Muntigunung Development Program

March 2009

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Table of Contents

1. The Situation Muntigunung

2. The Project Partners Functions Governance

2.1. Verein Zukunft für Kinder, Zurich

2.2. Yayasan masa depan untuk Anak Anak, Ubud

2.3. Yayasan Dian Desa, Yogjakarta

2.4. Controlling Corporate Governance

3. The Guiding Principles

4. The Development Program Strategy

5. The Development Program

Objectives - Projects - Results

5.1. The Water Supply Project

5.2. The Livelihood Activities

5.2.1. The Drip Trickle Irrigation Project

5.2.2. The Cashewnut Processing Project

5.2.3. The Wild Hibiscus (Rosella) Processing Project

5.2.4. The Palm Sugar Processing Project

5.2.5. The Jatropha Plantation Project

5.2.6. The Hat and Basket Production Project

5.2.7. The Eco Trekking Project

5.3. The Development Center

6. The next Steps

7. Involvement of Government and Business Community

8. Yearly Budget - Funding of the Projects

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1. The Muntigunung -Situation

Muntigunung, Karangasem is the driest area in Bali, situated between Tulamben and Tejakula, in the north east of the island and on the slopes of the mountains leading to Lake Batur. The rugged and mountainous area is covering around 28 km2 in an altitude between 200 and 900 meters over sea level. A population of around 5 500 people is living in 35 villages in poor conditions. No rivers, no springs, poor and dry soil and draught most of the year (8 months) are preventing a sustainable development. The people have no access to water, no access to health services, no income, no education and no information, this means that they are outside the development mainstream. Begging is the main source of survival. Average income of the people is around USD 10 per month. Most of the begging women of Bali are coming from this area. The area is considered as the poverty house of Bali.

Island of Bali and the area of Muntigunung in the north east part

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According to the inhabitants, the settlements in Muntigunung are already existing for a long time, even though there are no historical records available. People are belonging to the lowest caste of the Hindu Religion and are believed to have settled up there by force rather than by free will. The government made several attempts in the past to migrate the people to other islands, but all these attempts failed, mainly because the other options were even worse. Some of these migration projects even tried to replace the Muntigunung people into another religious surrounding (muslim dominated islands) and were not taking into consideration that the Hindus are being enormously bound to their ground, as they believe that the souls of their ancestors are coming back yearly to visit their villages.

We are convinced that a solution to the above mentioned problems can only be found in Muntigunung.

2. The Project Partners Functions - Governance

2.1. Verein Zukunft für Kinder, Zurich

Verein Zukunft für Kinder, a Swiss/Zurich based Non Profit Organisation with the aim to improve the living conditions of the poor people in South East Asia (with a focus on Muntigunung, Bali), was formed December 2004 by Daniel Elber, Fritz Lienhard and Ruth Moser. Verein Zukunft für Kinder is registered in Zurich, has a tax exemption status and is certified by the ZEWO organisation since October 2008, confirming its ethical way to conduct business and to transparently inform the donors about its activities. The Board consists of 8 members: Fritz Lienhard, President, Daniel Elber, Vice President, Robert Schenker, Daniela Ludiwig, Ruth Moser, Karin Vogt, Regula Bachofner and Thomas Albrecht.

Its function is to raise funds in Switzerland, to decide the strategy and the activities based on proposals from Bali, to fund the projects and to assure transparent information to the donors, members and the public. Verein Zukunft für Kinder has in the meantime established an Advisory

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Board (Patronatskomitee), with well known Representatives of the Business Community, such as Bernhard Aeschbacher, former Bank

Executive, Michael Auer, Member of the Executive Board of Raiffeisen Bank, Cilgia Graf Bezzola, Company Owner, Christian Hubacek, Company Owner from Vienna, Charles Huber, former Company Owner, Robert Lombardini, President of the Board of Axpo Holding, Rene Stammbach, President of Swiss Tennis Association, Christian Steinmann, Lawyer and former President of the Beat Richner Foundation, Markus Walliser, Company Owner, Kaspar Wenger, CEO of Holcim Switzerland, Markus Weiss, former CEO of Bank Ehinger in Basel..

