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Indonesia’s Development Plan

National development planning is one of the most vital elements in maintaining the sustainability of a country. It is essential to plan the targets, vision, and mission of a country. In Indonesia, national development planning is regulated under Law No. 25/2004 and divided into RPJP, RPJM, and RKP as elaborated hereunder:

Long-Term Development Plan/Rencana Pembangunan Jangka Panjang

RPJP is a development masterplan due for 20 (twenty) years. Its preparation is carried out in the following order: (i) preparation of the initial draft of the development plan; (ii) development planning deliberation; and (iii) preparation of the final draft of the development plan. Specifically, Law No. 25/2004 stipulates 2 (two) types of RPJP, namely RPJPN and RPJPD:

Long-Term National Development Plan/Rencana Pembangunan Jangka Panjang Nasional

 

RPJPN for 2005-2025 is regulated under Law No. 17/2007. It is the elaboration of the national objectives enshrined in the Preamble of the 1945 Constitution, in the form of vision, mission, and the direction of national development. RPJPN is designed by MoNDP and will be discussed in the development planning conference. As part of good administration, the general public will also be consulted in the conference.

Long-Term Regional Development Plan/Rencana Pembangunan Jangka Panjang Daerah

 

While national development is steered by RPJPN, the provincial/regional level has RPJPD, which basically follows the RPJP. RPJPD is regulated under the respective Regional Regulation. In some regions, RPJMD is regulated explicitly by special regulations.  For instance, RPJPD for the Province of Nanggroe Aceh Darussalam is stipulated by its Qanun. Qanun is a statutory regulation similar to a regional regulation that regulates the administration of government and community life in the Aceh region. Meanwhile, RPJPD for the Province of Papua is determined by special regional regulations and provincial regulations.

As for the procedural aspect of RPJPD, the Draft is initially prepared by the Head of the Regional Development Planning Agency. Furthermore, the Head of Regional Development Planning Agency will hold a long-term development planning meeting. The long-term development planning meeting is carried out no later than 1 (one) year before the end of the ongoing RPJP. Then, the Head of Regional Development Planning Agency will prepare the final draft of RPJPD following the result of the long-term development planning meeting. RPJPD will then be determined in Regional Regulation.

Medium-term Development Plan/Rencana Pembangunan Jangka Menengah

RPJM is a development plan due for 5 (five) years. The RPJM is prepared by MoNDP based on the RPJP. In relation to the RPJM, Law No. 25/2004 regulates two types of RPJM, namely RPJMN and RPJMD. Further explanations regarding RPJMN and RPJMD are as follows:

Medium-term National Development Plan/Rencana Pembangunan Jangka Menengah Nasional

RPJMN elaborates the President's vision, mission, and programs, which preparation refers to the RPJPN. RPJMN contains the national development strategy, general policies, strategic priority projects, Ministry/agency and cross-Ministry/Institutional, regional and cross-regional programs, development priority, as well as a macroeconomic framework that includes a comprehensive picture of the economy, including direction of fiscal policy in the work plan in the form of a regulatory framework and indicative funding framework. 

RPJMN shall be determined in Presidential Regulation no later than 3 (three) months after the President is inaugurated. RPJMN for the period of 2020-2024 has been stipulated under PR No. 18/2020. RPJMN 2020-2024 elaborates the President's vision, mission, and programs as a result of the 2019 general election.

RPJMN 2020-2024 is one of the critical stages throughout the RPJPN 2005-2025, because RPJMN 2020-2024 is the final stage of the RPJMN, determining the achievement of development targets in the RPJPN. In accordance with RPJPN 2020-2025, RPJMN 2020-2024 goal is to realize an independent, advanced, fair and prosperous society through accelerating development in various fields by emphasizing the solid economic structure based on competitive advantages in various regions supported by qualified and competitive human resources.

RPJMN 2020-2024 is prepared based on: (i) RPJPN 2005-2025; (ii) vision for Indonesia in 2045; and (iii) vision and mission of the elected President of 2019 general election. RPJMN 2020-2024 is implemented into seven development agendas, which are as follows:

  • strengthening economic resilience for quality and equitable growth;

  • developing regions to reduce inequality and ensure equity;

  • improving quality and competitiveness of human resources;

  • mental revolution and cultural development;

  • strengthening infrastructure to support economic development and basic services;

  • building the environment, improving resilience towards disaster and climate change;

  • strengthen stability in the politic, law, defense and security aspect and strengthen public service transformation.

