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NATIONAL PROGRAM FOR COMMUNITY EMPOWERMENT (PNPM MANDIRI) Indonesia’s CDD Response to Rural Poverty.

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Presentation on theme: "NATIONAL PROGRAM FOR COMMUNITY EMPOWERMENT (PNPM MANDIRI) Indonesia’s CDD Response to Rural Poverty."— Presentation transcript:

1 NATIONAL PROGRAM FOR COMMUNITY EMPOWERMENT (PNPM MANDIRI) Indonesia’s CDD Response to Rural Poverty

2 Indonesia

3 Background Modeled on 2 former government programs: Kecamatan Development Program (KDP/PPK) & Urban Poverty Planning (UPP/P2KP). Objectives To 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

4 Indonesia’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

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

6 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

7 Poverty Program ‘Clusters’ Cluster I: Social Safety and Protection. Programs: Rice for the Poor (Raskin), School Operations Support (BOS), Health Security for the Poor, Cash Transfers & other social programs (post-disaster). Cluster II: Community-based programs; now known as PNPM Mandiri. Cluster III: Strengthening small and micro enterprises: Kredit Usaha Rakyat (KUR), Pengembangan Usaha Agribisnis Perdesaan (PUAP), micro-finance services. Source:pnpm-mandiri website

8 Key Principles Decentralized Pro-poor Participatory Transparent and Accountable Sustainable “Simple” Open Menu (with allocations based on prioritization of proposals decided on by village representatives)

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10 From Village Proposals to Funding Decisions To agree on 3 proposals (2 from women ) to be brought to the inter-village forum To agree on 6 village reps (3 females), proposal writing team & candidate for UPK etc Village Meeting Village Proposals discussed and ranked Forum officers elected UPK staff (re)elected Inter-Village Prioritization Using standard templates, detailed (engineering ) designs and cost estimates prepared (villagers involved in the process, consulted) Designs & Budgets Final decision made on funding for subprojects Reps elected for Kabupaten Planning (Musrenbang) deliberations Inter-Village Funding Decisions

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12 Approx. Funding (in US$ million, approx.) PROGRAMLOANGRANT KDP I$273.2 KDP II$344.3$70.8 PNPM 2007$381.9 $121.7 PNPM 2008$226.1 PNPM 2009$300 PNPM 2010$785

13 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

14 3 stages: 40%- 40%-20% Work plan & progress based Replenishement UPK Expenditure & progress report Withdrawal request & financial statement

15 Facilitator Local (PL) Ops Staff MANAGEMENT STRUCTURE OF PNPM MANDIRI RURAL MoHA, DG-PMD Coord. Ministry of People’s Welfare Bappenas TKPK TK-PNPM Mandiri National Management Consultant Governor Bupati/ Mayor CAMAT Village Head TKPKD Propinsi TK-PNPM Prov. Provincial Oversight Consultant TKPKD Kab. TK-PNPM Kab. Kabupaten Facilitators Kecamatan Fasilitator Inter Village Meeting (MAD) Unit Pengelola Kegiatan (UPK) Village Impl Unit Community (Groups) Village Cadres Supervision/ Oversight Coordination Reporting Lines Supervision and Tech Assistance CENTRAL PROVINCE REGENCY/ MUNCIPAL KECAMATAN (Govt Admin Unit) VILLAGE Monitoring teams Village Meeting Project Management (Satker) Facilitation

16 Program Staffing of PNPM Rural National National Management Consultants – 75 specialists Regional Mgt Consultants Province Provincial Oversight Coordinators (32) Team of 10 specialists/province, on average Kabupaten 3 Kabupaten Facilitators (Social, Technical and Financial) Plus assistants and computer operators Kecamatan At least 2 Kecamatan Facilitators (Social and Technical) A Financial Mgt Unit (UPK) and Local Asst Facilitator(s) Village At least two Village Cadres (one of the two must be female) Elected Village Implementation Committee

17 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:

18 Impacts of PNPM Rural have 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.

19 Impacts of PNPM Rural (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)

20 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

21 Impact Participation 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 issues Rural PNPM construction costs are 30% – 56% less than alternative means (ie. construction by contractors)

22 Aceh The 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 billion) 3.KDP-BRR, to built infrastructure for community settlements in 72 sub-districts (IDR billion) For example:

23 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 Aceh The Using KDP/PNPM Rural As “vehicle” for Other Funds For example:

24 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: JanuaryFebruaryMarch June-OctNopDec Implementation of PNPM-BKPGPeriod 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 Aceh

25 Infrastructure Project: Bridge at Siwalubanua Village Pati-iron bridge Infrastructure Suspension Bridges

26 Subak Road, Tabanan, Bali Infrastructure Road in Central Java

27 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

28 First Loan Disbursement at Cikeusal SPP beneficiary shows her fish crackers, Parit Baru, Selakau, Sambas, Kalbar SAVING & LOANS New Polindes in MagetanSocialization in a kecamatan

29 Challenges/Issues Challenges/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

30 Recommendations PNPM 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.


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