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Indonesia’s Development Plan

Indonesia’s Development Plan

Development plan 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, the development plan is divided into RPJP, RPJMN, and RKP as elaborated hereunder:

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Long-Term Development Plan/Rencana Pembangunan Jangka Panjang (RPJP)

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RPJP is a planning document 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:

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

 

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 (RPJPD)​​

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While national development is steered by RPJPN, the provincial/regional level has RPJPD, which basically follows the RPJPN. RPJPD is regulated under the respective Regional Regulation.

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Medium-term Development Plan/Rencana Pembangunan Jangka Menengah (RPJM)

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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:

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

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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:

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  • harmonization and synchronization of regulations and policies between sectors and regions;

  • 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;

  • reformation of manpower through the: 

    1. creation of a conducive manpowered climate, supported by dynamic yet harmonious industrial relations;

    2. strengthening of collective bargaining

    3. improvement of regulatory frameworks regarding manpower;

    4. improvement on expertise and productivity of manpower;

    5. improvement on the involvement of regional governments, and improvement on the protection of domestic and foreign workers;

  • strengthening of business competition policy and institution;

  • improvement of capacity, capability, and competitiveness of SoE through, among others, the formation of holding SoE and international market exploration.

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Medium-term Regional Development Plan/Rencana Pembangunan Jangka Menengah Daerah (RPJMD)​

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The RPJMD provides a detailed description of the vision, mission, and program of the Regional Head, whose preparation is guided by the RPJPD and in lieu of the RPJMN, contains regional financial policy directions, regional development strategies, general policies, programs of regional apparatus work units, cross-regional apparatus work units, and regional programs accompanied by work plans within the regulatory and indicative funding framework.   In terms of timelines, the RPJMD will be determined in a Regional Head Regulation no later than 3 (three) months following the inauguration of the Regional Head. 

Government Work Plan/Rencana Kerja Pemerintah

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The RKP is a 1 (one) year planning document f.  The RKP is an elaboration of the RPJMN, which contains developmental priorities and the draft of a 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.  The RKP has become the guide for the preparation of state budget design.  Moreover, the RKP is determined in the Presidential Regulation.  

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In particular, the RKP 2024 is regulated under PR No. 52/2023 where it carries the  theme of  “Accelerating the Transformation of an Inclusive and Sustainable Economy”.  The aim of the RKP  2024 is specifically to enhance effectivity in responding to the consequences that arise  from COVID-19, to make conducive situations via law enforcement and security in a stable political situation, along with an increased role and leadership of Indonesia at the regional and global levels.  Since the new presidential election will be commenced in 2024, the RKP 2024’s aim is  to garner political stability for the General Election 2024 succession and will be a foundation for development in the following period.  As such, RKP 2024 stipulates 8 (eight) national development policy directions, which are as follows: 

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  • reduction of  poverty and elimination of extreme poverty;

  • Improvement of the quality of education and health services;

  • Revitalization of industry and strengthening applied research;

  • enhancement of business competitiveness;

  • pursuing low-carbon development and energy transition;

  • accelerating the development of basic infrastructure and connectivity;

  • accelerating the development of the Indonesia’s new capital city (IKN); and

  • conducting the General Election 2024.

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Further, the RKP 2024 identified 7 (seven) National Priorities, which are the same principles stipulated under the RPJMN in Section 2.2.1 above, as the main development agendas for 2024. Furthermore, the Government listed 16 (sixteen) Major Projects, which have been deemed crucial to the achievement of  the 7 (seven) National Priorities, namely:  

 

  • prioritized industrial area and smelters;

  • integrated small and medium businesses (UMKM) management;

  • renewable energy and energy conservation acceleration;

  • food estate;

  • prioritized tourism destinations;

  • cultural reserves of Papua: Laa Pago and Domberay;

  • Development of Indonesia’s new capital city (IKN);

  • national social protection system reformation; 

  • national healthcare system reformation; 

  • education and vocational training for Industry 4.0; 

  • accelerated reduction in maternal mortality and stunting;

  • improved access to piped potable water (10 million home connections);

  • access to safe sanitation (domestic wastewater) for 90% (ninety percent) of households;

  • integration of the main port network;

  • digital transformation; and

  • construction of hazardous and toxic waste processing facilities.

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In addition to the RKP, there is also the RKPD. The RKPD is an elaboration of the RPJMD and refers to the RKP. It contains the draft of the regional economy framework, regional developmental priorities, work plans and their funding. Both are implemented directly by the government or pursued by encouraging public participation .  

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The 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. 
 

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