Toward Mainstreaming and Sustaining Community-Driven Development in Indonesia

Understanding Local Initiatives and the Transition from the National Rural Community Empowerment Program to the Village Law

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• Publisher: Asian Development Bank
• Year: 2016
• Print ISBN: 9789292573164
• eBook ISBN: 9789292573171
• Topic: Politics & International Relations
• Subtopic: Cultural Policy
• Index: Politics & International Relations

Indonesia has adopted community-driven development as a major strategy for poverty reduction, and replicated the approach nationwide through a number of programs. Over the past few years, the country has formulated a road map for sustaining the systems, procedures, and benefits of community-driven development. Through case studies, the study examines the ongoing transition from the government's long-standing National Community Empowerment Program to mainstreaming through the government's regular planning and budget allocation system through the Village Law, which was enacted in early 2014. The study summarizes important lessons learned and policy implications from the first year of Village Law implementation.

III. Community-Driven Development in Indonesia: History and Current Trends

This chapter briefly summarizes the history of community-driven development in Indonesia, as well as current trends in its operationalization. From a historical perspective, the discussion highlights the major factors underlying Indonesia’s widespread adoption of community-driven development. These include funded by the World Bank Kecamatan Development Program and Urban Poverty Program, the Community Facilitators Development Project, the role of local government in operationalizing community-driven development, and the road map for operationalizing community-driven development formulated under the rural subprogram of the National Community Empowerment Program (Program Nasional Pemberdayaan Masyarakat Mandiri [PNPM-Rural]).

From a forward-looking perspective, the chapter focuses on operationalization of community-driven development under the Village Law, the major objective of which is institutionalizing community-driven development as Indonesia’s national strategy for reduction of poverty and acceleration of economic development.

In short, the major focus of the study is the ongoing transition from operationalization of community-driven development under the National Community Empowerment Program (PNPM-Rural), to its operationalization under implementation of the Village Law, which was enacted in 2014 shortly after the new government assumed power. The study thus primarily addresses operationalization of community-driven development under a transition from a programmatic basis to a legal basis. The field research for the study was conducted during this transition.

A. History of Community-Driven Development in Indonesia

Operationalization of community-driven development in Indonesia began with the Kecamatan Development Program, which was implemented in three phases over the period 1997–2007. As the program’s overall objective was poverty reduction through community empowerment, the program provided block grant funding directly to beneficiary communities. Community residents thus directly managed the funds provided, and decided their own development priorities. On the basis of these priorities, beneficiaries planned, implemented, and managed small-scale projects. The bulk of these projects related to establishing or upgrading of small-scale infrastructure that served the beneficiary community itself.

Community empowerment and technical facilitators funded under the program assisted beneficiaries in selecting, planning, and implementing the projects undertaken, and provided training in these tasks. As the rationale underlying the Kecamatan Development Program was community self-management, the program placed heavy emphasis on accountability, beneficiary participation, capacity building, cooperation, and transparency. Ensuring the participation of women throughout project planning and implementation ensured that female beneficiaries would benefit from the entire project implementation process.

Building on the significant success of the Kecamatan Development Program that primarily targeted rural areas, in 1999 the government launched the Urban Poverty Program, also funded by the World Bank, which was a parallel program focusing on urban areas. As implementation of the Kecamatan Development Program was to be completed in 2007, on April 30 of that same year, the government launched its Program Nasional Pemberdayaan Masyarakat Mandiri (PNPM-Mandiri, or National Program for Community Empowerment), which ultimately became its national strategy for poverty reduction. As of 2015, this is at the largest community-driven development program in the world.

B. The National Program for Community Empowerment (PNPM-Mandiri)

A national poverty reduction program, PNPM-Mandiri is fundamental to community empowerment in Indonesia, as its long-term goal is achievement of the targets the government has set for itself in meeting the Millennium Development Goals prior to 2015. The program’s coverage thus expanded so rapidly that by 2013, the rural subprogram under PNPM-Mandiri—which is often referred to as PNPM-Rural—had reached all of Indonesia’s 413 districts and 6,982 subdistricts, and thus nearly all of the country’s 75,000 villages.