Verein Zukunft für Kinder today has 185 members. It is the objective of the foundation to keep cost for fundraising and administration very low, so to assure that the donated funds are going directly into the projects. We still do not have fundraising costs at all. The administrative costs 2008 amount to 1.36% of the total incoming donations.

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Foundation organization

Yayasan MduAAProject Evaluation

Local ContactsControlling

Yayasan MduAAProject Evaluation

Local ContactsControlling

Yayasan Dian DesaProject Management

Yayasan Dian DesaProject Management

Structure

Verein ZfKStrategy

Funding decisionsFundraising

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2.2. Yayasan Masa depan untuk Anak Anak, Ubud, Bali

In Bali, a foundation with the above name (equal to Verein Zukunft für Kinder in Indonesian language) was formed in 2005 in order to evaluate and propose projects to Verein Zukunft für Kinder and to supervise and control the project execution. Founding members of the above Balinese Foundation are Jon Zürcher, Honorary Consul of Switzerland and Austria in Bali and former President of the Rotary Club Nusa Dua and Asri Kerthyasa, President of Rotary Club Ubud Sunset. The President of the Balinese Foundation is Anak Agung Bagus Gede Soerio Mataram, a well respected business man from Ubud.

The Balinese foundation has no commercial activities. No funds are chanelled through this foundation.

2.3. Yayasan Dian Desa, Yogjakarta

Verein Zukunft für Kinder employes Yayasan Dian Desa, the most well reputed NPO in Indonesia to act as program manager in Muntigunung and to plan and execute the projects. Yayasan Dian Desa has more than 35 years of experience in the development field and is a professional partner of many governments world wide. Their CEO, Anton Soediarwo, received the social entreprenneur award Indonesia 2008 by the reputed Karl Schwab Foundation and Ernest & Young.

2.4. Controlling - Corporate Governance Daniel Elber, the project coordinator is retired and lives in Bali. Georges

Capt, a retired Country Director of DEZA (Swiss Development Agency) with more than 35 years of experience in the development field acts as an independent coach and supervisor of Daniel Elber in Bali. He secures a high quality review of the budgeting, contracting and controlling process of the projects. The accounting is audited yearly.

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The Annual Report 2008 of Verein Zukunft für Kinder (Jahresbericht 2008-in German language only) outlines detailed information about the balance sheet, the profit and loss account, the use of the funds and the confirmation of the auditors.

3. The Guiding Principles

It is our aim to understand the roots and complexity of the problems in depth.

Our projects are the projects of the people. Voluntary participation, help to help themselves are core principles.

Overall project management is done by professional local organisations with an impeccable reputation.

Government and local authorities are involved in the projects.

Our commitment is long term. Nevertheless, it is our intention to transfer the projects and commercial activities as soon as possible to local people.

Fundraising is being concentrated on Switzerland.

The local Business Community has to be involved into the process as they are needed to create sustainability.

Controlling and review of the planning, budgeting and financial reporting activities is done locally by an independent development specialist.

Transparent information to all stakeholders is fundamental.

4. The Development Program Strategy

Based on two studies (Water Supply Options 2005 and Livelihood Assessment 2006) conducted by Yayasan Dian Desa as well as based on discussions held at different village meetings with representatives of all the 35 villages we learnt, that lack of water is the most important and urgent problem the villages are facing. As long as each family (mostly women and children) has to spend 3 to 5 hours daily to fetch water at the coast, no productive activity can be taken into consideration. Besides lack of water, there is an urgent need to improve the

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economic conditions of the inhabitants as they are forced to go begging regularely to the big cities. In order to improve the options for the future generation, an adequate education is the key.

A sustainable Water Supply was identified as the first strategic priority. Followed by a capacity building process with the implementation of income generating activities, which will later allow the population to create a sufficient nutrition for the children and will be the basis for the third priority, the education of all children in Muntigunung.