Concerning investments, RPJMN also determines that the improvement of the business climate and the enhancement of investment is carried out through (i) harmonization and synchronization of regulations and policies between sectors and regions; and (ii) facilitation of the ease of doing business and investment, including the provision of customs facilitation and taxation, preparation of regulations to improve the business and investment climate through the taxation Omnibus Law which will regulate PPHA, VAT, taxes and regional levies, as well as general provisions on taxation, improvement in the ranking of ease of doing business, and the application of an electronically integrated business licensing system.

Medium-term Regional Development Plan/Rencana Pembangunan Jangka Menengah Daerah

In addition to the national RPJMN is the regional RPJMD. RPJMD is a description of the vision, mission, and program of the Regional Head, whose preparation is guided by the RPJPD and in lieu with RPJMN, containing regional financial policy directions, regional development strategies, general policies, and programs of regional apparatus work units, cross-regional apparatus work units, and regional programs accompanied by work plans within the regulatory framework and indicative funding framework. 

Head of Regional Development Planning Agency initially prepares a draft of RPJMD. Furthermore, the Head of the Regional Development Planning Agency will hold a medium-term development planning meeting. The medium-term development planning meeting is carried out no later than 2 (two) months after the Regional Head is inaugurated. Head of Regional Development Planning Agency will prepare the final draft of RPJMD following the result of the medium-term development planning meeting. RPJMD will then be determined in Regional Head Regulation no later than 3 (three) months after the Regional Head is inaugurated.

Government Work Plan/Rencana Kerja Pemerintah

RKP is a planning document for 1 (one) year. RKP is an elaboration of the RPJMN, which contains development priorities, the draft of macroeconomics framework, which includes a comprehensive picture of the economy including fiscal policy directions, as well as Ministry/Agency programs, cross Ministries/Agencies, regional in the form of a regulatory framework and indicative funding framework. RKP becomes the guidance of the preparation of state budget design. Furthermore, RKP is determined in the Presidential Regulation. RKP for 2021 has been stipulated under PR No. 86/2020.

The theme of the development of the RKP for 2021 was prepared by considering: (i) RPJMN 2020-2024; (ii) the results for evaluation of development performance; (iii) budget year for 2019; and (iv) development policies for 2020. With the occurrence of the global COVID-19 pandemic, which impacted world economy and national economic growth in 2020, the theme of development for RKP 2021 is directed to the development process for sustainable recovery affected by the COVID-19 pandemic. The theme of RKP 2021 development is “Accelerating Economic Recovery and Social Reform".

The development targets for 2021 are aimed at achieving the main goals that cover macroeconomic targets, especially the national economy that affected by the COVID-19 pandemic, human and community development, the dimensions of equity, and environmental quality with development indicators as follows:

Development Target for 2021

Development Target for 2021

Source: Appendix I of PR No.86/2020

Referring to the theme and development targets in 2021, the policy directions and the development strategy that will be pursued in 2021 is to accelerate economic recovery and social reform with an emphasis on the development implementation on the recovery of industry and trade, tourism, and investment; reform of the national health system through strengthening the Healthy Living Community Movement (Gerakan Masyarakat/GERMAS), health security, and health sector resources; reform on social protection system by increasing the accuracy of distribution and integration of various social assistance and security programs; and reforming the disaster resilience in pre-disaster times and strengthening of response operating systems during emergencies and disasters, both natural and non-natural. In accordance with the policy direction, the development strategy is outlined in seven national priorities, which are the seven development agendas in the RPJMN 2020-2024. 

In addition to the RKP, there is also RKPD. RKPD is an elaboration of the RPJMD and refers to the RKP, containing the draft of the regional economy framework, regional development priorities, work plans, and their funding, both implemented directly by the government or pursued by encouraging participation public.

Head of Regional Development Planning Agency initially prepares the draft of RKPD. Furthermore, the Head of Regional Development Planning Agency will hold a development planning meeting for the preparation of RKPD. Development planning meeting for the preparation of RKPD is carried out no later than March. Head of Regional Development Planning Agency will prepare the final draft of RKPD following the result of the development planning meeting to prepare RKPD. Then, RKPD will be determined in Regional Head Regulation.