input in to 
project strategy and decisions?
Personnel: Have the individuals, both Indonesian and expatriate, funded under the contract 
been appropriate to the tasks at hand? 
Annual Review: Has the required joint annual GOI-USAID/I review been conducted as 
envisioned? What has been the opinion of GOI counterparts as to the value of the contract 
activities? What suggestions do they have? How should these be accommodated?
Counterpart: has the contractor in accordance with contract terms made appropriate and 
meaningful counterpart funding (in kind) available? 
Sustainability: Are the specific activities (which are open-ended by nature) and The 
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-4
underlying partnership likely to be sustained in the absence of further USAID funding? 
Have enduring institutional and personal bonds been formed between technical experts and 
US institutions with Indonesian counterparts. Will the positive changes induced by this 
project be maintained/sustained after termination of this project? 
Impact. Has the project had substantial beneficial impacts on the Indonesian policy 
decision-making process? Success stories should be compiled.
Recommendations. The evaluation will explicitly address the need for mid-term design or 
operations changes could be made to strengthen PEG for its last year, including addressing 
any questions related to the substantial involvement of USAID. It should also present 
lessons learned and recommendations for a follow on activity.
IV. TEAM COMPOSITION AND METHODOLOGY
The evaluation will be performed under the Development Information Evaluation Services 
IQC. The intention is that the chosen contractor will field a three-person team consisting of 
two expatriates and one Indonesian. The team leader should have an advanced degree in 
economics and substantial relevant field experience with economic policy support projects 
(Phd). Country and/or region-specific knowledge and experience with economic policy 
support is desirable. 
The second and third member, have the option of a legal, economic, or business professional 
background with thorough knowledge and understanding of current Indonesian legal, 
commercial and economic policy context (Phd/MBA). They should have advanced technical 
training and practical experience in the relevant fields (i.e., economics, business and legal, 
commercial, trade, public administration, economic governance, etc.) Ideally, technical 
skills should be complementary to those of the team leader.
The team will carry out the evaluation through:
ß Review of project documentation (the contract agreement, the Annual Work Plan, the 
Project Monitoring Plan, Annual Report, Quarterly report, etc.);
ß interviews with USAID staff and Indonesian counterpart personnel; with beneficiaries 
(both direct and indirect); and with knowledgeable individuals in the private sector, 
academia and other donor staff; and
ß review and assessment of a sampling of studies, reports, and analyses funded under the 
contract. 
1.3. RELATIONSHIP AND RESPONSIBILITIES
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-5
The Contractor will report to and be under the technical direction of USAID/Indonesia. 
The Contractor will work closely with Ms. Raya Soendjoto, Mr. Robert Aten, Mr. Firman 
Aji, and other staff of the Office of Economic Growth (ECG). 
1.4. REPORTS AND DELIVERABLES
The evaluation team shall be expected to:
® Present an initial evaluation plan to USAID. Specifically, upon arrival, the evaluation 
team will meet with USAID Economic Growth Team Leader or his designee and the 
USAID/CTO and provide its proposed evaluation plan and methodology. 
® Prior to departure, the evaluation team will brief the Economic Growth Team Leader 
and/or his designees and the USAID/CTO to present the team’s major findings, 
conclusions, and recommendation. A draft Executive Summary (including key 
findings and recommendations), an Outline of their report, the lessons learned and 
success story, if any, will be provided. 
¨ A final written report, which details the team’s findings, should be provided to 
USAID/Jakarta within 10 working days following completion of the in-country work. 
Ten hard copies should be sent to the USAID Cognizant Technical Officer, Mr. Robert 
Aten, USAID/ECG, and Jakarta, Indonesia. At the same time an electronic copy in 
Microsoft Words format shall be emailed to rsoendjoto@usaid.gov. The report will
include all the specified requirements of the SOW, including success stories, lessons 
learned and recommendations for the present and future activities.
® A copy of the final written report should also be sent to PPC/CDIE/DI, 
USAID/Washington to be put in the USAID library and database.
® Report studies/proceedings of this evaluation should be properly marked in accordance 
with AIDAR, Contract Clause 752.7034, Acknowledgement, and Disclaimer. 
1.5. REPORTING AND TECHNICAL DIRECTIONS
Technical Directions during the performance of this task order shall be provided by the
Cognizant Technical Officer (CTO) for this task order who is Ms. Raya Soendjoto from 
ECG - SO 497-011 USAID/Indonesia or her designee, as stated in Block 5 of the cover
page pursuant to Section G.1.b. of the contract.
Further, 
ß The team will meet with its USAID liaison officer once per week (or as otherwise 
agreed to by that officer) and provide a brief report of activities and progress.
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-6
ß In-country travel plans must be approved by USAID, in advance. Travel to insecure 
areas is discouraged and unlikely to be approved.
ß The team will be responsive to USAID suggestions, and will observe any guidance given 
as to political sensitivities, progress reporting, and in-country travel restrictions.
1.6. TERM OF PERFORMANCE
a. Work shall commence on the date noted in Block 7 of the cover page. The estimated
completion date is reflected in Block 8 of the cover page.
b. Subject to the ceiling price of this task order and the prior written approval of the CTO 
(see Block No. 5 on the Cover Page), the contractor may extend the estimated
completion date, provided that the extension does not cause the elapsed time for
completion of the work, including the furnishing of all deliverables, to extend beyond 30 
calendar days from the original estimated completion date. Prior to the original
estimated completion date, the contractor shall provide a copy of the CTO's written
approval for any extension of the term of this task order to the Contracting Officer; in
addition, the contractor shall attach a copy of the CTO's approval to the final voucher
submitted for payment.
c. It is the contractor's responsibility to ensure that the CTO- approved adjustments to the 
original estimated completion date do not result in costs incurred that exceed the ceiling 
price of this task order. Under no circumstances shall such adjustments authorize the
contractor to be paid any sum in excess of the task order.
d. Adjustments that will cause the elapsed time for completion of the work to exceed the
original estimated completion date by more than 30 calendar days must be approved in
advance by the Contracting Officer.
