Graduate School of Asia and Pacific Studies University of Waseda, Tokyo-JAPAN 2008

1. PUBLIC ADMINISTRATION: CONCEPTS AND
PRACTICE
X. NATIONAL COMMUNITY
EMPOWERMENT PROGRAM
(PNCE)
A CASE STUDY
Graduate School of Asia and Pacific Studies
University of Waseda, Tokyo-JAPAN
2008

2. CONTENTS
INDONESIA S
INDONESIA’S MAIN POVERTY ISSUES
GOALS: ALIGNMENT OF KEY GOVERNMENT PRIORITIES
WITH MDGs
COMMUNITY EMPOWERMENT
WHAT IS NPCE?
WHY NPCE?
HOW IT WORKS?
DURATION, COVERAGE AND BUDGETING
THE SOURCE OF FUNDING
THE IMPACT ON EMPLOYMENT AND POVERTY REDUCTION
GSAPS-2008 www.ginandjar.com 2

3. INDONESIA’S MAIN POVERTY
ISSUES
LARGE NUMBER OF POOR
MACRO STATISTICS (BASED ON SUSENAS, MARCH 2007): 37.17
MILLION PEOPLE LIVE UNDER POVERTY LINE (16.58% OUT OF
TOTAL POPULATION)
URBAN: 33.56 MILLION (12,52%).
RURAL: 23.61 MILLION (20,37%).
( , )
MICRO STATISTICS (BASED ON UCT SURVEY DATA, 2005): 19,1
MILLION HH, CONSIST OF 3,8 MILLION POOREST, 8,2 MILLION
POOR AND 6,9 MILLION NEAR POOR.
POOR, 69 POOR
LOW QUALITY OF HUMAN RESOURCES
HIGH NUMBER OF CHILDREN AT THE LOWEST QUINTILE ARE
Q
DROP-OUTS.
PARTICIPATION RATE AT JUNIOR HIGH SCHOOL OF THE
LOWEST QUINTILE IS ONLY 70%.
70%
GSAPS-2008 www.ginandjar.com 3

4. INDONESIA’S MAIN POVERTY ISSUES
INDONESIA S
MATERNAL MORTALITY, ESPECIALLY OF THE LOWEST
QUINTILE, IS HIGH.
HIGH INCIDENCE OF MALNUTRITION AND UNDER FIVE
MORTALITY.
THE SLUM AREAS IN URBAN AREAS COVERS OF
56,000 HECTARES IN 110 TOWNS,
42,000
42 000 VILLAGES GROM THE TOTAL NUMBER OF
VILLAGES IN INDONESIA OF 77,000 VILLAGES ARE
CATEGORIZED AS POOR VILLAGES.
VILLAGES
GSAPS-2008 www.ginandjar.com 4

5. GOALS: ALIGNMENT OF KEY
GOVERNMENT PRIORITIES WITH MDG
MDGs
INDICATORS/TARGET (%) 2002 2009 MDGs
ACTUAL TARGETS 2015
TARGETS
Poverty
Population below US$ 1 a day 7.2 10.3
Poverty head-count ratio 18.2 8.2 7.5
Health
Under 5 mortality rate (per 1,000 live births) 60 26 (,1 33
mortality)
Maternal mortality ratio (per 100,000 live births) 307 226 105
Education
Net enrollment rate in primary education 92.7 99.6 100
Gross and net enrollment rate at junior level 79.7 98
Literacy rate of 15-24 y.o 98.7 100
Water & Sanitation
f l h h
% of population that has access to improved
d 78 80
water
Rural Development
Agricultural sector growth 35
GSAPS-2008 www.ginandjar.com 5

6. COMMUNITY EMPOWERMENT
A BASE FOR NATION BUILDING
Building community capacity
as social capital
Providing economic capital Enhancing social
Through Community Block entrepreneurship at community
Grants/BLM level through
facilitators/community leaders
GSAPS-2008 www.ginandjar.com 6

7. COMMUNITY EMPOWERMENT AIMS AT CREATING
AND ENHANCING COMMUNITY CAPACITY TO
EFFECTIVELY OVERCOME VARIOUS
DEVELOPMENT PROBLEMS FACED BY THE
COMMUNITIES.
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8. POVERTY REDUCTION THROUGH COMMUNITY
EMPOWERMENT
RESPONSIVE GOVERNMENT/EMPOWERED
COMMUNITIES
Strengthening bottom-up planning and budgeting;
Improving local government representation and
responsiveness;
Improving social service delivery to the poor;
Pro-poor planning and budgeting
P l i d b d ti
Market linkages Social Protection
Non-bank and Women’s participation
’
microfinance Justice for the poor
SADI (smallholder dvpt) Helping marginal groups
Information technology Budget transparency
Renewable energy BLOCK GRANT Community trust funds
TRANSFER TO Sustainability
THE POOR
GSAPS-2008 www.ginandjar.com 8

