funds allocated for human resources development and dissemination of study results.  The 

Secretariat was to work under the guidance of the Project Coordinating Committee (PCC) and 

the Project Working Group (PWG).  Through a consultation process with the GOI, twelve topics 

were selected for policy studies, and an additional five topics arising from counterpart needs, 

otherwise known as  demand driven policy input .  

During NRMP s mid term review, the issue of the policy studies  inadequate impact on policy 

change was apparent.  Suggestions for improvement involved reducing the number of studies 

and hiring recent university graduates to work as assistant policy analysts on a project by 

project basis and to replace the official counterparts, who were never provided.  In addition to 

their input for the study analyses, these graduates would also develop a policy network. 

Following this recommendation, a range of policy studies were completed within broad subject 

areas, which provided input to the GOI counterparts and clients of NRMP policy work for 

improving policy outcomes.  The expectation was that NRMP would undertake the analyses and 

dissemination of policy study results to clients and other stakeholders.  These stakeholders 

would then champion the policy study findings and over time enact new policies.  The following 

sections discuss some of the studies that were undertaken and some of the lessons learned 

from the experience. 

1.3.3  Trade Policy and Deregulation  

During establishment of NRMP s policy agenda on macro economic issues, the two major 

research themes requested and championed by the GOI were deregulation and labor 

absorption.  These were subsequently expanded to include a long term planning study to 

investigate linkages between the economy and environment. This section outlines NRMP s 

research findings on these three topics and includes a discussion of why these enabling policy 

studies failed to impact subsequent GOI policy orientation and formulation. 

Trade policies comprise perhaps one of the most important determinants of incentives within 

economic development.  Since the late 1980 s, Indonesia has continued to deregulate as it 

attempts to unwind the impacts of import substitution policies and meet increasing free trade 

requirements.  Although Woo et al. (1994) reported progress in reductions to overall levels of 

protection, relative levels of protection between sectors determines which sectors will attract 

resources in response to artificially high profit margins.  The relativity of protection is what 

determines whether deregulation will positively contribute to the GOI s sustainable development 

portfolio.  Relative levels of protection determine attractiveness of goods from each sector within 

the international market.  For sectors with low or negative levels of protection, the level of 

international competitiveness is higher; therefore, investment funds flow to these sectors to 

generate required export earnings.  Within a sustainable resources management context, the 

ideal arrangement is a high degree of neutrality between sectors.  An arrangement would result 

in investment funds flowing into the finished goods sectors such that smaller volumes of natural 

resources would be required for the same output value level.  

Deregulation has occurred through selective reductions in nominal tariff rates.  Non tariff trade 

deregulation has been less prominent in changes to trade and economic policy.  The extent that 

deregulation was intended to contribute towards sustainable development was, however, still 

unknown.  Therefore, NRMP counterparts recommended research to determine if cascading 

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