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Indonesia- Indonesia- Formulation of Strategic Guidelines for Poverty Reduction with Sustainable

Development Principles

Integrated Assessment and Planning for Sustainable Development

Second Review Meeting

Geneva, September 21-22, 2005

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Jakarta Les Village, Bali(case study area)

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Background of the Study

• Initial focus on formulating strategic guidelines for poverty reduction– The poor rely heavily on natural resources & environment – The poor lives in degraded environment

• Therefore, poverty reduction should not further degrade the environment

• At that time PRSP was drawn up and not incorporating environmental aspects into the strategy

• The study will make use of lesson learned from a case study that is able to show the strength of sustainable development in practice and adopt ‘best practices’

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Changing Focus• PRSP begun 2 years prior to IAP team and at its stage of completion,

the IAP team was not able to engage in full process in integrated assessment

• However, IAP team come up with substantive suggestions for PRSP on how to integrate environment into policy consideration

• The importance of site-level, real case, multi stakeholder activities that designed with careful considerations of environmental, economic and social aspects, for poverty reduction

• It was decided that the last ‘leg’ of the IAP will focus on identifying and promoting ‘case’ study that showcase the integration of sustainable development consideration in poverty alleviation.

• Two objectives are sought: (a) contributing to the PRSP process; and (b) explore real case study as a model (poverty reduction, environmental protection, trade)

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Process and Methods

• Weekly Meetings (IAP Team)• PRSP Public Meetings• SC Meetings• National Workshop• Workshop with UNEP Team• Participation in the Finalization of the PRSP • Case Study (Regional Visit)• Meeting with UNEP Team

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Stakeholders Involvement

• Ministry of Planning, Ministry of Environment, Trade and Industry, Home Affairs, Labour and Transmigration, Foreign Affairs, Forestry, UNDP, CII

• Environmental Groups, Private Sectors, Academics, Local NGOs

• Workshops, Group Discussion, Regional Visits

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A review of relevant past and present work

Overview of Existing Natural Resources & Environment Policies

Identification of Information Network and Its Institutionalized Mechanism

Identification of Relevant Policies and Programs

Developing Criteria and Guidelines for Evaluation

Evaluation of On-going and Executed Policies and Programs

Poverty Reduction Strategy with Sust. Dev.

BACKGROUND PAPER

Policy and Program Review

Policy and Program Formulation

Case Study

Condition, Issues, and Models of Poverty

Reduction

Poverty Reduction Strategy

Poverty Reduction Policy/Program and

Monitoring/Evaluation System

PRSP 2004-2015Document

Description of the Planning Process

To obtain lesson-learned on the link between poverty, environment and trade

2004 2005

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Indonesia PRSP formulation

Economic issues Environmental issues Social-cultural issues

- Don’t consider the impact of International trade on the poor in a comprehensive manner

- Site level sustainable community enterprises are not explicitly promoted,

- Macroeconomic policies are not pro-poor and worse, are too pro-business

- Disregard rapid loss of natural resources

- Disregard degradation of environmental quality

- Disregard loss of biodiversity

- Poverty issue do not seen as a multidimensional matter

- Do not explicitly recognize local and traditional communities’ access and rights to natural resources

- Recognize that law enforcement is necessary but do not have a strategy to enchance it

Interaction between different issues:- macroeconomic policies should not expedite the loss of natural resources but rather directed at

conserving them- incentives must be put to both conserve and/or rehabilitate natural resources as well as enhance

livelihoods- the poor’s access and rights to natural resources should be part of poverty reduction strategies- laws related to natural resource exploitation, especially regarding illegal utilization, must be

enforced- international trade can be a force for optimizing income and conserving resources if rights accrue

to local communities

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Criterias

Economic Issues

•Livelihood system

•Level of local dependence on natural ecosystem

•Identifying an incentive system for maintaining the natural ecosystem

•Vulnerability of local livelihoods to environmental degradation

•Understand the value of “competing” products from the natural ecosystem as potential threats

Social

Issues

•Poverty incidence

•Population/household density

•Population growth rates

•Access to social and physical infrastructure, such as health services, education, etc.

•Employment rates

Environment Issues

•Environmental functions of the surrounding ecosystem are maintained

•No destruction of natural habitats

•Existing external threats and pressures on the natural ecosystem

•Understanding of the environmental threshold and resource limits

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Lesson Learned from PRSP

• Lack of Data on the correlation between ecosystem status, social conflict and economic development; especially difficult is to argue for ecosystem restoration programs as part of poverty alleviation

• It is increasingly realized that environment pro-poor strategies need to be integrated with sectoral strategies (i.e. health, fishery, agriculture, housing etc)

• More resources (money, staff, time) for ecosystem restoration and for shifting from extraction-based activities to a more increased value-added

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Lesson Learned from PRSP

• PRSP is a moving target started much in advance of the IAP; shifting focus; lack of environmental personnel; lack of engagement of technical sector (forestry, fishery, mining & energy)

• Understanding of sustainable development principles widely varied among stakeholders; and assessment of previous policies and programs need to first be based on common baseline

• IAP guidelines useful in evaluating the PRSP in a systematic manner, however need to ensure adequate understanding of substance and process to which IAP is applied.

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Case Study : Les Village, BaliTo explore the connections among poverty alleviation, environmental protection, and sustainable trade.