5. The Development Program Objectives Projects Results

5.1. The Water Supply Project

In order to find a sustainable solution for the water supply of these 35 villages a study of the situation of Muntigunung was conducted in 2005 showing that the area does not have any springs and rivers at all and that even in the rainy season (3-4 month yearly) the rain water level is way below average in Indonesia. Ground water is only reachable at the coastal area, digging wells was therefore no solution as well. It would have been a possibility to pump water over the mountains from Lake Batur or from the coast up to the highest point of Muntigunung, but it would have needed around 45 km of pipeline and around 90 litres of diesel per hour to pump water up from the coast. This solution would not have been sustainable at all. It was therefore decided, together with the population, that our sustainable solution will base on rainwater harvesting, a solution already used since generations.

The objective of the water supply project is to create a water supply of around 25 litres per water per head per day all year round. This quantity covers the basic need for drinking, cooking and washing.

Our solution consists of the following four components:

a) Renovation of the existing family kubangs (water tanks) by coating

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the inner side (improving the water tightness and preventing leeks), covering the tanks (preventing water from devapourisation and keeping it clean) and renovating the gutter system (improving the inflow of water during rainy season). b) Construction of 1 or 2 communal reservoirs per village (containing each up to 270 m3)

c) Construction of big rain water harvesting roofs with an additional strategic purpose as they should serve in future as meeting- production place or as schoolhouse.

d) Education of the population in the water purification method SODIS, thus improving the health of the people.

Cangkeng Asah Barat

Asah Timur Tijeng Tali

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A first pilot project in 2006 proved that our strategy moves into the right direction. The people of the village Tijeng Tali took part in the project by cleaning their village first and by executing all the digging work. The pilot project was considered successful.

In the meantime 6 more villages with more than 1 100 people are having a sustainable water supply according to the above concept.

This means that in these villages, women and children have much more productive time to improve their living conditions (2nd priority of our strategy). The water supply of the remaining 28 villages will follow within the next 7 to 8 years, depending on availability of the nececary funds.

5.2. The Livelihood Activities

In order to improve the livelihood of the people in Muntigunung we do focus on

Creating additional value by improving already existing products or activities

Creating new value by implementing new activities or products which are not known

Creating value by using/improving underutilized land

All the activities have to be simple, taking into consideration the development status of the people (malnutrition, lack of education). It is our aim to use the big water catchment roofs as production places in order to create a visible sign of change and to bring the people of the villages together in order to create a basis for a social development. As the villagers are not yet in a position to take risks at all (no capital)

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and as they are not yet capable of creating a market for their products and promoting them, the two foundations Dian Desa and Yayasan masa depan untuk Anak Anak are taking over this function for the time being. It is our intention to transfer the businesses to young Balinese people, as soon as we reach a status of profitability and therefore sustainability. In the following chapters, the different activities/projects and their impact is being explained.

5.2.1. Drip Trickle Irrigation Project With water supply assured, the people have at least 25 litres of water per head per day at their disposal. Enough to cover their basic need for drinking, cooking and washing. With the Drip Trickle Irrigation Project we teach the people how to save waste water and to start irrigating small gardens in order to improve the nutrition of their families and or to produce high yield products during the dry season.

Drip Trickle Irrigation in Cangkeng

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So far 35 systems of drip trickle irrigation have been installed in all the different villages of Muntigunung.

We were successful in producing cucumbers, chilli and beans and were therefore in a position to prove that the system is working. It needs a lot of work and persistence from the farmers in order to create success. And it needs a lot of coaching and teaching from our side to guarantee a high rate of success. Implementing these systems is only realistic in villages, where the water supply has been assured.

It is our objective to increase the number of families with a drip trickle irrigation system to 70 during 2009. This will improve the visibility of this activity and will attract more users.

