Capacity Building for Integrated Assessment and Planning for Sustainable Development in

Indonesia: Formulation of Strategic Guidelines for Poverty Reduction with Sustainable

Development Principles (S G P R)

UNEP Initiative on Capacity Building for Integrated Assessment and Planning for Sustainable Development

Mid Term Review Meeting

Geneva, 16-17 February 2005

Indonesia at a glance :

Land area : 1.9 million sq.km (17,000 islands, of which 6,000 are inhabited)

Population : 214 million (2002), 60% live in Jawa-Bali

GNP : US$ 145 billion (2001)Pct Income : US$ 680 (2001)Ave. Growth : 3.8% p.a. (1991-2001)

Contribution of economic sectors to GDP : Agriculture 19%, Industry 43%, Services 38% (2000)Life expectancy : 66 years (2000)Literacy rate : 87% (2000)Share of poor population : 7.4% (2003, US$ 1 per-day)53.4% (US$ 2 per-day) 18.3% (2100 calories per-day)

Poverty Figure in Indonesia*

40.1

33.3

13.711.3

23.4

28.6 26.9

21.6

17.4

15.1

24.2

19.1 18.3

17.9

0

5

10

15

20

25

30

35

40

45

19

76

19

78

19

80

19

81

19

84

19

87

19

90

19

93

19

96

19

98

19

99

20

00

20

01

20

02

Year

Pe

rce

nta

ge

(%

)

Rural

Urban

Rural+Urban

* The Poverty Line is calculated based on food adequacy or food consumption of 2100 calories per person per day

Overview of Past Poverty Reduction Strategies

• Poverty measures: – 17.4% or 37.4 mio (2003) using 2,100 cal/day– USD 1/day or 7.4%– USD 2/day or 53.45%

• relied on borrowed vision of the future (i.e. from the Indonesian Millennium Development Goals) not wholly derived from the results of the analysis phase;

• do no address the trade-offs required to successfully address poverty alleviation given the various sectoral priorities and needs which are not necessarily oriented toward the poor;

• lacked recognition of the environmental and natural-resource dimension to poverty alleviation;

• lacked delegation of authority and division of labor to implement the strategy (i.e. it is not clear which agencies are responsible for implementing the strategy, and also not clear how the wider public can use the document);

• do not clearly delineate how the strategy builds on previous and current poverty reduction strategies.

Current Situation with PRSP (2001-2004)

Economic 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-businessSosial Issues:• 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

enhance itEnvironmental Issues:• Disregard rapid loss of natural resources (deforestation rate 2.4%/yr)• Disregard degradation of environmental quality• Disregard loss of biodiversityParticipation Process: very week although well in paper

General Objectives

• Enhance the capacity of Indonesia to effectively integrate economic, social and environmental considerations into planning processes in order to promote sustainable trade, alleviate poverty and environmental management.

• Strengthening environmental, social and economic institutional cooperation and coordination.

• Facilitating the design of integrated policies, plans and programmes that take into account economic, social and environmental aspects of sustainable development.

• Contributing to the country’s commitment to achieving the goals set out in the WSSD Plan of Implementation regarding trade as a tool for achieving sustainable development, poverty reduction and the use of environmental and integrated assessment as a means of encouraging relevant authorities at all levels to take sustainable development considerations into account in decision-making (WSSD Plan of Implementation paragraph 18).

Expected Outcomes

• Enhanced understanding between the linkages between trade, environment and poverty alleviation.

• Enhanced national institutional and human capacities for undertaking strategic integrated assessment and planning for sustainable development

• Enhanced national coordination among the government institutions involved in the project

• Enhanced capability of policy-makers to design and implement comprehensive policies and measures for sustainable development in central and regional govt

BACKGROUND Documents:

•WORK PLAN

•CONCEPT PAPER: Links between Poverty, Trade and Environment (Case Studies)

•Proceedings

•Strategy

•Action Plan

General Strategy:

FINAL PAPER INPUT FOR PRSP

Tools and ApproachesProblem Analysis: PRSP from initiation (Presidential Decree,

2001), Strategic planning and Operation planning, and proposed monitoring (Expected completed 2004)

Power Relationship Analysis and Inter-Dept Profiles: Understanding the roles and responsibilities and power relationship within sectoral dept and local governments on PRSP

Key Informant Interviews with the PRSP team previous and new lead agencies

Stakeholder Analysis and Workshop: national, regional and experts

Focus Group Discussions: On Environment, Social and Economic plus possible linkages from regional to central govt using available Natural Resource Status and Environmental Atlas

Operational Actions

1. Steering committee: provide overall guidance for the project incl review concept paper, guidance on National Workshop

2. Technical committee: overseer of day to day implementation

3. Writing team: implement assessment agenda, formulate substance and resulting documents, provide input toward PRSP drafting

Steering Committee: CII, Bappenas, KLH, UNDP, Ministries of Forestry, Trade and Industry, Home Affairs, Labor and Transmigration and Foreign Affairs

Technical Committee: CII and Bappenas

Project finance and administration: CII

Meetings coordinator:

CII and Bappenas

Writing Team: CII, Bappenas,

and KLH

Stakeholder Involvement

• CII, Bappenas, KLH, UNDP, Ministries of Forestry, Trade and Industry, Home Affair, Labor and Transmigration and Foreign Affairs

• Environmental Groups: Government, Non-Government, Private Sector, Academics

• Local Government, Local NGOs• Workshops, Group Discussions, Regional Visit• New Initiatives through UNDP

Activities and output

Activities: Writing team periodic meetings; Steering Committee meeting; assessment meetings with environmental stakeholders; attendance at evaluation meetings for the PRSP; National Workshop; workshop with UNEP Team; participation and input into PRSP drafting; Regional Workshop and stock-taken

Output: Background Paper; Input to the PRSP

Output in progress for immediate completion: Revised Background Paper; Draft Concept Paper linking trade, poverty and the environment; regional assessment

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/Evaluati

on System

PRSP 2004-2015Document

Description of the Planning Process

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

2004 2005

Preliminary ResultsProcess:• PRSP is a moving target: started much in advance of the

SGPR and shifting focus; lack of environmental personnel; lack of engagement of technical sector (e.g. forestry, fishery, mining & energy, etc)

• Understanding of sustainable development principles widely varying 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

Preliminary Results

Substance:• 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 environmental pro-poor strategies need to be integrated with sectoral strategies (i.e. in health, agriculture, housing etc) rather than stand-alone strategies. Trade-offs need to be articulated at the sectoral level, i.e. more resources (money, staff time, extension) for ecosystem restoration and for shifting from extraction-based activities to measure to increase value-added

Policy Review Results

Substance of policy review regarding poverty alleviation in Indonesia:• Reality: environmental depletion and degradation rate are high;

they are partly resulting from previous policies and programs• Given high dependency of the Indonesian poor (rural, agricultural-

based people) on the environment poverty alleviation strategies should not further degrade the environment and should focus on ecosystem restoration

• Ecosystem approach to poverty targetting: coastal and marine ecosystem, agro ecosystem, forest ecosystem

• Trade aspect is very important especially on two fronts: 1) trade liberalization in agricultural products, 2) international demand for natural resources as pressure for unsustainable extraction methods (illegal logging and fishing)

• Positive linkages between trade, poverty alleviation and the environment best demonstrated through their interaction at the site level: case study of Kabupaten Buleleng, Bali

Interaction between different issues

• 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

Main Strategies for PRSP (2005-2015): Results from SGPR Team Lobbies (# 5)

• Opportunity-creation. The creation of employment or entrepreneurial opportunities for the poor.

• Community empowerment. The enhancement of community institutions to, among others, enable the poor to access information and participate in formal decision-making processes.

• Capacity-building. The enhancement of the ability of the poor to be more productive through investments in health, education, and training.

• Social protection. The creation of social insurance, social support/assistance and social savings mechanisms and program, and the promotion of traditional social safety nets.

Results from Team SGPR : Global Partnership for Poverty Reduction. The strengthened global network to establishing partnership in poverty eradication. The Indonesia PRSP also endeavored to integrate gender, governance, decentralization, and environmental issues into the strategy.

Some substantive priorities PRSP (2005): Results from Stakeholders and Focus Group

• “ Rights-based Approach” Move from Min. of Welfare to Min. of Planning

• poverty is not just a problem of inadequate income, but also about deprivation of human dignity, of an overwhelming sense of the lack of voice, power, and choices. The problem of poverty is characterized by poor health, lack of basic education and skills, insecurity, inadequate access to land and other assets, vulnerability to economic shocks, natural disasters, social conflicts and other risks.

• A pro-poor stance should be promoted and adopted if poverty alleviation strategies are to have any chance of being successful.

Criteria and Selected regional Governments for IAP Workshop:

• Selection Criteria: poverty incidents, geographical balance, indicators of strong links between poverty, environment and trade issues, and a model of collaboration amongst traditional community, NGO, and private sector in creating alternative incomes in sustainable ways

• Traditional cinnamon farmers near Kerinci Seblat National Park. There are 248 lots or 203 hectares in Rantau Kermas village; while Renah Alai village has 66 lots encompassing 95 hectares.

• Vanilla and Coffee Farming in Dairi, North Sumatera and Aceh (Gunung Leuser National Park)

• Ornamental Fishery in Les Village, North Bali

Lesson Learned from the Case Study: Les Village, in North Bali

• The Fish are Back !• 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.

– Lack of attention and support by the local government– 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

Lesson Learned from the Case Study: Les Village, in North Bali

Expected Intervention from SGPR team:

-Adoption by local parliament and local govt on the tools and mechanism as demoistrated by local case studies

-Stimulate central government to adopt the tools and mechanism put into PRSP document (Boxes)

-Participatory principle that was carried out should be adopted and replicated by local govt planners

Challenges and Opportunities

• Adoption of flow and mechanism of SGPR for PRSP by Sectoral Depts and Regional Governments

• Keeping SGPR team for safeguarding the PRSP programs in the most very fast changing Govt officials

• Distribution SGPR documents to wider stakeholders

NEXT STEPS

• Steering Committee Meeting

• National Workshop II

• Series of Discussions

• Focus Group meetings

• Final Drafting