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-7
B. KEY PERSONNEL.
The key personnel identified below are considered essential to the work being performed. Unless
otherwise agreed to in writing by the Contracting Officer, the Contractor shall be responsible for
providing such personnel for performance at the level-of-effort and for the term required. Failure to 
provide key personnel designated below may be considered nonperformance by the Contractor unless 
such failure is beyond the control, and through no fault or negligence of the Contractor. The
Contractor shall immediately notify the Contracting Officer and the CTO of any Key Personnel's
departure and the reasons therefore. The Contractor shall take steps to immediately rectify this
situation and shall propose a substitute candidate for each vacated position along with a budget
impact statement in sufficient detail to permit evaluation of the impact on the program. The
Contractor without the written consent of the Contracting Officer shall make no replacement of
personnel whether provided in advance or by ratification.
The Key Personnel for this task order are as follows:
Name Position Title 
1. Mr. H. Wheeler Chief-of-Party
2. Mr. F. Parlindungan Financial Specialist
 
C. Subject to the ceiling price established in this delivery order and the prior written approval 
of the CTO, the contractor may adjust the number of workdays actually employed in the 
performance of the work by each position specified in this order. 
The contractor shall attach a copy of the CTO's approval to the final voucher submitted 
for payment.
D. It is the contractor's responsibility to ensure that the CTO-approved adjustments to the 
workdays ordered for each functional labor specialist do not result in costs incurred which 
exceed the ceiling price of this delivery order. Under no circumstances shall such 
adjustments authorize the contractor to be paid any sum in excess of the ceiling price.
NOTE: The Contractor will not be paid any sum in excess of the ceiling price or obligated 
amount, whichever is less, without the written approval of the Contracting Officer.
1.9. USE OF GOVERNMENT FACILITIES AND PERSONNEL
(a) The contractor and any employee or consultant of the contractor is prohibited from 
using U.S. Government facilities (such as office space or equipment), or U.S. 
Government clerical or technical personnel in the performance of the services 
specified in the delivery order, unless the use of Government facilities or personnel is 
authorized in advance, in writing, by the Contracting Officer.
(b) If at any time it is determined that the contractor, or any of its employees or 
consultants, have used U.S. Government facilities or personnel either in performance 
of the contract itself, or in advance, without authorization in, in writing, by the 
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-8
Contracting Officer, then the amount payable under the contract shall be reduced by 
an amount equal to the value of the U.S. Government facilities or personnel used by 
the contractor, as determined by the contracting officer.
(c) If the parties fail to agree on an adjustment made pursuant to this clause it shall be 
considered a "dispute" and shall be dealt with under the terms of the "Disputes" 
clauses of the contract.
1.10. DUTY POST
The Duty Post for this task order is Indonesia.
1.11. ACCESS TO CLASSIFIED INFORMATION
The contractor will not have access to classified information.
1.12. LOGISTIC SUPPORT
The contractor shall be responsible for all logistical support needed to successfully 
complete the Task Order.
1.13. WORKWEEK
The Contractor is authorized a 6 day workweek, while in Indonesia, with no overtime or 
premium pay. 
 
1.14. AUTHORIZED GEOGRAPHIC CODE
The authorized geographic code for procurement of goods and services under this order is 
000 (United States) and Cooperating Country.
1.15. ORGANIZATIONAL CONFLICT OF INTEREST: PRECLUSION FROM 
IMPLEMENTATION CONTRACT.
In reference with Section H.5. of the basic contract No AEP-I-00-00-00025-00 and 
Contract Information Bulletin No 99 - 17 of August 17, 1999 the following clause is made 
applicable to this task order:
This task order calls for the Contractor to furnish important services in support of 
evaluation of the Partnership for Economic Growth Program. In accordance with the 
principles of FAR Subpart 9.5 and USAID policy, THE CONTRACTOR SHALL BE 
INELIGIBLE TO FURNISH, AS A PRIME OR SUBCONTRACTOR OR 
Contract OUT-AEP-I-800-00-00025-00 Task Order # 800
Under IQC No. AEP-I-00-00-00025-00
__________________________________________________________________
Annex D-9
OTHERWISE, IMPLEMENTATION SERVICES UNDER ANY CONTRACT OR 
TASK ORDER THAT RESULTS IN RESPONSE TO FINDINGS, PROPOSALS, OR 
RECOMMENDATIONS IN AN EVALUATION REPORT WRITTEN BY THE 
CONTRACTOR. THIS PRECLUSION WILL APPLY TO ANY SUCH AWARDS 
MADE WITHIN 18 MONTHS OF USAID ACCEPTING THE REPORT, unless the 
Head of the Contracting Activity, in consultation with USAID's Competition Advocate, 
authorizes a waiver (in accordance FAR 9.503) determining that preclusion of the 
Contractor from the implementation work would not be in the Government's interest. 
Annex E-1
Annex E 
List of Publications Generated
Information obtained from www.pegagus.or.id/public.html
No. Title of Publication
1. What We Know About Small and Medium Enterprise (SME) Finance in Indonesia, By Thomas A. 
Timberg, Partnership for Economic Growth, Small Scale Credit Advisor 
2. Islamic Banking in Indonesia, By Thomas A. Timberg, Partnership for Economic Growth, Small 
Scale Credit Advisor, Bank Indonesia.
3.
The Supply of Credit to Small and Medium Enterprise (SME) – Without the Kredit Usaha Kecil 
(KUK) Loan Program (Includes 4 Excel spreadsheets), By Thomas A. Timberg, Partnership for 
Economic Growth, Small Scale Credit Advisor, Bank Indonesia.
4.
Indonesia’s Trade Performance During the Economic Crisis (Includes 1 Excel Spreadsheet), By 
Stephen L. Magiera, Partnership for Economic Growth, International Trade Specialist, Ministry of 
Industry and Trade.
5.
Pengalaman Amerika Di Bidang Merjer: Apakah Ada Relevansinya Dengan Undang-Persaingan 
Usaha Indonesia Yang Baru? (in Bahasa Indonesia only,” The U.S. Experience in Corporate 
Mergers: Is There Any Relevance to the New Indonesian Business Competition Law?”), By Paul 
H. Brietzke, Partnership for Economic Growth, Legal Advisor, Ministry of Law and Legislation. 
6.
