Cash Management Reform in Indonesia : Making the State Money Work Harder
During the last decade, a body of common practices has emerged among developing countries on the legal, institutional and procedural foundations to support efficient cash management. These common practices have been reviewed and documented in guidance notes and publications on international practices issued by multilateral institutions like the International Monetary Fund (IMF), the World Bank (WB), and the Organization for Economic Co-operation and Development (OECD). Additionally, frequent peer-to-peer exchanges of experiences between countries have resulted in the continued evolution of cashmanagement practices to leverage improvements in data management, ICT and banking systems. The first part of this chapter examines international practices with regard to setting the objectives, as well as the legislative and institutional arrangements for cash management. It details the objectives and principles of cash management, its links with policy issues, information technology needs, incentives and sanctions to promote implementation, and the sequencing of the reform. The second part of the chapter describes Indonesia s experience with setting the objectives and institutional arrangements related to cash management, and with sequencing of the cash management reform. The concluding part describes the remaining challenges and suggests the way forward.
| Summary: | During the last decade, a body of common
practices has emerged among developing countries on the
legal, institutional and procedural foundations to support
efficient cash management. These common practices have been
reviewed and documented in guidance notes and publications
on international practices issued by multilateral
institutions like the International Monetary Fund (IMF), the
World Bank (WB), and the Organization for Economic
Co-operation and Development (OECD). Additionally, frequent
peer-to-peer exchanges of experiences between countries have
resulted in the continued evolution of
cashmanagement practices to leverage improvements
in data management, ICT and banking systems. The first part
of this chapter examines international practices with regard
to setting the objectives, as well as the legislative and
institutional arrangements for cash management. It details
the objectives and principles of cash management, its links
with policy issues, information technology needs, incentives
and sanctions to promote implementation, and the sequencing
of the reform. The second part of the chapter describes
Indonesia s experience with setting the objectives and
institutional arrangements related to cash management, and
with sequencing of the cash management reform. The
concluding part describes the remaining challenges and
suggests the way forward. |
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