9. COMMUNITY EMPOWERMENT MAIN ACTIVITIES
TRAIN THE COMMUNITIES IN IDENTIFICATION,
ANALYSIS AND DECISION MAKING PROCESS TO
TACKLE THEIR POVERTY PROBLEMS
CREATE/EXPAND SMALL SCALE INFRASTRUCTURES
AND COMMUNITY ECONOMIC PRODUCTIVITIES.
INCREASE COMMUNITY CAPABILITY AND SELF-HELP
TO ACHIEVE BETTER STANDARD OF LIVING
GSAPS-2008 www.ginandjar.com 9

10. EMPOWERMENT PROCESS
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11. WHAT IS NPCE?
NPCE IS A POVERTY REDUCTION POLICY FRAMEWORK FOR
VARIOUS PROGRAMS AIMED AT POVERTY REDUCTION
THROUGH COMMUNITY EMPOWERMENT.
NPCE CONSOLIDATES THE ENTIRE COMMUNITY
EMPOWERMENT-BASED POVERTY ALLEVIATION PROGRAM,
ACCELERATING POVERTY ALLEVIATION EFFORTS AND
INCREASING COMMUNITY'S EMPOWERMENT AND SELF
SUSTAINABILITY
COMMUNITY DRIVEN EMPOWERMENT PHASES:
EMPOWERMENT LEARNING PROCESS
EMPOWERED COMMUNITY
SELF-HELP COMMUNITY.
TRANSFORMING COMMUNITY RESOURCES INTO
SOCIAL/ECONOMIC CAPITAL
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12. NPCE IS IMPLEMENTED THROUGH HARMONIZATION
AND STABILITATION OF EMPOWERMENT POLICIES
AND PROGRAMS INVOLVING THE TARGETING OF
REGIONS AS WELL AS BENEFICIARIES, BASIC
PINCIPLES, STRATEGIES, APPROACHES, INDICATORS,
C S, S G S, O C S, C O S,
AND MECHANISMS.
GSAPS-2008 www.ginandjar.com 12

13. WHY NPCE?
THERE HAVE BEEN DIFFERENT KINDS OF POVERTY
ERADICATION ACTIVITIES WITHIN
MINISTRIES/INSTITUTIONS CREATING INEFFICIENCY
AND OVERLAPPING ACTIVITIES, MECHANISMS,
COMMUNITY S
COMMUNITY'S INSTITUTIONS NEED
HARMONIZATION.
IMPERFECT MARKET, ESPECIALLY IN MEETING
,
PEOPLE’S NEEDS IN REMOTE AND ISOLATED AREAS.
DIFFICULTIES TO REACH THE POOR.
GSAPS-2008 www.ginandjar.com 13

14. HOW IT WORKS?
PNCE-SECTORAL PROGRAMS
• CONSIST OF SECTORAL
EMPOWERMENT PROGRAMS
• COMPONENTS:
• SECTORAL BLOCK GRANTS
(RURAL ROADS, IRRIGATION,
ETC)
• EXTENSION SERVICES
PNCE-CORE PROGRAMS (IN 2008)
• CONSIST OF:
• KDP: RURAL-BASED COMMUNITY
EMPOWERMENT
• UPP: URBAN BASED COMMUNITY
URBAN-BASED
EMPOWERMENT
• RISE: FAST-GROWTH AREAS
COMMUNITY EMPOWERMENT
• COMPONENTS:
• COMMUNITY BLOCK GRANTS
• FACILITATION, TECHNICAL
ASSISTANCE, TRAINING, LOCAL
GOVERNMENT CAPACITY
GSAPS-2008 www.ginandjar.com 14