Economic Priorities after the Indonesian Elections and Their Implications for the Australasian 
Region, By Robert c. Rice, Partnership for Economic Growth, Small and Medium Enterprise 
Advisor, State Ministry of Cooperatives and Small and Medium Enterprises.
7.
Product Reservation and Other Policies To Increase Demand For the Products Of Small Enterprises 
Compared With Some Alternative Policies, By Robert C. Rice, Partnership for Economic Growth, 
Small and Medium Enterprise Advisor, State Ministry of Cooperatives and Small and Medium 
Enterprises, 20pp.
8. Securitisation and Bankruptcy in Indonesia: Theme and Variations, By Paul H. Brietzke, 
Partnership for Economic Growth, Legal Advisor, Ministry of Law and Legislation, 11 pp.
9. Indonesian Law Reform, By Paul H. Brietzke, Partnership for Economic Growth, Legal Advisor, 
Ministry of Law and Legislation, 12 pp.
10.
Laporan Kebijakan Persaingan Indonesia (in Bahasa Indonesia only, “Report on Competition 
Policy in Indonesia”), a study funded by the Economic Law and Improved Procurement Systems, 
ELIPS, Project, USAID No. 04970372, By Colleen Loughlin, Lexicon; Steven Marks, Pomona 
College; Achmad Shauki, U. of Indonesia Dept. of Economics; Ningrum Sirait, U. of N. Sumatra 
Faculty of Law, 63 pp.
11. Decentralization, Internal Barriers to Trade, and Local Discriminatory Action, By Gary Goodpaster, 
Partnership for Economic Growth, Chief of Party, 12 pp.
12.
Decentralization in Indonesia: Prospects and Problems, By James Alm and Roy Bahl, Department 
of Economics, The School of Policy Studies, Georgia State University (Work funded by the United 
States Agency for International Development), 58 pp.
13. Bank Restructuring in Indonesia, By Susan L. Baker, Consultant for the Partnership for Economic 
Growth, 32 pp.
Annex E-2
No. Title of Publication
14.
Report on Competition Policy in Indonesia, a study funded by the Economic Law and Improved 
Procurement Systems, ELIPS, Project, USAID No. 04970372, By Colleen Loughlin, Lexicon; 
Steven Marks, Pomona College; Achmad Shauki, U. of Indonesia Dept. of Economics; Ningrum 
Sirait, U. of N. Sumatra Faculty of Law, 73 pp. (English version on No. 10).
15.
The U. S. Experience in Corporate Merges: Is There Any Relevance to the New Indonesian 
Business Competition Law?, By Paul H. Brietzke, Partnership for Economic Growth, Legal 
Advisor, Ministry of Law and Legislation, 6 pp. (English version of No. 5).
16.
Grain Quality as a Determinant of Wheat Import Demand: The Case of Indonesia, By Stephen L. 
Magiera, Partnership for Economic Growth, International Trade Specialist, Ministry of Industry and 
Trade, 20 pp.
17. Deregulation of the Indonesian Wheat and Flour Markets, By Stephen L. Magiera, Parternship for 
Economic Growth, International Trade Specialist, Ministry of Industry and Trade, 20 pp.
18.
Small Enterprises As An Essential Part Of the Indonesian Development Strategy, By Robert C. 
Rice, Partnership for Economic Growth, Small and Medium Enterprise Advisor, State Ministry of 
Cooperatives and Small and Medium Enterprises, 25 pp.
19.
Factors Affecting The Competitiveness Of Small and Medium Enterprises, By Robert C. Rice, 
Partnership for Economic Growth, Small and Medium Enterprise Advisor, State Ministry of 
Cooperatives and Small and Medium Enterprises, 12 pp.
20.
Prospects for Indonesia’s Exports of Agro-industrial Products During Repelita VI, By Stephen L. 
Magiera, Partnership for Economic Growth, International Trade Specialist, Ministry of Industry and 
Trade, 33 pp.
21.
Policy Note: Indonesian Sugar Policies and Contrasts with Other Asian Countries, By Stephen L. 
Magiera, Partnership for Economic Growth, International Trade Specialist, Ministry of Industry and 
Trade, 12 pp.
22.
The Uruguay Round, Implications for the Indonesia Textiles and Apparels Sector, By Stephen L. 
Magiera, Partnership of Economic Growth, International Trade Specialist, Ministry of Industry and 
Trade, 17 pp.
23.
A Comparison of the Development of Small and Medium/Large Indonesian Manufacturing 
Enterprises from 1986 to 1996 by Sector, by Robert C. Rice, Partnership for Economic Growth, 
Small and Medium Enterprise Advisor, State Ministry of Cooperatives and Small and Medium 
Enterprises, 10 pp.
24.
Faktor-faktor yang Mempengaruhi Daya Saing Usaha Kecil dan Menengah oleh Robert C. Rice, 
Kantor Menteri Negara Koperasi, Pengembangan Usaha Kecil dan Menengah dan Proyek 
Partnership for Economic Growth, 16 pp.
25.
Strategy of Financing Small and Medium Enterprises in a New Economic Environment, by Thomas 
Timberg, PEG-USAID Small Scale Credit Adviser for Bank Indonesia. I gratefully acknowledge 
the many inputs and insights for this paper provided by Mr. Abdul Azis and Mrs. Yunita R. Sari of 
Biro Kredit, Bank Indonesia, 30 pp.
26.
Why Isn’t There More Small and Medium enterprise (SME) Credit from Commercial Banks I 
Indonesia? By Thomas Timberg, PEG-USAID Small Scale Credit Adviser for Bank Indonesia, 
delivered at the USAID Retreat, November, 2000, 3 pp.
27.
The Political Economy of SME Development Policy in Indonesia – the Policy Process, the Facts, 
and future Possibilities. By Thomas Timberg, PEG-USAID Small Scale Credit Adviser for Bank 
Indonesia, delivered at the USAID Retreat, November, 2000, 8 pp.
Annex E-3
No. Title of Publication
28.
Lending Models – How to Determine Why SME Loans are Made in Indonesia – Moving Forward 
to a Research Agenda. By Thomas Timberg, PEG-USAID Small Scale Credit Adviser for Bank 
Indonesia, delivered at the USAID Retreat, November, 2000, 5 pp.
