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3. Project implementation.

3.1 The Project was led by the Director General of Communicable Disease Control and Environmental Health in the Ministry of Health (DG-CDC/EH). An advisory Steering Committee was chaired by the Secretary-General of the MOH. The Bank loan supported the creation of a special HIV/AIDS and STDs Program Management Unit (PMU) reporting directly to the DG-CDC/EH. The Unit was to be responsible for planning, coordinating, monitoring, and evaluating all HIV/AIDS and STD-related work within the MOH. It was to provide technical assistance to local health agencies and to facilitate links with the National AIDS Commission. Beyond the Bank-financed Project, the PMU was to be responsible for coordination of all other donor assisted activities in the MOH related to STDs and HIV/AIDS. These broad responsibilities justified the name 'Program Management Unit', as distinct from a 'Project Management Unit.' However, while an MOH DG CDC-EH implementation decree of December 1996 gave the PMU responsibility for coordination of all donor-assisted projects, it described the PMU as a Project Unit without a permanent structural position within the Indonesian public administration. It thus appeared to undermine the institutional development objective of strengthening MOH structures to address HIV/AIDS. (11) As with other investment projects, Bappenas retained overall responsibility but was not engaged on a daily basis.

3.2 The Project was approved in February 1996, and the Bank loan became effective in May of that year. Project completion was expected by the end of March 1999. The Project faced difficulties from the beginning of execution. A one-day project launch workshop was held, but only at the end of July 1996 and apparently without participation of the task manager or other Washington-based Bank staff. The initial supervision mission, in September 1996, reported that a delay in availability of project funds apparently attributable to inadequate budget planning within the GOI was delaying central and provincial execution. The terms of recruitment of the Project Manager were unclear, and there was considerable lack of clarity regarding the planned work with NGOs. Responsibility for baseline surveys was being debated among the units tasked with carrying out different components of the Project. Overall, the initial supervision mission found the Project to be 'starting in a disappointing fashion.' Looking back, these are signs of limited readiness for implementation.

3.3 The second supervision mission, in February 1997, also reported significant delays, and the PMU was thought not to be in a position to manage the Project effectively. The PSR rated implementation progress and development objectives as satisfactory, while project management was unsatisfactory. Shortly thereafter, only about 15 months after loan effectiveness, the East Asia financial crisis hit Indonesia, and the attention of policy makers in both and GOI and the Bank was understandably devoted to issues more urgent than the HSPMP. The September 1997 supervision mission rated the Project unsatisfactory on implementation, though still satisfactory on development objectives because of progress on some components. The Bank's follow-up letter stated that, if in a further six months the rating remained unsatisfactory, the Bank would seek to discuss possible restructuring or, if necessary, closure of the Project.

3.4 Because of inadequate management, limited support within the MOH, and lack of evidence to demonstrate that HIV was actually spreading in the Indonesian population, the HSPMP was in a very weak position when the financial crisis hit Indonesia in July 1997. Other donor-financed health projects, including other Bank-financed projects for provincial health services, iodine deficiency control and safe motherhood, weathered the storm without major cancellations. Collapse of the whole health system was a real possibility at the time, while the number of HIV/AIDS cases was very low. Very little work occurred on the Project, post-crisis. A supervision mission in June-July 1998 reported that the MOH and Bappenas had decided to cancel approximately 80 percent of the loan. This was formally confirmed at the time of the initial restructuring of the entire Bank portfolio, in August, 1998, in the wake of the financial crisis. Of the $5.0 million remaining in the loan, over $3 million had already been disbursed. The cancellation took place following months of effort by the staff to turn around the poor performance of the Project.

3.5 While no aspect of the Bank's portfolio escaped critical scrutiny, the HSPMP was cut much more dramatically than other projects. Had the Project shown reasonable prospects for achieving its objectives, the HNP staff would have endeavored to protect it. According to decision-makers in the Bank, the effort required to restructure and redesign the Project to the new circumstances of HIV and of Indonesia's rapidly decentralizing health system, combined with the risks of failure and the work required to ensure a management system and staff that would effectively function, appeared to outweigh the potential benefits. In retrospect, the decision to close almost all activities must be seen as a reasonable response by both the GOI and the Bank, since the Project, as designed, seemed to have lost its priority and relevance in dramatically changed social, political and economic conditions, and had clearly had lost its constituency among key Indonesian stakeholders. (12)

3.6 The management problems affecting the HSPMP touched procurement and financial management. Twice--in January 1998 and January 1999--the Bank advised the PMU that unless audited financial statements were received by the end of March, the Bank would not extend the closing date of the loan and would delay Board presentation of new loans benefiting the MOH. In February 1999 the Bank informed the Ministry of Finance (MOF) that auditors were unable to audit certain HSPMP expenditures because of lack of documentation. The Bank therefore required that the government deposit funds into the Special Account for the Project equivalent to the amounts for undocumented project expenditures. The auditors also found problems in procurement, excessive payment for travel, weakness in programming training activities, and distribution of EEC materials.