~ 1980s : - Les Village was a poor traditional village1980~1990s : - Tourist boom, high demand on

tropical fish- Lack of awareness ►destructive

fishing practices (potassium, cyanide, explosives)

- Lack of support from local government

- Coral reefs was destroyed, the fish was gone.

1990~2000s : - Awareness campaign by local NGO (Bahtera Nusantara)

- The NGO introduced ‘artificial reef’ ► introducing environmental friendly fishing practices to the community.

- Coral reefs recover, the fish is back

2000~present : - Les Village is a certified tropical fish producer/trader

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Coral Breeding and Fish Trade

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Economic issues Environmental issues Social-cultural issues

- Decreased fish catch mean more spending on food and increase in school fees and transport costs

- Improve their own life through environmental betterment, i.e. sustainable fishing practices

- Increased knowledge of market demand lead to better prices of fish and better bargaining power

- Cultivation of trade of coral in sustainable way

- With improved income the villagers can start send children to school and savings

- Coral restoration and the cyanide-free is now part of the formal local customary laws

- Creation of a model of a sustainable ornamental fishery through community-based coral and fish monitoring

- Improvement of community’s livelihood through eco-trading

- The youth to stay or return to village rather that migrating because more jobs are available and more income created

- Improvements in infrastructure facilities

- Increased in woman involvement in the fisher group and have share in the community-owned company

- Better fish catch and pricing will release women’s domestic burden and will send more girls to higher education

CASE STUDY

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Initial Effects/Criterias Applied in Case Study (Coastal Village)

– rehabilitation of the coral ecosystem and a return of many fish species previously lost;

– better quality fish that is more likely to survive transport and confinement for longer periods, and with no damage to its skin and color;

– less time and effort to collect equal amount of fish than by squirting poison;

– the attention of international and local organizations.– The villagers have part ownership of a company which

can directly ship for export, and have even resorted to coral breeding, a difficult undertaking even by the standard of expert biologists). Villagers undertake breeding to both rehabilitate the reef ecosystem and to supply the live coral trade.

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Some gaps from the case study• The lack of attention and support by the local government. The local government seems to have no

inkling of what has been achieved by the villagers, though the group in Les Village have flourished despite the lack of government facilitation.

• The lack of capacity in an important sector locally has meant that the local government only pays attention to the sectors it does understand, which unfortunately do not have strong linkages with the poor. This seems to exacerbate the case of persistent poverty in the area.

• Market mechanisms have allowed the villagers to take advantage of international demand for local products. To be able to fully take advantage of this international demand, and the premium price that comes along with the sustainable harvesting method, however, villagers need a certain institutional support and cooperation from those around it, i.e. other stakeholders in the live-fish trade. Without the larger enabling environment—including regulatory support perhaps in the form of a sustainable harvesting certification system—villagers are less able to fully take advantage of the benefits of international prices to optimize their income.

• The lack of adoption of this local model elsewhere. Although Les Village fishermen have vehemently maintained that the sustainable harvesting method they use is far more superior economically that squirting method, other fishers in the area (not even the neighboring villages) are not yet adopting the same measure even though they have been invited to observe and train with the Les fishers.

• We attribute this to the lack of facilitation on the part of these other fishers, which is further evidence. The team found in many cases of various scale and type in Indonesia, facilitation for communities is perhaps even more important than equipment and tools, which can come later by communities’ own efforts. But equipment/tools—especially novel ones—without facilitation will more likely languish and be discarded or abandoned.

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Economic/Trade effectsIndicators Before After Scaling UpVolume of trade in ornamental fish and other biota

Volume of trade uncertain since fishers did not work on purchase order

Volume of trade increasing; fishers only catch what was being ordered. Less waste of fish

Volume of trade increased according to order; Less wasteful catching of ornamentals

Price at the fishermen level

Price at the fishermen level (farm gate) very small percentage of traded value

Fishers had stake on exporting company, so international price received also accrued to fishers

Price at fishers level increased

Revenue of Export company

Revenue went to individual exporter

Some revenue went to fisher group as well

Some revenue went to fisher group

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Environmental effects Indicators Before After Scaling Up

Number of fish catch

Decreasing due to destructive fishing practices

Increasing and some species lost have coming back

Ornamental fish diversity increase

Coral Reef Recovery Rate

Damaged due to cyanide and bombing practices

Gradually restored and replicated in other areas

Coral Reef cover and diversity increase

Distance to Harvest

Need to sail farther another areas

Shorter journey and collection points

Job opportunities in other areas

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Social effects

Indicators Before After Scaling Up

Village Capacity Building

limited Introduced to various community activities

Active players in community activities

Village Facilities Limited and in poor conditions

Improving and self-help

Diversifying business activities

Reduced Social Conflict

Increased due to competition from other villages

Reduced and better law enforcement

Harmony with other sectors

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Recommendations

• Further Research on rights, criterias and indicators• The ‘Buy-in’ process...from Best Practices to Concrete Policy• Incentives for sustainable practices..• Replications to other areas• Promoting inter-regional cooperation in utilizing and conserving

natural resources and environment• The role of local community• Improved targeting for policy and poverty reduction program • Entitlement of the poor over natural resources • Fair and just law enforcement, particularly regarding illegal

natural resource utilization and ecosystem destruction

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Next Steps

• SC Meeting

• 2nd National Workshop

• Final Drafting