5.2.2. The Cashew Nut Processing Project

Based on our strategy to increase value by improving the products or activities they already have or do, we focus on cashew nuts. In Muntigunung, there are a lot of older cashew nut trees, producing a harvest of 40 tons of raw nuts yearly. So far, the people sold the raw material to intermediary dealers who in turn made the profit. It is our intention to buy the raw material from the farmers as a first step. As a second step we employ a number of people, teaching them how to dry, crack, peal and pack the nuts. The promotion and selling process is being made by Dian Desa and our foundation as the local people are not yet in a position to execute this task. A first pilot project in January 2008 proved to be successful.

During 2008 we purchased 10 tons of raw material and produced around 2 tons of white kernels (final product).

The newly installed solar dryer helps us to improve the quality of the end product considerably. The quality is rated favourably by the high end customers, the 4 and 5 star hotels of the Bali Hotel Association.

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Cashew Processing in Cangkeng

Old Drying Technique New Solar Dryer

30 people were employed for 3 months to reach this result.

Within 5 months and with the support of a volunteer from Switzerland we were in a position to generate orders for the whole production.

For 2009 we plan to double the production to 5 tons and to concentrate the production in 2 to 3 villages to improve the efficiency of the training and the process quality. This will mean that we will be in a position to employ around 60 people for 3 months.

In order to achieve such a result, the selling process and the selling resources have to be increased.

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5.2.3. The Wild Hibiscus (Rosella) Processing Project

The wild hibiscus (Rosella Sabdariffa) was not known to Muntigunung. Tests in 2008 showed that the flower is growing well during the rainy season and that there is a big potential to create a sustainable business. For the Balinese hotel industry rosella products are nearly unknown. Rosella can be used as vegetable, it can be dried and sold as tea, it can be used in sirop as a nice drink addition, or produced in form of marmalade.

In December 2008 we distributed 4.5 million semen to the population in all the 35 villages. Production starts in May/June 2009.

The production process still has to be defined but it is our intention (as with the cashewnut process) to buy the harvest from the farmers and to employ as many as possible to start with the production processes of the different products. The Bali hotel industry already signalled their interest for these new products. It will be up to us to start promoting them as soon as possible.

First Tests with the Wild Hibiscus (Rosella Sabdariffa)

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First results April 2008

5.2.4. The Palm Sugar Processing Project

In the Muntigunung area, a total of 182 farmers are producing palm sugar and tuak (local alcohol). They are harvesting the liquid by tapping the 4 to 5000 Lontar Palm Trees at the top and fermenting or cooking the palm water thereafter in simple earth stoves. Tuak is used for own consumption whereas palm sugar is being sold locally in form of briquettes at a very low price.

It is our aim to improve the value of the sugar product by changing the product form into palm sugar powder, a product with a much higher market value and a big demand.

A first training with 23 participants has taken place. It is our objective 2009 to train as many farmers as possible, buy their products and to employ them to start producing palm sugar powder.

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5.2.5. The Jatropha Plantation Project

A big part of the land in Muntigunung is arid and it is nearly impossible to plant trees. One local tree, the Jatropha, is growing in Muntigunung. This tree is growing well in arid aereas, is preventing the soil from erosion, is creating humus and is producing a kind of fruit which can be pressed to oil and be used in a second step for producing soap or bio diesel. In such a project, big additional benefits can be achieved by producing power through gazifying the remains and by applying CO2 carbon credits for the reforestation of the surrounding. The project only becomes economically feasible when there are around 250 000 trees growing which are producing around 1 million kilos of fruit yearly. The trees have a life time of around 50 years.

In a first step, we produced 10 000 small trees which were planted in December 2007. The result of their growth showed us, that most of the trees survived the first year. We therefore planted another 100 000 of Jatropha trees between December 2008 and March 2009.

It is our intention to plant 150 000 trees by the end of this year, to start buying the fruit from the farmers testing a production line.