3.7 The underlying and unresolved managerial problems that affected the HSPMP appear to be related largely to role conflicts between the PMU and the main line agencies of the MOH concerned with the Project--the Directorates for Directly Transmitted Diseases (13) and for Epidemiology and Immunization, and the Centers for Health Education and for Health Laboratories. Furthermore, there were conflicts between MOH agencies themselves, such as between the directorates responsible for specific diseases and for epidemiology, on HIV surveillance. By being staffed with technical specialists as well as administrators, the PMU duplicated functions of the line agencies.

3.8 The fundamental notion to strengthen the position of HIV and AIDS within the MOH, both technically and in its institutional position within the hierarchy, was sound, and responded directly to the institutional development objective of the Project. Unfortunately, there was insufficient role clarification and consultation prior to agreement on the arrangements during negotiations on the Bank Loan and insufficient time during implementation to resolve problems. The Indonesian Project Manager was a health researcher with no experience of Bank-financed projects, while an administrator with deep knowledge of Bank operational policies and procedures but not from the health sector would probably have had fewer conflicts with other MOH units and been more successful in facilitating execution of the various Project components, though not necessarily in gaining greater institutional prominence for HIV/AIDS and STDs within the MOH hierarchy. In sum, the establishment of appropriate institutional mechanisms to address HIV and AIDS within the MOH seems to have been given insufficient attention as a design issue.

3.9 At Bank request, a dossier of policies and procedures relating to use of Project funds to support NGOs was prepared for review during negotiations on the loan. An annex based on these materials was included in the Loan Agreement, and details were recorded in the agreed minutes of the negotiations. However, these arrangements were not converted into appropriate internal instructions within the GOI, nor were they communicated to provincial financial authorities, who continued to operate for NGO contracting under pre-existing rigid MOF rules. It was only late in 1998--near the end of the execution of most Project activities--that a Bappenas-MOF circular was issued that resolved outstanding issues.

3.10 The Indonesian financial and political crises of 1997 and 1998 highlighted two weaknesses in the design of the HSPMP--short duration and weak monitoring and evaluation. As an effort to develop new institutional mechanisms for STD and HIV prevention and management, the Project would probably have required longer than the three years initially planned. Had a normal five-year implementation period been envisaged, a full mid-term review (MTR) could have been built into the Project, with substantial mid-course correction. The Project was labeled a pilot. A true pilot would have included an evaluation design, establishment of control populations, and baseline surveys before initiation of project prevention activities. While large numbers of performance indicators were established during Project preparation and appraisal (Annex D), 'baseline' surveys were executed only in the third year of the Project when it was already near closure.

3.11 The flexibility reported as an important strategic element in the SAR was a positive design feature but did not work out in Project implementation. Bank resources were conceived to be used as a complement to other donor funding. The notion of complementarity was reflected in the assignment of responsibility for coordination of all donor-financed HIV/AIDS projects to the PMU, but was not adequately reflected in the specific management arrangements within the MOH. The assignment of responsibility for donor coordination to the PMU was never realized in practice, and was largely unknown in the donor community. The flexibility underscored in the SAR could have made the Project into an evolving tool for GOI response to a changing, poorly understood disease that was potentially threatening but only in ways that were not fully understood at the time of Project design. No MTR, with the possibility for correction and changing course, was foreseen in the SAR or in the Loan Agreement. There was no provision for annual reprogramming and updating of work programs, aside from consultant services, fellowships and training, or for a project implementation manual. Management advised the task team prior to negotiations that, given the pilot nature of the Project, it was important to build in the possibility of change after initial experience. The decision not to draw upon instruments widely used in other Bank-financed operations, such as a project implementation manual, an MTR, and annual work programming, seems to have been driven by the short duration of the Project as designed.

3.12 The early discussions within the Bank and with the Indonesian authorities concentrated on high-risk populations, but the project as appraised diluted this to an emphasis on behavior change through (i) increased knowledge of HIV risks while reinforcing traditional values and norms 'within the population'; (ii) enhanced skills in risk reduction for those engaged in high-risk behavior; and (iii) promotion of the use of STD services. Further dilution occurred during implementation.
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Title Annotation:Indonesia HIV/AIDS and STDs Prevention and management project
Publication:Indonesia - HIV/AIDS and Stds Prevention and Management Project
Date:Jun 1, 2005
Previous Article:2. Project objectives and design.
Next Article:4. Outputs and outcomes, by objective.

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