29.
Reflections on Corruption in Indonesia. By Gary Goodpaster, Professor of Law Emeritus, 
University of California School of Law, Davis; former Chief of Party, Partnership for Economic 
Growth, February 2001, 21 pp.
30. Refleksi Tentang Korupsi oleh Gary Goodpaster, Bahasa Indonesia version of paper no. 29.
31. Status of the WTO Services and Agriculture Negotiations: Implications for Indonesia D Summary 
of Findings and Final Report by Ashok Menon, Nathan Associates, January, 20001, 68 pp.
32.
The Gains from Open International Trade and Investment in the Deregulation Era: Implications for 
Indonesia International Economic Policy in the 21st Century by William E. James, March 2001, 62 
pp.
33. Technical Report Indonesia Information and Communications Technologies (ICT) Assessment by 
D. Owen, I. Sulaiman, S. Baldia and S. Mintz, March 2001, 135 pp.
34. Trade Finance in Indonesia: Structural Issues and Impact of the Financial Crisis by Melville Brown 
and Stephen L. Magiera, Nathan Associates, 25 pp.
35. Perizinan Dalam Era Desentralisasi (in Indonesian) (Licensing in the Decentralizing Era) Frida 
Rustiani, PEG/MOIT, 31 pp.
36. Business Development Services for Small and Medium Enterprises and Cooperatives in Indonesia: 
Some Key Guidelines and Needs by Eduardo Canela, April 2001, 69 pp.
37. Inflation Targeting in a Dynamic General Equilibrium Model: The Case of Indonesia by P.D. 
McNelis, C.P. Joseph, J. Dewandaru, and H.D. Ari, January 2001, 25 pp.
38. Fiscal Policies for Economic Recovery by William Wallace, August 1999, 24 pp.
39. Policies and Institutions to Ensure Free Internal Trade under Decentralization by D. Ray and G. 
Goodpaster, April 2001, 20 pp.
40. Trade and Citizenship Barriers and Decentralization by D. Ray and G. Goodpaster, September 
2000, 20 pp.
41. National Economic Integrity and the Decentalisation Process: Guidelines for Competition and 
Domestic Trade Policies by D. Ray, October 2000, 19 pp. 
42. Are Industrial Concentration and Market Shares Reliable Indicators of Competition? By Kelly Bird, 
August 1999, 28 pp.
43. How Reliable Are Agricultural and Industrial Wage and price Data? By Gustav F. Papanek and 
Budiono Sri Handoko, August 1999, 13 pp.
44. The Impact of Crises and Policies on the Poor: An Early Warning System Based on Wages by 
Gustav F. Papanek, November 1999. 11 pp.
45. Indonesian Non-Oil/Gas Export Performance in 1998 by James Mudge, August 1999, 24 pp.
*
Annual Report 2000 – Partnership for Economic Growth (PEG) Project, March 2001, 57 pp.
46. An Economic Reform Agenda for Indonesia? By Paul Brietzke and Thomas A. Timberg, August 
1999, 97 pp. 
47. Economic Issues and the Constitution by William Wallace, March 2000, 10 pp.
48. Economic Development and Development Planning: A Short Note by William Wallace, August 
2001, 9 pp.
49. The Pursuit of Monetary Policies under the Transition from High Inflation to Stabilization: The 
Experience of Bazil by William G. Tyler, August 1999, 25 pp.
Annex E-4
No. Title of Publication
50. Moving Towards Inflation Targeting in the Pursuit of Monetary Policy: Some Thoughts on 
Defining a Work Program by Reza Anglingkusumo and William G. Tyler, June 1999, 22 pp.
51. Companies Law in Indonesia by Paul H. Brietzke March 2000, 26 pp.
52. Homo Oeconomicus as Menschenbild: Reforms in Indonesia by Paul H. Brietzke November 1999, 
10 pp.
53. Survey on Uses of Information & Communications Technology by Indonesian SME Exporters by 
Yadi S.A. Suriadianata, September 2001, 76 pp.
54.
Penelitian Pengunaan Teknologi Informasi dan Komunikasi Oleh UKM Eksportir di Indonesia (in 
Indonesian) (Survey on Uses of Information & Communications Technology by Indonesian SME 
Expeorters) by Yadi S.A. Suriadianata, September 2001, 93 pp.
55.
Pembaharuan Peraturan Perundang-Undangan Mengenai Usaha Kecil dan Menengah di Indonesia 
(Review of Regulations & Laws about SME in Indonesia) (in Indonesian) by Paramita 
Pranamingtyas, July 2001, 44 pp.
56.
Otonomi Daerah dan Iklim Usaha: Temuan dari SMERU ( in Indonesian with and English 
summary) (Regional Autonomy and the Business Climate: Findings by SMERU) by The Social 
Monitoring and Early Response Unit (SMERU), April 2001, 58 pp.
57.
The Benefits from Free Internal Market Trade: Some Lessons for Indonesia from the European 
Union Single Market Programme by Douglas Todd, April 2001, 13 pp., and the translation in 
Indonesian, “Manfaat dari Program Pasar Tunggal Uni Eropa,” April 2001, 15 pp.
58.
Globalization and Decentralization: The Gains from Open Domestic and International Trade by 
William E. James, April 2001, 9 pp., and the translation in Indonesian, “Globalisasi dan 
Desentralisasi: Keuntungan dari Perdagangan Domestik dan Perdagangan Internasional yang 
Terbuka,” April 2001, 11 pp.
59.
Policies and Institutions to Ensure Free Internal Trade under Decentalization by David Ray and 
Gary Goodpaster, April 2001, 19 pp., and its translation, “Kebijaksaaan dan Lembaga untuk 
Memastikan Perdagangan Internal Bebas Dalam Era Desntralisasi,” April 2001, 22 pp.
60.
Local Government Taxation: Standard International Practices by Arthur J. Mann, April 2001, 24 
pp., and its Indonesian translation, “Perpajakan Pemerintah Daerah: Praktek-Praktek Internasional 
Yang Standar,” April 2001, 26 pp.
61.