15. NPCE CONSOLIDATES 53 POVERTY REDUCTION PROGRAMS
IN 22 LINE MINISTRIES.
IT WILL BE A UNIFIED SYSTEM OF POVERTY REDUCTION
AND JOBS CREATION BASED IN COMMUNITY DRIVEN
DEVELOPMENT APPROACH, TO BE EFFECTIVE IN 2009.
2008 IS THE quot;TRANSITION PERIODquot; TO PREPARE PROGRAM
CONSOLIDATION AND UNIFICATION.
SUPPORTS FROM VARIOUS DONORS INSTITUTIONS IN
FORMS OF GRANTS WILL BE PUT IN THE PNCE SUPPORTS
FACILITY, UNDER THE RESPONSIBILITY OF GOVERNMENT
OF INDONESIA, MANAGED BY FUND MANAGERS THAT WILL
BE DETERMINED LATER.
GSAPS-2008 www.ginandjar.com 15

16. PROGRAM CONTAINS:
1. A UNIFIED SYSTEM AND MECHANISM
MECHANISM;
2. A UNIFIED PROGRAM DESIGN;
3. BETTER NATIONALTARGETING OF THE POOREST
POOREST;
4. DIRECT TRANSFER OF FUNDS; AND
5. INCREASED COMMUNITY BLOCK GRANTS.
GRANTS
GSAPS-2008 www.ginandjar.com 16

17. THESE PROGRAMS ARE IMPLEMENTED THROUGH FOUR
MAJOR FRAMEWORKS :
1.
1 STIMULATING THE QUALITY OF ECONOMIC GROWTH WITH
SPECIAL EMPHASIS ON THE DEVELOPMENT OF LABOR-
INTENSIVE INDUSTRIES, AS WELL AS THE DEVELOPMENT OF
MICRO, SMALL
MICRO SMALL, AND MEDIUM SCALE BUSINESS.
BUSINESS
2. IMPROVING THE POOR COMMUNITY’S ACCESS TO BASIC
SERVICES SUCH AS EDUCATION, HEALTHCARE, INCLUDING
FAMILY PLANNING FOOD AND NUTRITION AS WELL AS BASIC
PLANNING, NUTRITION,
INFRASTUCTURE.
3. SCALING–UP COMMUNITY BASED DEVELOPMENT PROGRAMS.
4.
4 IMPROVING THE SOCIAL SECURITY SYSTEM BY IMPROVING AID
AND SOCIAL SUPPORT SYSTEMS FOR POOR HOUSEHOLDS.
GSAPS-2008 www.ginandjar.com 17

18. THE MAIN CHARACTERISTICS
EACH COMMUNITY GROUP CONSISTS OF 10 TO 15 PERSONS.
LOCATION OF ACTIVITIES AT SUB-DISTRICT/VILLAGE LEVEL.
O G O SO
PRIORITY GIVEN TO ISOLATED/BACKWARD AREAS AND POOR
/ C S OO
COMMUNITIES.
ALIGNING BASIC PRINCIPLES, COMMUNITY-BASED DRIVEN
DEVELOPMENT STRATEGIES AND INDICATORS
INDICATORS.
SYNCHRONIZING PROCEDURES AND MECHANISMS (FINANCING,
DISBURSEMENT, TRAINING, PLANNING, COMPLAINT MECHANISM,
)
ETC).
STRENGTHEN THE COMMUNITY INSTITUTION AT THE SUB
DISTRICT AND VILLAGE LEVEL .
IMPROVE AND DEVELOP THE MANAGEMENT SKILL.
STRENGTHENING THE LOCAL GOVERNMENT ROLE IN THE
DEVELOPMENT COORDINATION AT THE DISTRICT AND
VILLAGE/SUB-DISTRICT LEVEL.
GSAPS-2008 www.ginandjar.com 18

19. THE CURRENT CONDITION
PROGRAM PROGRAM PROGRAM PROGRAM
PROGRAM
PROGRAM MANAGEMENT OVERNUMBER
MANAGEMENT STRUCTURE IN MEDIATORS
STRUCTURE
FIELD COORDINATION
?
MISDELIVERED
PROGRAM
??
FIELD COORDINATION
OVERLAPPING
WITH OTHER ??
PROGRAMS
?? ??
IGNORED
GSAPS-2008 www.ginandjar.com 19

20. UNDER NPCE Program
Program
Program
Program
Program
The aid is directly
y
delivered to the hand of
community so that they
could receive bigger and
integrated aid
All empowering supports
empo ering s pports
rest under and managed
by “participative
community body” which
is formed by public itself,
in each village
All
programs
run Similar
Norms/crite
ria,
standard,
standard
Process,
Community through Procedure
empowering groups conduct and
Data collection and Guidance
NPCE, supporter by Sectoral targeting on the p
g g poor
Empowering Packages (BLM (BLM, accurately
facilitator, training etc)
GSAPS-2008 www.ginandjar.com 20