The major objectives of PNPM-Mandiri are inextricably intertwined with poverty reduction, as the latter is the government’s flagship program for meeting the Millennium Development Goal targets it has set for itself. PNPM-Mandiri thus places heavy emphasis on upgrading the capacity of beneficiaries in improving living standards and creating employment opportunities at both the collective and individual level as a means of reducing poverty. More specifically, the program’s objectives include the following.

(i) Increasing the level of participation of all community members in the development process. This particularly includes the poor, women, indigenous peoples, and other community members that to date have not fully benefitted from economic development initiatives.

(ii) Improving the capacity of local community institutions by making them more representative and accountable than previously.

(iii) Improving the capacity of local government agencies to provide public services to poor residents by making policies, programs, and budgets pro-poor.

(iv) Increasing the effectiveness of poverty reduction initiatives by creating or expanding synergy between the beneficiary community concerned, local government agencies, and other stakeholders in the development process. The latter includes nongovernment organizations, as well as other entities with an orientation to economic development such as associations, university groups, and the media.

(v) Improving the capacity of beneficiary communities, local government agencies, and other stakeholders to reduce poverty at the local level.

(vi) Expanding the use of information dissemination and communication technology in promoting economic development at the community level.

PNPM-Mandiri includes two major components: PNPM-Core (PNPM-Inti) and PNPM-Strengthening (PNPM-Penguatan), the latter being briefly discussed further below. PNPM-Core includes two major PNPM-Mandiri community-driven development subprograms: (i) the rural subprogram, which is referred to as “PNPM-Rural”, and (ii) the urban subprogram, which is referred to as “PNPM-Urban”

Each subdistrict is assigned to either PNPM-Rural or to PNPM-Urban, the rationale underlying this division being that of avoiding duplication of effort and waste of resources. Each of these subprograms thus operates solely within the particular set of subdistricts to which it has been assigned. These subdistrict assignments are decided at discussions that include officials from Indonesia’s National Planning Agency (Badan Perencanaan Pembangunan Nasional [or BAPPENAS]) and all other ministries concerned with poverty reduction.

Because PNPM-Rural and PNPM-Urban work in geographically separate sets of subdistricts, the two programs are implemented by two separate ministries. The implementing agency for PNPM-Rural is the Ministry of Home Affairs, while the implementing agency for PNPM-Urban is the Ministry of Public Works.

For its part, PNPM-Strengthening (PNPM-Penguatan) addresses village development requirements that for one reason or another remain unmet by PNPM-Rural or PNPM-Urban. Box 1 briefly outlines PNPM-Strengthening’s 16 programs, each of which addresses development requirements in a particular sector such as agriculture, education, fisheries, and health.

Box 1: PNPM-Strengthening’s 16 Programs

1. PNPM RIS: addresses Indonesia’s infrastructural development requirements

2. PNPM RISE/PISEW: improves access to basic infrastructure and microcredit by the poor, strengthens the capacity of district and kecamatan administrations in decentralizing government functions

3. PNPM Green: introduces natural resource and environmental management practices into PNPM programs.

4. PNPM RESPEK: is a community-driven development program implemented in rural areas of Papua province

5. PNPM Mandiri BKPG: is a community-driven development program implemented in urban areas of Aceh province

6. PNPM Integration/P2SPP: pilots integration of the PNPM model into district government development planning processes.

7. PNPM Generasi: increases the uptake of health and education services by local community residents.

8. PNPM Peduli: strengthens the capacity of Indonesian civil society organizations to improve the socioeconomic condition of marginalized groups

9. Creative Communities 2: expands public participation in the PNPM-Mandiri program through use of creative expression and community-based cultural activities.

10. PNPM Mandiri Sanimas: is an urban-based water and sanitation program

11. PNPM Mandiri Pamsimas: is a water and sanitation program that operates in rural areas

12. PNPM Mandiri Disaster Management: supports community-level disaster management programs in West Sumatra (Mentawai), Central Java, and DI Yogyakarta.