Growing young Jatrophas Start planting

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Planting Result after 1 year

Jatropha Fruit Kernels

5.2.6. The Hat and Basket Production Project

The leaves of the locally available lontar palm are usually used to form small baskets for religious offerings. As the island of Bali has a lot of sunshine and as we are bringing a substantial number of tourists into this area through the trekking activity,starting a sun hat production seems to be obvious. During the first three months of 2009, all the families of the small village Cangkeng were asked to delegate one member for a capacity building process to produce hats. The foundation provided the necessary material and the teachers.

Within days representatives of all families (21 women, 1 men) started to produce hats in different colours and sizes. It was the first time, that these women had a job. Rise in self confidence and joy as well as a salary to feed their families will be the result of this

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activity. It will be our task to start promoting these products in order to create a sustainable income basis for the village.

Hat Production in the village Cangkeng

The final product

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5.2.7. The Eco Trekking Project

When we started with developing Muntigunung, most of the people in Bali were of the opinion that the Beggars from Muntigunung were transported to the tourist towns by a village mafia who then in turn took the money from them. We realised later, that the women were walking over the mountains to avoid getting caught by the police and because they do not have enough funds to pay for transports. This is why we decided to create another attractive job opportunity: To walk over the mountains, but this time starting to guide tourists to the mountain area.

Since starting this Eco Trekking Project more than 200 highly satisfied guests joined us on the most spectacular trekking route in Bali, guided by the begging people of Muntigunung. With this activity we produced already more than 400 monthly income.

The number of tourists is steadily increasing, articles in Swiss newspapers and the intention of Swiss Television to do a production will be a further boost to this part of our poverty alleviation program. It will be our objective to increase the number of visiting guests steadily and to develop and offer new trekking challenges and other educational programs.

View from the top to Lake Batur

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Impressions from the Trekking

5.3. The Development Center

In order to assure efficient production processes and to create a logistical basis for our activities in Muntigunung we decided to construct a development center. The center and the big test- and demonstration plot will be used for product development, testing dry land plants, training of the people, quality control, packaging and as a storage facility for our products and material.

In 2008 the center has been constructed within two months. 2 solar dryers have been installed in order to dry the products (cashewnuts/rosella flowers) without reducing their quality and colour.

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The Development Center

Test Aerea and Jatropha Production

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6. The next Steps

So far, 7 villages have a sufficient water supply of up to 25 litres per head per day. The remaining 28 villages will be supplied with water within the next 7 to 8 years. Depending on the availability of the necessary funds and the motivation of the inhabitants to participate, we will be prepared to organize the water supply in 3 to 6 villages per year. In 2009 we plan to supply water to four additional villages.

The livelihood process is dependent on many factors. It is our intention to focus our income generating activities only on those villages, which already have a water supply, because it will be easier to develop and control the working processes.

As the development center is already established, we will start product development with cashew nuts (cashew-apple-juice/marmelade), with rosella (tea, marmelade, sirop), with palm sugar and with soap from the Jatropha-Oil. At the same time an Italian designer will help us to design new hat models.

A production process for rosella tea will be established and the sales process has to be organized and improved (for all Muntigunung products).

It is our intention to transfer the different businesses to young Balinese people as soon as the profitability and the sustainability is being secured. It will be then our task to coach the young company owners to stay successful.

7. Involvement of Government and Business Community The Government of Karangasem and of Bali have both been invited to ceremonies in Muntigunung (opening of the first water supply in Tijeng Tali and Jatropha tree planting some days before the Bali Climate Conference. In October 2008 a presentation was held at the office of the

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new Governor of Bali and we got his full support. The Governments are in the meantime delivering cement for our projects and allowed us to use Government owned land for the Jatropha plantations.

Governor and Bupati planting Jatropha Trees

Our exhibition at the occasion of the visit The business community has been involved as well. At a presentation at The Bali Hotel Association, the hotel managers assured us to support the Muntigunung Development Program by purchasing products. The cashew nut production 2008 has already been sold.

Daniel Elber Foundation Future for Children http://www.zukunft-fuer-kinder.ch/en/home/

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