Bureaucracy Reform for a Better Indonesia

In order to improve performance and fight against corruption, Indonesian government has reformed its bureaucracy. As one can see, the reform has been started from the Ministry of Finance (MoF) as one of the largest and most influential government institution. In the late of 2002, Directorate General of Taxation (DGT) as one of the units in MoF introduced a new system and opened modern tax offices dealing with taxpayers. In the mean time, MoF proposed three bills to amend the national financial management to parliament and passed in 2003. Immediately after MoF gained its full mandate from president and parliament, and as the pilot project in DGT showed an increase in tax revenue collection, MoF enlarged the scope of modern tax offices and reformed the tax court system.


In the mid of 2004, MoF started the comprehensive bureaucracy reform involved its 62,000 employees within 12 directorate generals. The action focused on three pillars of reform as: organizational transformation, business process improvement, and human resource development. In order to transform the organization and shape the function, it has changed several units, created tens, and merged few. Under business process improvement, it has produced almost 7,000 standard operating procedures as the public service guidance to omit red tape practices. Meanwhile, it stimulated employee to be well-perform by introduced a better reward and punishment system. Then, from 2007, MoF provided better salary to increase employee’s welfare and prevent moral hazard. Overall, the whole process has changed fundamentally the way of business in MoF from a closed and costly institution to an open and efficient one.


As one can see, there are several results of the reform. During in 2008, the increasing of tax revenue collection reached 120% above the target. For 2009 budget, MoF has reached the projection of 1,000 trillion rupiahs. In addition, public acknowledged better performance in MoF as the higher of customer’s satisfaction index and the lower corruption index showed in latest surveys.


In conclusion, the success story of bureaucracy reform in MoF has inspired Indonesian people to continue the reform process. Nowadays, the reform involves also several government agencies and gradually changes Indonesia become a better and prosperous country.