13. PNPM Mandiri Rural Agribusiness Development: provides block grants to farmers’ groups for funding agriculture-based projects

14. PNPM Mandiri Marine and Fisheries: expands employment opportunities for the poor who work in the fisheries sector

15. PNPM Mandiri Tourism: assists poor communities that live adjacent to tourist areas

16. PNPM Mandiri Housing and Settlement: improves the quality of housing and settlements through community empowerment.

Note: The Financial Assistance for Village Development (BKPG) is often referred to as Healthy and Smart Generation.

BKPG = Bantuan Keuangan Peumakmoe Gampong (Financial Assistance for Village Development); P2SPP = Program Pembangunan Sistem Perencanaan Partisipatif (Participatory Planning System Development Program); Pamsimas = Penyediaan Air Minum dan Sanitasi Berbasis Masyarakat (Community-based Water Supply and Sanitation); PISEW = Pengembangan Infrastruktur Sosial Ekonomi Wilayah (Regional Infrastructure for Social and Economic Development); RESPEK = Rencana Strategis Pembangunan Kampung (Strategic Plans for Village Development); RIS = Rural Infrastructure Support; Sanimas = Sanitasi Berbasis Masyarakat (Community-based Sanitation).

Sources: Pokja Pengendali PNPM. 2012; PSF. 2014; TNP2K. 2015.

As the focus of the field research under the study on which this report is based was community-driven development in rural areas (i.e., villages), the study’s focus as it pertains to PNPM-Mandiri was on PNPM-Rural rather than PNPM-Urban. However, as mentioned above, from a broader perspective, the study’s overall analytical context was operationalization of community-driven development in Indonesia during the transition from community-driven development’s programmatic basis (i.e., PNPM-Rural) to its legal basis (i.e., the Village Law).

The key features of PNPM-Rural are summarized immediately below.

(i) Women, poor residents, and representatives of remote hamlets participate in the discussions that identify local development priorities on which community-level projects are based. Women are allocated half the seats on the committees convened for this purpose at the subdistrict level. Half of all project proposals submitted by each village must be put forward by women’s groups.

(ii) The program relies on existing institutions, on the assumption that accumulated trust and reciprocity encourages transparent and accountable use of program funds.⁵

(iii) Other than a limited negative list, the menu of projects that can be funded by the program is entirely open. This ensures that the projects funded fulfill development requirements identified by the beneficiaries themselves.⁶

(iv) Competition for project funding at the subdistrict level ensures that decisions regarding the project proposals to be funded are the result of collective decision-making at the intervillage level. This encourages transparency, increases efficiency, and reduces opportunities for elite capture.

(v) The funds to be used for implementing projects are provided as block grants that are transferred directly to the subdistrict level. This ensures that all grant funds are received at the subdistrict level in their entirety, and that funding of projects occurs on a timely basis.

(vi) Multiple checks on the use of funds ensure that project implementation processes are transparent. For example, multiple signatures are required for withdrawals of project funds⁷, activity on project fund accounts is announced at public meetings, the purposes for which project funds are dispersed are posted publicly, and the results of fund dispersals are shared at public meetings.

(vii) The program provides for facilitation and technical assistance throughout the various stages of preparation of project proposals and project implementation. This includes support to decision-making and project implementation provided by subdistrict facilitators.⁸ District-level technical facilitators provide technical assistance and oversight of project proposals selected for funding.

(viii) Separating responsibilities as a means of avoiding conflicts of interest; ensuring that sanctions are imposed in cases in which funds are misused; and using open meetings as the venues for selection of projects and decisions regarding use of the funds, all ensure accountability of a type that gains the trust of beneficiaries (TNP2K 2015).

Because it is a national program, national, provincial, and district levels of government are all involved in implementation of PNPM-Rural. At the national level, the program is managed by the Directorate General of Village Community Empowerment⁹ of th...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Tables, Figures, and Boxes
• Abbreviations
• Acknowledgments
• Executive Summary
• I. Introduction
• II. Background of the Study
• III. Community-Driven Development in Indonesia: History and Current Trends
• IV. Best Practices under the PNPM-Rural Program and Lessons Learned from Its Implementation
• V. Toward Implementation of the Village Law
• VI. Implications for Policy and Practice
• Appendixes
• References
• Back Cover