NATIONAL PROGRAM FORNATIONAL PROGRAM FORCOMMUNITY EMPOWERMENT COMMUNITY EMPOWERMENT

(PNPM MANDIRI)(PNPM MANDIRI)Indonesia’s CDD Response to Rural Poverty

IndonesiaIndonesia

BackgroundBackgroundModeled on 2 former government programs: • Kecamatan Development Program (KDP/PPK) &• Urban Poverty Planning (UPP/P2KP).

ObjectivesObjectivesTo Reduce Poverty, by:• Providing cost-effective socio-economic

infrastructure and access to basic services• Improving local governance & capacity• Strengthening local institutions• Increasing local employment opportunities• Empowering communities

Indonesia’s populationIndonesia’s population

Source: CPS Change Team

The biggest poor population are living in Java-Bali (57%). 25% in the Western regions, and 17% in the Eastern regions (the most lagging regions). In total there are ~ 36 million poor population

Indonesia’s economyIndonesia’s economy

Source: CPS Change Team. Provincial’s size shows the proportion of provincial GDP relative to national GDP

CDD in Indonesia CDD in Indonesia Villagers plan and

decide on investments, control

funds, implement the projects

themselves, account for funds, and

maintain facilities/ infrastructure built.

With facilitation and technical backstopping

Poverty Program ‘Clusters’Poverty Program ‘Clusters’

Source:pnpm-mandiri website

Key PrinciplesKey Principles

• Decentralized • Pro-poor • Participatory • Transparent and Accountable • Sustainable • “Simple” • Open Menu (with allocations based on

prioritization of proposals decided on by village representatives)

From Village Proposals to Funding From Village Proposals to Funding DecisionsDecisions

Inter Village Mtg Dissemination

Village Meeting Socialization

FGD: Collection of

Ideas

Training for Village Cadres, Village

Committees

Special Women Meeting

Village Planning Meeting Village Proposals

2nd Inter Village Mtg Prioritized Proposals

Proposal Writing with/ without cost estimate & design

Proposal Verification

Village Meeting Report IVM

Results, discuss work plan

Village Accountability Meeting (2X min)

Village Meeting Completion Report,

Hand Over

Preparation for Sub-project

Implementation (procurement/

construction plan/ village training)

Supervision and Cross Village

Visit

Last Transfer of Village Funds & subproject

Completion

Certification of Completion, Training of O&M Team

Operation and Maintenance

Evaluation

Inter Village Mtg Final Funding

Decision

Block Grant Cycle - PNPM Rural

Final Proposal/ Design & Cost

Estimate

Transfer of Funds & Sub-project

Implementation

FIELD ORIENTATION AND ASSESSMENT

District Development

Forum

District Agencies

Forum

- Proposal Ranking - Link-up to District

Planning

Funding Options, Kecamatan

Representatives

Nomination of Village Cadres, Village

Committees

1

5

4

6

7

8

2

3

9

1000

Formation of Verification Team

Revolving Fund Management

Approx. Funding Approx. Funding (in US$ million, approx.)(in US$ million, approx.)

PROGRAM LOAN GRANTKDP I $273.2KDP II $344.3 $70.8PNPM 2007 $381.9

$121.7PNPM 2008 $226.1PNPM 2009 $300PNPM 2010 $785

• Transferred by KPPN (Govt Treasury Office) to village collective accounts at the kecamatan level.

• Villagers then use these grant funds for productive infrastructure, loans to existing women’s groups for working capital, or for social investments in education and health.

How Funds are Channeled and Disbursed

3 stages: 40%-40%-20%

Work plan & progress based

Replenishement

UPK

Expenditure & progress report

Withdrawal request & financial statement

Program Staffing of PNPM Rural Program Staffing of PNPM Rural

Results Results

• 65,500 km of roads• 9,000 bridges• 11,000 irrigations systems• 28,300 drinking water systems and almost

17,500 sanitation facilities (MCK)• 6,950 schools (and provided almost 120,000

scholarships to poor students)• 5,700 health posts

Between 1999 – 2007, villagers built or rehabilitated over:

Impacts of PNPM Rural Impacts of PNPM Rural have been positivehave been positive

• Household welfare • Increase in consumption per capita 5% greater

in PNPM locations compared with control.• The same impact is 5% impact among poorest

20% households.• Impact increases to 19% in the poorest 20% of

kecamatan.• Households moved out of poverty (2.3% more

likely than control areas) and reduction in risk of households falling into poverty.