Prospek Perdagangan dalam Negeri dalam Era Desntralisasi dan Dampaknya Atas Pembangunan 
Ekonomi Derah (The Prospect of Domestic Trade in the Era of Decentralization and its Impact of 
Regional Economic Growth) (in Indonesian) by Ubaidillah, Brahmantion Idsijoso and Mangara 
Tambunan, April 2001, 22 pp.
62. Deregulasi Ekonomi, Kemiskinan dan Distribusi Pendapatan (Economic Deregulation, Poverty and 
Income Distribution) (in Indonesian) by Mohamad Ikhsan, April 2001, 22 pp.
63.
Kebijakan Persaingan di Era Otonomi: Peranan KPP [Competition Policy in an Era of Regional 
Autonomy (Decentralization): The Role of KPPU ( the Business Competition Supervisory 
Commission)] (in Indonesian) by Faisal H. Basri and Dendi Ramdani, April 2001, 11 pp.
64. Kebijakan Pungutan Daerah di Era Otonomi [The Policy on Regional Levies in the Era of Regional 
Autonomy (Decentralization)] (in Indonesian) by Robert A. Simanjuntak, April 2001, 22 pp.
65.
Wage and Employment Effects of Minimum Wage Policy in the Indonesian Urban Labor Market 
by the Social Monitoring and Early Response Unit (SMERU) Research Institute, October 2001, 85 
pp.
66. The New Regionalism in East Asia: Implications for Indonesia by William E. James, October 
2001, 11 pp.
67. Regional Autonomy and the Business Climate: Three Kabupaten Case Studies from North Sumatra 
by the Social Monitoring and Early Response Unit (SMERU) Research Institute, May 2001, 47 pp.
Annex E-5
No. Title of Publication
68.
Regional Autonomy and the Business Climate: North Sulawesi and Gorantalo by the Social 
Monitoring and Early Response Unit (SMERU) Research Institute, September 2001, 63 pp., and the 
Indonesian translation, “Otonomi Daerah dan Iklim Usaha: Kasus Sulawesi Utara dan Gorontalo,” 
September 2001, 57 pp.
69.
Establishing an Independent Regulatory Body for Telecommunications (remarks at a Workshop 
Sponsored by the USAID PEG Project and the Ministry of Communications, Republic of Indonesia, 
May 9, 2001), by Larry F. Darby, May 2001, 11 pp.
70. An Independent Regulatory Body for Telecommunications by Stephen L. Magiera, September 
2001, 3 pp.
71. An Overview of Indonesia Trade Policy During the 1990’s by Stephen L. Magiera, May 2001, 6 pp.
72. The Indonesian Economic Recovery from the Crisis in 1997-98, Anwar Nasution, January 2001, 24 
pp. 
Annex F-1
Annex F 
List of PEG Accomplishments in 2001
For annual USAID Financial Report
1. A key accomplishment of the work at BAPPENAS has been the mid-term macroeconomic
frameworks and policy agendas (the umbrella for the annual budget). In July the most recent 
framework was explicitly included in the GOI Letter of Intent (LOI) to the IMF. These
exercises highlight the policy agenda required to accelerate recovery and maintain fiscal
sustainability. They are the key Indonesian government agenda setting document and
promote ownership of economic reform. 
2. The PEG team has also assisted BAPPENAS develop its own monthly and quarterly
economic reports for the cabinet, replacing similar reports to GOI that had been prepared by
PEG. These reports highlight emerging issues and focus the cabinet’s scarce policy resources 
on critical economic problems as they emerge. 
3. PEG provided both BAPPENAS and the Investment Coordinating Board materials to
strengthen key provisions of the proposed investment law to improve investor confidence. 
The final draft was circulated in early November 2001. A key success was the insertion of
national treatment for foreign investors. Other key provisions include guarantees against
nationalization, fair and prompt compensation, guarantees of free access to foreign exchange, 
and repatriation of capital and profits. 
4. BAPPENAS is now directly under the President's office and is responsible for developing
policy white papers. The PEG team is working with BAPPENAS on two white papers: (1)
support for investment policy analysis and (2) work programs in the Manpower directorate
including review of labor policies and the industrial relations system. PEG has obtained
high-level support for the examination of labor policy issues and the development of a
comprehensive employment strategy. 
5. PEG worked extensively to help the Government of Indonesia to establish the legal basis for 
identifying and then freezing terrorist assets in the Indonesian banking system. Because of
these efforts two separate orders requiring the freezing of terrorist assets were issued in late
2001. 
6. PEG worked with the Ministry of Finance to promote the work of the KPMG/Barrents on tax 
reform. In conjunction with the IMF, the Ministry of Finance is now moving forward on a
number of fronts to improve tax administration and key goals on tax administration reform
were included in the latest LoI. 
7. PEG has been working for most of 2001 with the Office of the Coordinating Minister for
Economic Affairs on developing a participatory process for the development of a poverty
reduction and alleviation program. The government's approach in this area, as well as its
initial views on what a poverty strategy should include, were presented at the CGI in
November and were well received by the international community. 
8. The team worked with the Embassy, the U.S. Treasury representative, and the GOI on efforts 
to develop a strong money-laundering bill. 
Annex F-2
9. The PEG project has been instrumental in maintaining the momentum of trade policy
reforms, despite political pressures to reverse the process. Tariffs have been reduced by
nearly 50 percent over the past six years and most non-tariff import barriers have been
eliminated.
10. PEG analyzed the underlying causes of the weak trade performance and provided
recommendations to improve the economic foundations of Indonesia’s trading system (e.g.
improved legal structure, broader financial markets for trade finance, etc). These
recommendations have helped diffuse pressures for the Government to intervene directly in
the market through the provision of subsidized export credits. 
11. PEG successfully raised awareness of the possible negative effects on Indonesia of new
regional trade arrangements such as the Singapore-Japan Agreement through a technical
report provided to MOIT. The findings from this work will enable MOIT to better identify
and deal with problems inhibiting competitiveness of Indonesian products and lead to
heightened awareness of the necessity of improving institutional capacities in support of open 
and competitive markets. 