21. PROGRAM CYCLE:
POLICY AND OPERATIONAL STRATEGY
PLANNING
ORGANIZATION IN MANAGING TEAM AND IN EACH COMMUNITY
BLUEPRINT/DESIGN ON NPCE
SYSTEM, MECHANISM, CRITERIA,
SYSTEM MECHANISM CRITERIA PROCESS AND PROCEDURE
GENERAL GUIDANCE AND OPERATIONAL TECHNICAL GUIDANCE
BUDGETING
PREPARATION AND TRAINING OF ASSOCIATE FACILITATORS
SOCIALIZATION (COMMUNICATION, INFORMATION AND EDUCATION)
IMPLEMENTATION
CONTROLLING
MONITORING AND EVALUATION
GSAPS-2008 www.ginandjar.com 21

22. DURATION, COVERAGE AND
BUDGETING
NPCE WILL BE CONTINUOUSLY CONDUCTED UNTIL 2015
~ IN LINE WITH INDONESIA'S MDGS.
COVERAGE:
2007 : 2.827 KECAMATAN OR MORE
2008 : 3.800 KECAMATAN OR MORE
2009 : 5.263 KECAMATAN
BLOCK GRANT ISSUED IN 2007 AMOUNTS TO RP. 750
MILLION UP TO RP. 1,5 BILLION PER KECAMATAN.
STARTING IN 2008, THE AMOUNT WILL BE INCREASED
,
TO RP 3 BILLION PER KECAMATAN
KECAMATAN IS THE SUB-DISTRIC UNIT OF LOCAL
GOVERNMENT, UNDER WHICH ARE VILLAGES
,
GSAPS-2008 www.ginandjar.com 22

23. THE SOURCE OF FUNDING
CENTRAL GOVERNMENT BUDGET
LOCAL GOVERNMENT CONTRIBUTIONS (BASED ON FISCAL
CAPACITY 20% FROM LOW-FISCAL CAPACITY REGIONS AND
50% AND ABOVE FOR MEDIUM TO HIGHER FISCAL CAPACITY
REGIONS)
PRIVATE/CSR CONTRIBUTIONS
FINANCING MECHANISM
MULTI DONOR TRUST FUND
UNEARMAKED BUDGET SUPPORT
quot;SOFT EARMARKINGquot;
CO-FINANCING,
CO FINANCING
MULTIYEARSFINANCING FOR COMMUNITY BLOCK GRANTS
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24. THE IMPACT ON EMPLOYMENT AND POVERTY
REDUCTION
IMPACT ON EMPLOYMENT: 24 MILLION EMPLOYED.
NPCE BENEFITS ARE INCREASINGLY THE RESULT OF
GREATER ECONOMIC ACTIVITY NOT OF EMPLOYMENT
PROVIDED DIRECTLY
DIRECTLY.
IMPACT ON THE POOR: 16 MILLION POOR BENEFITED.
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25. NPCE SHOULD PROVIDE 60 DAYS OF SUPPLEMENTAL
EMPLOYMENT TO ABOUT 24 MILLION IN 2009
THE BENEFITS WILL BE ESPECIALLY GREAT BECAUSE
THE INCOME AND EMPLOYMENT MADE AVAILABLE IN
THE SLOW SEASONS FOR AGRICULTURE,
CONSTRUCTION, ETC., WHEN MANY POOR PEOPLE ARE
DESPERATE TO SUPPLEMENT THEIR INCOME.
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26. EMPLOYMENT GENERATED BY PNPM
OF THE 24 MILLION BENEFICIARIES FEWER THAN
500,000 WILL BE SHOWN AS EMPLOYED UNDER THE
PROGRAM BECAUSE:
POOR PEOPLE CAN NOT AFFORD TO BE UNEMPLOYED THEY
UNEMPLOYED—THEY
MUST HAVE WORK TO EAT. MOST OF THE BENEFICIARIES OF THE
PROGRAM WILL BE UNDEREMPLOYED: DURING SOME MONTHS
THEY CAN GET WORK ONLY FOR 20-30 HOURS A WEEK.
20 30 WEEK
THE UNEMPLOYED, BY CONTRAST ARE MOSTLY EDUCATED
MIDDLE CLASS YOUNG PEOPLE WHO WILL NOT TAKE THE
LABORERS' JOBS THAT THE PROGRAM OFFERS.
OFFERS
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27. THE BIG BENEFITS ARE DUE TO THE GREATER
ECONOMIC ACTIVITY IT GENERATES, NOT PEOPLE IT
HIRES DIRECTLY
ABOUT 60 % OF THE BENEFITS ARE INDIRECT: INCREASED
ECONOMIC ACTIVITY
ACTIVITY.
INDIRECT BENEFITS ARE DUE TO:
THE INCOME quot;MULTIPLIERquot; - ADDITIONAL INCOME GENERATED IN
THE VILLAGE AS THOSE EMPLOYED BY THE PROGRAM SPEND THEIR
MONEY ON FOOD, OTHER GOODS AND SERVICES.
THE BIGGER IMPACT IS FROM INVESTMENT IN IMPROVED
INFRASTRUCTURE WHICH ALLOWS LOW COST SHIPMENT OF HIGHER-
HIGHER
PRICED COMMODITIES.
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28. SOURCES OF EMPLOYMENT BY NPCE
Direct benefits-
million employed by
NPCE program itself
Indirect benefits- due
to greater economic
activity
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29. THE RURAL PROJECTS WERE ESTIMATED TO GENERATE A
RATE OF RETURN, AN ANNUAL INCOME AS PERCENT OF
INVESTMENT COST, 50 % OF WHICH CONTINUES FOR
YEARS WITH MAINTENANCE.
IN ADDITION THERE ARE OTHER INDIRECT BENEFITS
THAT CAN NOT BE MEASURED IN TERMS OF JOBS
CREATED AND INCOME INCREASED:
IT HELPS TO KEEP WAGES FOR ALL, EVEN NON
ALL
PARTICIPANTS, FROM FALLING TO DISTRESS LEVELS IN THE
OFF-SEASON.
PNCE CAN SERVE AS A SOCIAL SAFETY NET OR SOCIAL
INSURANCE MECHANISM.
GSAPS-2008 www.ginandjar.com 29

