The main objectives of the CountryProcurement Assessment Review (CPAR) are to diagnose thepublic procurement system in Indonesia, assess actualcompliance with the country's procurement laws andregulations on the ground, and identify reforms to improvethe existing system in line with internationally acceptedprinciples. Section 1 gives an overview. Section 2 describesIndonesia's existing public procurement regime and keyissues. Section 3 discusses implications of decentralizationfor public procurement. Section 4 describes the strategy forstrengthening fiduciary safeguards in Bank-financed projectsbased on lessons of experience and findings of the CPAR.From all accounts, the public procurement system inIndonesia does not function well. It is not market-driven,has been prone to misuse and abuse, and reduces value formoney for public funds. The report identifies the keyreasons why the system does not yet function well. Thereport suggests the following priority actions toward areformed procurement process: a) reforming the legal,regulatory, and institutional framework; b) increasingcompetition; c) improving procedures and practices; d)building professional capacity; e) preparing fordecentralization; and f) strengthening enforcement.
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