12. Another success has been the positive response of the Minister of Industry and Trade to a
PEG technical report on the impact on Indonesian trade of the global slowdown and the 9-11 
attacks. This has led to the initiation of a study of the relative competitiveness of Indonesian 
products in the two largest markets as requested by the Minister. 
13. Indonesia continues to be an active participant in multilateral trade institutions, including
APEC, AFTA, and implementation, notification, and the built-in agenda of the Uruguay
Round, and PEG has encouraged that participation through TA on the services and
agricultural negotiations, such as training in the construction of service schedules, and other
technical advice to ensure conformance with WTO rules and international best practices. 
14. PEG-MOIT played a leading role in improving GOI awareness of the potential dangers of
decentralization upon the business climate, in particular the freedom to trade across sub￾national boundaries, sponsoring a number of regional seminars and conferences (including a
major national conference) and a series of regional studies and policy papers. As a result, the 
MOIT is now working on a new domestic trade law that seeks to ban all forms of tariff and 
non-tariff barriers in domestic trade.
15. Policy reforms on domestic infrastructure are critical to Indonesia’s future competitiveness. 
The PEG project has analyzed the tremendous benefits from port and shipping reform in
Indonesia and raised awareness of the need for reform through deregulation and increased
private sector participation. Maritime port development is potentially a key sector for U.S.
companies in Indonesia and for Indonesia’s future development.
16. In telecommunications, PEG has been instrumental in getting Indonesia to adopt a pro￾competition regulatory framework that is based on international best practices. Regulatory
reform is still in process, but one result is that the Government has decided not to merge two 
state-owned telecommunication companies into a monopoly. Telecommunications is also
Annex F-3
potentially a key sector for U.S. companies in Indonesia and for Indonesia’s future
development. 
17. In collaboration with USAID ANE Bureau, World Bank and JICA, PEG facilitated in the
development of ICT National Guidelines and an ICT Action Plan. Both documents were
eventually adopted by the Government as part of a Presidential Executive Order. Through
socialization, PEG was instrumental in persuading the government to cancel a new regulation 
that would have restricted foreign investment in multimedia in Indonesia by imposing a
luxury goods tax on ICT products. 
18. As part of the efforts to implement the ICT Action Plan, PEG facilitated seminars on better
use of existing ICT infrastructure and conferences on trade facilitation and e-business and on 
the Internet and small business development, coordinated a Washington-Jakarta video￾conference on telecenter development, and organized the first donor meeting on ICT
involving 6 donor organizations (USAID, World Bank, JICA, AusAid, CIDA and GTZ). 
19. PEG has analyzed the impact of agricultural import barriers and played a pioneering role in
examining the interface between decentralization and competition. This has led to fewer
protectionist food policies, both domestic and international, and ensured that the Ministry
focuses on the national interest when approving policies, some for incorporation in the new
domestic trade law.
20. PEG made significant inputs into Bank Indonesia’s adoption of a new market friendly small
credit promotion policy and abandonment of lending quotas as required by the IMF LOI. 
Implementation is underway. 
21. To help maintain macroeconomic stability, PEG advisors supported Bank Indonesia’s anti￾inflation policy with analysis and advice, assisting the central bank resist pressure to
prematurely lower interest rates.
22. PEG promoted increased financial market flexibility. Caps on bank savings deposit interest
rates were raised several times, allowing banks greater freedom in setting their deposit rates
and increasing the effectiveness of the central banks monetary policy. Higher deposit rates
contributed to exchange rate stability.
23. In cooperation with GTZ, PEG supported reforms in Rural Banks (BPR) and non-bank 
Microfinance regulations. This process is advanced but not complete. The new BPR rules
are mostly in place, though the licensing rules will come in the next several months and
implementation has just started. The Draft Microfinance Institution Law is still being
reviewed by the Ministry of Finance before going to Parliament.
24. In cooperation with the IMF a report was completed on the Human Resource and Training
Needs for Bank Supervision. It is now under consideration by the BI Board of Governors.
25. PEG spearheaded the development of an internationally accepted monetary policy model, the 
General Equilibrium Model for Bank Indonesia (GEMBI), which represents the state of the
Annex F-4
art method for doing policy evaluation assessment in a dynamic open economy. This effort 
is now moving into “on-line” economic policy design and evaluation. 
26. PEG provided technical advice in support of Bank Indonesia’s Transformation Project, to
adjust it to its new more limited roles. 
27. PEG promoted the issuance of a Ministerial Decree by the State Ministry for Cooperatives
and Small Enterprise that sets up (on a consensus basis with the other parties) an inter￾ministerial working group with a clear mandate to design a credit reference bureau like Dun
and Bradstreet and resolve the outstanding issues connected with that bureau.
28. PEG has promoted progress in the external auditing of micro-finance institutions, marked by
the launching of a contest for collecting audit experience and the launching of a program (by
Asia Foundation) to restructure West Java micro-finance institutions. 
29. PEG has administered 6 grants made under its contract, worth approximately $4.65 million.
Five (5) were extended into 2002 for additional activities. PEG also supervised the award
and approval of, and subsequently administered, four direct USAID grants worth
approximately $3.4 million, of which $1.4 million was for micro-enterprise development.
Two Ph.D. research grants were awarded and completed. 
30. PEG-administered grants have resulted in strong partnerships between U.S. and Indonesian
institutions and organizations. Important relationships have been established with the
Indonesian Competition Commission, the Jakarta Stock Exchange, legislative committees
that oversee national economic policy, and selected local government administrations. 
31. As a result of the USAID/PEG grants programs, Indonesian national and regional
universities, think tanks, NGOs and research groups have a much increased capacity to
advise government on decentralization issues, barriers to trade and investment opportunities, 
promoting healthy competition, liberalizing Indonesia's trade regime and financial and
corporate restructuring. 
