Australia-Indonesia Partnership for Rural Economic Development in Eastern Indonesia (AIP-Rural)

Program Design & Preparation- long design process: commenced 2008, fully contracted mid

2015- design has undergone substantial changes: simpler, more

focussed, clearer objectives- internal capacity to drive this process was critical- analysis, early activities are very useful preparations- contracts not overly prescriptive, things change after

implementation- start-up: usual problems, need an MC with excellent

operational and support systems

AIP-Rural Operational challenges

- DFAT approval processes can be laborious – may encounter resistance and scepticism

- Critical to have: - internal champions in DFAT executive, advisers- simple, high quality communications products - a strategy to engage DFAT managers - field visits are

worth the investment - build strong understanding within the DFAT team- support of a strong procurement team: need clarity

around procurement and partnership guidelines [ie grants, MOUs, sub-contracting)

AIP-Rural Operational challenges

Liaison with counterpart governments- critical to build understanding and commitment

early- relations between national and sub-national

governments can be different: find champions- develop an engagement strategy – field trips, study

tours, capacity building - need to be pragmatic and willing to compromise, but

be clear on where and how much

AIP-Rural Operational challenges

Quality and results reporting: • five ADRs are relevant • DFAT activity managers need to understand

assumptions, methodology for calculations • may be required to set benchmarks/projections • the more DFAT managers know about your

programs, the more they’ll trust your reporting• independent, high level strategic advice has been

very positive

AIP-Rural Operational challenges

Biggest challenge is scarcity of market development experience: – consultants – implementation team capacity– finding the right personnel

Challenge: Government Relations

• Aligned with policy not through government

• History and expectations• Decision making vs. consultation• Getting results and toughing it out• Involvement in activities and output based

payments

Challenge: Budget Management• Administration costs vs. activity costs

• Donor pressures/incentives• Flexibility > budget variability, usefulness

of replicable activities (e.g. infrastructure), shifting across line items

Activity Costs 80 70 60 50 40 30 20

Staff20 30 40 50 60 70 80Operations

Management Fee

Challenge: Results, Targets, Projections

• Demand – What are we buying?• Year-by-year vs. end-of-program results

(e.g. irrigation/agribusiness)• Projections vs. actual results• Intermediate indicators especially change at

provider level vs. change at farm level

Challenge: Control vs. Oversight

• Replacing upfront controls (e.g. designs, workplans, committees) with process oversight (e.g. review groups, system set up, DCED audits)

Challenge: Design

• Focus on principles, flexibility, staff and culture

• Less is better• But clarity on technical and operational

support from implementer• But cannot ‘manage by contract’