Impacts of PNPM Rural Impacts of PNPM Rural (cont.)(cont.)

• Employment Generation• 1-2% greater chance of escaping unemployment.• Unemployment already very low (<4%).• Provides temporary jobs during slack season for

agricultural laborers and the poor (>72 million person-days for >6.1 million villagers)

• Physical Economic Infrastructure• Creates greater access to markets and services

(roads) and increases productivity (irrigation)• Improves access to and quality of health and

education services (health centers, schools)• Strong impact on expansion of access to health

services (5% more than control areas)

• Proven Track Record of Low Misuse of Funds (< 1%)

Impacts of PNPM Rural Impacts of PNPM Rural

ImpactImpactParticipation of women and poor is generally high

(about 45%)Poverty targeting is successful (Alatas, 2005)Rural PNPM forums reduce conflict (Barron)Rated beneficial--as expected or better: 92%Satisfied with results: 96%Infrastructure fully functional (years after

construction): 94%No serious environmental impact or safeguards issuesRural PNPM construction costs are 30% – 56% less

than alternative means (ie. construction by contractors)

AcehAcehThe Using KDP/PNPM Rural As “Vehicle” for Other Funds

1. KDP-IOM, IDR 50 million per village for 230 villages and 350 villages in conflict-affected areas in Aceh;

2. KDP-BRA, to channel funds to conflict victims in 67 sub-districts (IDR 217.38 billion)

3. KDP-BRR, to built infrastructure for community settlements in 72 sub-districts (IDR 116.274 billion)

For example:

4. CARE, to built sanitation in Peukan Bada Sub-district, Aceh Besar

5. AUSAid, development Meunasah & Village Halls in 108 villages in 8 sub-districts, Aceh Besar

6. Village Surveys, 2005/2006, surveyed more than 5,900 villages to identify damages and changes post-tsunami and -conflict

AcehAcehThe Using KDP/PNPM Rural As “vehicle” for Other Funds

For example:

PNPM-BKPG—integration of community development programs

In 2009 Aceh allocated > Rp. 962 billion for block grant investment funds to every village and linked its funds to PNPM Rural. Aceh’s BKPG also links musrenbang planning to more transparent & participatory BKPG + PNPM community planning, as shown below:

January February March20102009

June-Oct Nop Dec

Implementation of PNPM-BKPG Period of Musrenbang until Kec (March)

Each village produces a RPJM & RKG (annual work plan) and budget/APBG

Base d on its RPJM, each village reviews & prepares an RKG (annual work plan)

Musrenbang Kec and MAD II of BKPG + PNPM can be done together

AcehAceh

Infrastructure Project: Bridge at Siwalubanua Village

Pati-iron bridge

Infrastructure

Suspension Bridges

Subak Road, Tabanan, Bali

Infrastructure

Road in Central Java

TK (Kindergaten ) in Magetan

Exterior of a School (and KDP Notice Board) in Kairatu

SCHOOL

Clean Water Project at Pengotan, Kec. Bangli, Bali

Irrigation channel at Lamatewelu , Kec. Adonara Timur, Kab. Flores Timur, NTT

Women actively participating in building a road in Garut

First Loan Disbursement at Cikeusal

SPP beneficiary shows her fish crackers, Parit Baru, Selakau, Sambas, Kalbar

SAVING & LOANS

New Polindes in Magetan Socialization in a kecamatan

Challenges/IssuesChallenges/Issues• The delay of DIPAs every year (mutli-year budgeting, carry-over, PMK 168 rules, etc.)

• Technical Assistance (too little training, too late and too many empty TA positions)

• Better inter-sectoral support & coordination needed going forward

• Intensive routine supervision required • Better pro-poor targeting—more grant funds to poor, remote areas

RecommendationsRecommendationsPNPM can serve as an effective “vehicle” to build village infrastructure, provide employment opportunities, reduce poverty and help provide a safety net in times of crisis:

• The architecture and program machinery in place & process familiar (facilitators trained and in place)

• Poverty-targeted (larger block grants for poor kecamatan)

• The funds provided proven to result in cost-efficient village infrastructure & local employment opportunities, reducing poverty in poor areas.