PEG, CSCallison with PEG staff, 1/22/02
Annex G
USAID-Indonesia Economic Growth Strategy
Transition to a Prospering and Democratic Indonesia
 Annex G-1
Strategic Objective (SO-1): Foundations Set for Rapid, Sustainable, and 
Equitable Economic Growth
Intermediate Result (IR-1): Sound Economic Policy & Institutions
The current portfolio of technical assistance activities supporting USAID’s Economic Growth 
initiatives in sound economic policy and institutions includes ongoing policy reform work with 
key institutions as well as mechanisms for flexible response to emerging policy issues and to 
challenges in managing Indonesia’s recovery from the Asian financial crisis. During the period 
from 1999-2001, these technical assistance resources proved invaluable, not only in contributing to 
the Government of Indonesia’s crisis response program but also in providing an entry point into 
policy and institutional reform processes that can truly set the foundations for rapid, sustainable, 
and equitable economic growth. 
Transition from Response to Recovery
As the Indonesian situation transitions out of crisis response and into recovery and restructuring, 
USAID-ECG resources are engaged in addressing the challenges posed by a formidable range of 
economic problems that are both crisis-driven and structural: budget deficit and uncoordinated 
fiscal policy, inflation, decline in new investment, economic slowdown, budget and policy 
confusion driven by decentralization, continuing structural problems in financial and banking 
sector, labor unrest, and increasing poverty. Making cost-effective use of the USAID-funded 
resources requires not only identifying and attacking the right problems, but also assembling an 
effective range of technical assistance inputs and deploying them across key policy-making 
institutions where reform is underway and impact can be maximized.
Guiding Principles
· Leveraged entry into policy debate: Provide resident advisors with expertise in priority 
policy areas to support key economic ministries in institutional restructuring and policy 
reform.
· Timely technical inputs: Expand and deepen impact of technical assistance by mobilizing 
focused short-term technical expertise to provide additional technical inputs and 
accomplish specific time-bound tasks.
· Range and synergy: Position resident advisors across appropriate range of economic 
policy-making institutions to cover entry points into policy debate and to reinforce policy 
reform from multiple angles.
· Flexibility and creativity: Seize openings for constructive policy debate on emerging 
issues and provide inputs to support more equitable growth-oriented policies to strengthen 
Indonesia’s economy and its links with American businesses and institutions.
Annex G
USAID-Indonesia Economic Growth Strategy
Transition to a Prospering and Democratic Indonesia
 Annex G-2
POLICY AGENDA
Key Policy 
Goals
Improved Policies in Trade, Investment, 
Labor, and Industry
Strengthened Policies and Institutions 
for Fiscal Sustainability
Restructured Financial Sector and 
Credible Banking Institutions
Trade-Investment-Labor-Industrial is a nexus of 
real sector policy areas where better policy 
delivers better growth, employment generation, 
and poverty reduction. 
Fiscal and monetary policy is the nexus where 
government’s macro tools and institutions help 
maintain stability, and increase and sustain the 
economic growth rate.
Financial sector reform targets the policy 
challenges of resolving crisis damage and 
creating efficient financial intermediation 
in the real sector.
Rationale
Each of these is a “policy nexus” that is central to Indonesia’s development strategy, and policymaking cuts cross all ministries where ECG 
technical assistance is focused. Some of the priority policy issues are also critical to short-term crisis response and recovery – and the lessons 
of the crisis illustrate the problems that occur when good macro policy is not supported by the necessary real sector policies.
Objectives · Focus on interaction between investment, 
trade, industrial, and competition policies to 
support sustainable real sector recovery
· Competitive, open markets for both 
international and domestic trade
· Increased domestic and foreign investment 
in competitive, job-creating sectors
· Labor and industrial policies that support 
expanded employment as a key element in 
poverty alleviation strategy
· Regulatory/policy framework to encourage 
investment in competitive infrastructure 
supporting expanded trade and growth –
telecommunications, ports
· Medium-term macro-fiscal framework for 
setting expenditure priorities; coordinated 
approach to expenditure control and 
appraisal, financing, and debt management
· Reduced fiscal deficit – increased tax 
revenues, more efficient tax admin
· Reduced ratio of public debt to GDP 
· Substantive policy debate on appropriate 
legal and regulatory framework for de￾centralization as it affects tax and budget
· Support sound public debt management
· Effective program of debt recovery and 
assets sales from BUMN
· Resolution of debt overhang through 
continued corporate debt restructuring
· Policies and actions to create a viable 
and restructured banking sector, to 
contribute to: 
· Price stability and low inflation
· Stable and competitive real 
exchange rate
· Liquidity adequate to support growth
· Policy environment to provide a level 
playing field for SME growth
· Rational regulatory environment
· Adequate and flexible financing
· Access to business development 
services
Cross￾Cutting
· Improved capacity within legislative branch to engage in substantive and productive dialog on budget and key policy issues 
-- less obstruction on key implementation challenges such as asset sales and bank restructuring
· Increased capacity for policy analysis among academia and civil society, and public participation in policy dialog on key economic topics 
– Indonesian partners benefiting from three years of PEG Linkage grants, now stronger in independent policy work.
ECG 
Resources & 
Technical 
Assistance
v PEG-MOIT
v PEG-Telecommunications
v PEG-BAPPENAS
v PEG-Coordinating Ministry
v IRIS-DPR
v PEG-Grants
v PEG-BAPPENAS
v PEG-Coordinating Ministry
v KPMG – BAF and DG-Tax
v IRIS – DPR
v Barents – JITF
v PEG-Grants
v PEG-BI
v PEG Coordinating Ministry
v IRIS-DPR
v Barents – IBRA
v PEG-Grants
Annex G
USAID-Indonesia Economic Growth Strategy
Transition to a Prospering and Democratic Indonesia
 Annex G-3
Policy Area Accomplishments in 2001 Priority Issues for 2002 and Beyond
Improved Policies 
in Trade, 
Investment, Labor, 
and Industry
· Instrumental support for maintaining 
the momentum of trade policy 
reforms despite intense political 
pressures to reverse; tariffs have 
been reduced by almost 50% over 
the past six years, and most non￾tariff barriers are eliminated.
· Support to Indonesia’s active 
participation in multi-lateral trade 
institutions has produced openings 
in key sectors, including services, 
telcom, and agriculture which are of 
interest to US business community.
· Revisions to proposed investment 
law to provide national treatment to 
all investors.
· Policy reforms on growth-critical 
infrastructure sectors such as ports 
and telecommunications have been 
advanced, and anti-competitive 
initiatives successfully thwarted.
