Multistakeholder Forestry Programme

State building in Indonesia:

An aid instrument to support governance reforms

Big themes

● Improving governance and building an effective state

● Demonstrating impacts on poverty● Using a complementary aid instrument● Supporting policy reform for growth and

rural employment, decentralisation● Improving environmental management

Why forestry?

● It’s not about the trees…● Poverty in Indonesia = 36 million (17% below

$1), variable (e.g. 42% Papua)● 10 million poorest have forest-based livelihoods● Natural resource drivers of bad governance● Bad governance results in poverty and

environmental decline● Forest policy as entry point for engagement on

key development themes: growth, poverty, anti-corruption, democracy, conflict, decentralisation

Conceptual framework

● Political economy framework: Agents (individuals and organisations) Institutions (rules of the game, regulations and norms) Structures (power relationships to sustain special interests)

● Role of civil society in challenging government, promoting pro-poor change

● Forestry as an entry point for change: Conflict and injustice: communities, with govt and pvt sector Governance: access to land resources and services Poverty: 50m in forest, income, health, env services, no

voice

Context: the political economy

● Pre-1998 - Soeharto’s centralized elites, dominate politics, corruption and patronage to serve economic interests

● Collapse, chaos and new political space● Rapid change – decentralisation, growth of

civil society, democracy, changing power and influence

● Still contested: political economy of land, high value timber, decentralised power

The MFP

● Approach and design process (1999-2000) Drivers of Change analysis of political transitions Broker new relations between citizens & state

● £25m (2001-2006) for grants for civil society and government partnerships, with added facilitation

● Modest expectations – to improve the conditions for pro-poor policy reform

● Phasing from “1000 flowers” to strategic game plan

Scale of intervention

• over 220 partners, range of partners and roles

Local NGOs

Farmers unions, Women’s groups …

Media

National Ministry

Universities

Local governments

Research organisations

Nat / Intl NGOs

Adat federations

Community development

Local parliaments

Networking

Watchdog

TrainingAdvocacy

Research

Marketing

Grant-making

Working at local level (e.g. Sulawesi)

-Poverty analysis, conflict mediation, informal justice

-Social mobilisation, farmers’ associations

-Demonstration of negotiated settlements

-Multistakeholder Forum negotiating rights

-District regulations setting rights

-Communication forum

-Advocacy network

-Market development

-Policy analysis, shared learning

-Press network

Working at national level

● National partnerships, MFP and Ministry seconded staff

● Role for MFP nationally, to facilitate Building of policy evidence Shared learning and building capacity Policy and economic analysis Policy advocacy Challenging assumptions about poverty

● Multiple and diverse policy arenas local experience into national and international

policy debates international policy leverage in local advocacy

Staff Salaries 17%

Partnership Grants 61%

Value added 16%

Consultants 2%Offi ce Running Cost 4%

MFP facts and figures - budget

● ₤25m commitment over 6 years● Over ₤16m in grants to partners● 379 grants 2001-2005, ave

£28k● ₤2.5m block grant to MoF● Administration covers 1 national

& 6 regional offices, 32 staff● ₤4m for value added activities:

support to partners capacity building shared learning policy analysis advocacy and communications monitoring

MFP facts and figures - partners

Types of grantee: number of grants (2000-2005)

Provincial government 3%

Local NGO 48%

National NGO 17%

International NGO 5%

Individual 4%

District government 3%

Central government 8%

Private sector 1%People's Organisation

5%

University / research institute 6%

MFP facts and figures - regions

Number of grants to regions

Sumatra9%

Sulawesi13%

Nusa Tenggara10%

Papua4%

Kalimantan16%

Java10%

National38%

MFP facts and figures – grantees

Types of NGOs: no. of grants

Research 12%

Networking 17%

Marketing 2%

Grant-making 1%

Community development 50%

Training 5%

Advocacy 13%

● changing attitudes● changing policies● changing the rules of the game● building skills and capacity

Governance impacts

In local government: building understanding; supporting leaders; developing a client-focus

In NGOs: from conflict to partnership, from competition to networking

In business: from dominance to participation

In politicians: better informed on issues and solutions

53 districts with reviews of policies, regulations, budgets

local government policies cover land access; customary rights, payment for environmental services, management partnerships …

national policies cover money laundering laws, land rights, forest product export regulations …

new trust, partnerships and power relations between poor people and governments

more transparent policy-making

joined up governments

corruption and transparency

organisational changes

recognition of the role of civil society

in local government: dealing with rural communities

in Ministry: running consultations

in NGOs: organisational and professional skills

in CBOs: mobilisation skills

● increased voice● reduced vulnerability● more transparent, accountable

government● better incomes

Poverty impacts – changing lives

participation in policy-making

building political and social capital, networks, information social networks and political groups, access to local government

reduced conflict (within communities, with government / business)

access to justice (at least informal)

diversification of livelihoods

protection from crises & shocks – drought, flood, market prices

transparent and consultative policy-making

responsive policies

market services

stronger decentralisation and democracy

accumulation of assets (health, education, housing, land, trees…)

ability to sustain assets

Lessons – building effective states

● Support political processes around voice and accountability

● Work explicitly in the political economy● A sectoral entry point is important● Demonstrate results - governance reforms

lead to: reduced poverty outcomes better managed natural resources economic growth and employment

Lessons – aid instruments

● A new kind of instrument – partnership grants with strategic facilitation (not just a CS challenge fund)

● Timing and context important● Complement to other instruments● Good effort to reward ratio for DFID● DFID comparative advantage

Lessons – harmonisation and alignment

● Alignment behind weak (not pro-poor) government policies does not build effective states

● Ownership needs to be broadly based● Sustain the momentum● Harmonise through multi-donor funding

frameworks