Three government institutions, Bank Indonesia ( BI ), the Finance Ministry and the Home Ministry, say they are committed to strengthening their coordination and cooperation to speed up economic and financial development in the regions, as outlined in a memorandum of understanding ( MoU ) signed in Jakarta on Friday.

BI Governor Agus Martowardojo said the cooperation would be focused on three strategic activities, namely the synchronization and synergy of policies to accelerate the implementation of structural reform programs, the exchange of data and information and analysis related to economic and financial development in the regions and the establishment ofa regional forum for financial and economic coordination.

“Through this forum, various strategic issues will be discussed to produce policy recommendations on economic and financial development in the regions,” said Agus. He added that it was expected the forum could further integrate various forums, activities and initiatives related to economic and financial development in the regions.

Earlier, the government formed regional inflation control teams ( TPID ) to control inflation in the regions. Currently, there are 451 TPID set up across the country.

Agus explained that during the 2005 to 2010 period, Indonesia’s inflation rate stood at 8.5 percent. In 2010 to 2015, it went down to 5.8 percent and by the end of 2015, it had further declined to 3.35 percent. As of March 2016, Indonesia’s inflation was 4.45 percent.

The central bank governor said through closer coordination of the central government and local administrations, Indonesia’s inflation was expected to fall below 5 percent.

“With the regional coordination forums, it is expected that economic growth in the regions will improve, which will eventually boost the people’s welfare,” he added.

Finance Minister Bambang Brodjonegoro said the central government urged all local administrations to use their regional budgets efficiently. With an increase in regional transfer funds, it was expected all regions could contribute to the country’s economic growth.

“The transfer funds will decrease the burden of the central government but it is also expected that economic growth should increase, driven by the improved economy of the regions. Overall, it should begin with sound spending policies,” he explained.

In the 2016 state budget, the central government is set to transfer Rp770 trillion ( US$58.20 billion ) to regions and villages throughout the country.