· A national action plan for Information 
& Communication Technology (ICT) 
has launched a coordinated national 
effort to support economic growth 
and democratic policy-making 
through expansion of ICT.
· Analysis on impact of agricultural 
import barriers and the interface 
between decentralization & 
competition has led to less 
protectionist food policies and a 
wider assessment of the benefits 
and costs of food price policy.
· High-level support for examination of 
labor policy and development of 
comprehensive employment strategy 
to feed into poverty alleviation.
· Inputs for the preparation of the GOI 
poverty alleviation strategy agenda.
· Coordination and synergy between 
USAID-funded advisors in Finance, 
BAPPENAS, EKUIN, and MOIT has 
resulted in better policy coordination 
– and better policies.
· Focus on interaction between investment, trade, 
industrial, and competition policies to support 
sustainable real sector recovery 
· Support to developing policy framework in key 
cross-cutting areas like telecommunications to 
enhance competitiveness, expand investment, and 
support broad participation in both economic 
activity and democratic decision-making 
· Priority issues in international trade policies
· how development of new regional trading 
agreements may divert trade from Indonesia
· how global slowdown will affect Indonesian trade
· how key manufacturing industries will be affected 
by changes in trade policy under international & 
regional agreements
· using Team Tariff (or other inter-ministerial 
mechanism) to advance a non-protectionist trade 
policy agenda to promote exports and growth 
· reducing average tariff rates and tariff dispersion 
· compliance with commitments under WTO –
legal review and drafting, creating approving 
regulatory frameworks 
· national treatment & market access for services
· Priority issues in domestic and sub-national 
trade policies
· inter-island trade impediments
· sub-national barriers to trade and policy impacts 
of decentralization
· competition along and competitiveness of supply 
and distribution chain
· Improving investment policies, especially in key 
sectors
· assessment of sectoral constraints including 
restrictions on private and foreign investment
· privatization of state-owned enterprises
· telecom regulations not conducive to private 
investment
· transportation policies biased against private 
sector participation
· Linkages between industrial and labor policies, 
and unemployment and poverty
· research on impact of minimum wage laws, 
severance policies, social security contributions
· policy bias against employment generation
· Impact of food price policies on urban and rural 
poor, consumers, producers
Annex G
USAID-Indonesia Economic Growth Strategy
Transition to a Prospering and Democratic Indonesia
 Annex G-4
Policy Area Accomplishments in 2001 Priority Issues for 2002 and Beyond
Strengthened 
Policies and 
Institutions for 
Fiscal Sustainability 
· Support to creation of the mid￾term macroeconomic framework 
and policy agenda incorporated 
into GOI Letter of Intent w/ IMF.
· Blueprint for tax reform 
developed; four Large Taxpayer 
Compliance Units planned and 
included in GOI-IMF LOI.
· Supportive analysis for BI’s anti￾inflation policy allowed them to 
resist pressure to prematurely 
lower interest rates.
· Increased financial market 
flexibility from raising caps on 
deposit rates to contribute to 
exchange rate stability.
· Development of a state-of-the￾art internationally-accepted 
monetary policy model –
General Equilibrium Model for 
Bank Indonesia – now in use.
· Focus on interaction of the budget with the rest of 
the economy 
· Improved tax administration and enhanced 
revenues
· increase collections of corporate and personal 
income taxes, VAT, and property taxes
· increase non-tax revenues
· improve tax audit, widen coverage
· design and implement unified tax database
· Improved public expenditure management
· Control of subsidy programs
· Establishment of expenditure priorities and 
mechanisms for prioritizing the efficient use of 
resources --using a medium-term macro/ 
fiscal framework to balance resources and 
development goals
· Enhanced capacity to manage financing of 
government expenditures
· Asset sales and privatization – expanding the 
policy debate beyond the asset sale figure to 
technical and allocative efficiency
· Debt management – to include both
·Developing/improving the domestic bond 
market
·Foreign donor/creditor relations and 
coordination
· Support for improved and proactive policy design 
on emerging public expenditure issues such as 
“social protection” programs (pensions, 
unemployment insurance) as distinct from crisis 
response social safety net programs (subsidies, job 
creation)
Annex G
USAID-Indonesia Economic Growth Strategy
Transition to a Prospering and Democratic Indonesia
 Annex G-5
Policy Area Accomplishments in 2001 Priority Issues for 2002 and Beyond
Restructured 
Financial Sector 
and Credible 
Banking 
Institutions 
· JITF case management of 
corporate debt restructuring efforts 
allowed Indonesia to meet the 
GOI-IMF LOI targets three years 
in a row. 
· Adoption of a new market-friendly 
small credit promotion policy and 
abandonment of lending quotas.
· In cooperation with GTZ, support 
to ongoing reform of rural banks 
(BPR)
· Draft of non-bank micro-finance 
regulation under discussion.
· Promotion of issuance of a decree 
to set up an inter-ministerial 
working group with a clear 
mandate to set up a credit 
reference bureau like Dun & 
Bradstreet.
· Promotion of progress in the 
eternal auditing of micro-finance 
institutions.
· Improved climate for investment 
· maintain market orientation and free convertibility 
· more clear and certain investment and industrial 
policies 
· regime that provides equal treatment between 
investors
· Accelerated corporate debt restructuring and 
bank restructuring
· Maintain momentum of JITF case mediation to 
meet short-term time-bound goals
· Support second-round restructurings 
· Enhance effectiveness of both tax incentives and 
FSPC sanctions
· Support restructuring of banking sector including 
transfer and liquidation
· Strengthen BI’s supervision and enforcement of 
prudential regulations
· Transition from the blanket Government 
Guarantee Scheme
· Enabling environment for SME growth and 
creation of jobs
· Regulatory – limit the burdens imposed on small 
businesses by local governments and by preman
mafia
· Finance – expanded but prudent support for a 
range of BPR, commercial banks, and 
microfinance mechanisms who want to serve 
SMEs; encouragement of new institutions such 
as credit bureaus, rating services, and new 
lending methodologies
· Business Development Services – available and 
driven by market demands from SMEs 
themselves
Annex H-1
Annex H 
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Annex H-2
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