30. OF THE 16 MILLION POOR WHO WILL BENEFIT:
6.5
6 5 MILLION WILL BE PULLED OUT OF POVERTY AND
9.5 MILLION WILL GET INCREASED INCOME OF 10-
14%,
14% ALTHOUGH MAY NOT ENOUGH TO FULLY
ESCAPE POVERTY.
SOME 16 MILLION OF THE POOR, 35-45% OF ALL
,
POOR, WILL BENEFITS BY 2009
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31. HOWEVER, HOW MANY POOR THERE ARE ALSO
DEPENDS AS MUCH OR MORE ON:
ON
THE PRICE OF RICE AND OTHER BASIC FOODS;
THE NUMBER OF JOBS CREATED BY THE RATE OF
GROWTH AND HOW LABOR INTENSIVE IT IS;
THE EFFECTIVENESS OF THE CONDITIONAL CASH
TRANSFER PROGRAM
GSAPS-2008 www.ginandjar.com 31

32. OTHER BENEFITS
IT CAN DEVELOP LOCAL/VILLAGE INFRASTRUCTURE AT
A COST 40 % BELOW THAT OF GOVERNMENT
PROJECTS. SO IT IS NOT ONLY EFFECTIVE IN
REDUCING POVERTY AND INCREASING EMPLOYMENT
IT IS ALSO EFFICIENT IN DEVELOPING LOCAL
INFRASTRUCTURE.
GSAPS-2008 www.ginandjar.com 32

33. SOME OF THE FUNDS FOR SOCIAL INSURANCES AND
SOCIAL SAFETY NET PURPOSES CHOULD ALSO BE
INTEGRATED TO NPCE TO PROVIDE MORE EFFICIENT
SERVICES.
NPCE INCREASES INDONESIAN NATIONAL INCOME
ROUGHLY:
RP 17 TRILLION [$ 2 BILLION] IN 2009 AND
RP 26 TRILLION IN 2010 [ALMOST $ 3 BILLION] AS A RESULT OF
INDIRECT EFFECTS IN STIMULATING THE ECONOMY
ECONOMY.
RP 3-5 TRILLION OR SO WOULD GO TO GOVERNMENT IN
INCREASED CONSUMPTION AND OTHER TAXES, WHICH
COULD BE USED TO FUND THE PROGRAM IN FUTURE
YEARS.
GSAPS-2008 www.ginandjar.com 33