ROUND TABLE DISCUSSION1 NOTES

TOPIC: Opportunities and Challenges in Supporting Citizen Participation and Promoting Financial Sustainability of Local Services and Infrastructure

Citizen Participation in Local Service Delivery 1. The biggest opportunity in supporting citizen participation is the strong support of governments for good governance as a key element of poverty reduction, as well as presence of a national policy for CDD. The availability of participatory mechanisms, techniques, and tools that are easily accessible with the help of information technology, also poses a good opportunity for promoting citizen participation. Various knowledge sharing activities are useful for learning good practices and lessons that can potentially improve CDD project design and implementation. 2. There is increasing need for capable community facilitators to drive citizen participation particularly in the early stages of CDD projects. To enhance the capacity and ensure continuity of service of community facilitators, there is a need to review and consolidate capacity building efforts and learning environment such as the CDD training and courses offered by various NGOs and academic institutions. It is also important that government support them to keep their commitment to the community not only by strengthening their roles but also by improving their lives. 3. CDD project inherently intends to have the principles of participation, transparency and accountability become part of village governance by transferring the technology to community facilitators and having these pursued throughout the CDD life cycle. The role of facilitators is to develop grassroots leaders to get them to practice and sustain participatory governance beyond project life. Ideally, there is no longer funding for community facilitators beyond the project life because the assumption is that they had facilitated the integration of participatory governance in local development processes by the time the project ends. This should be considered the ultimate objective of an exit strategy normally formulated at the onset of a CDD project in a community. While there is expectation that the CDD approach embeds participatory
1

Held in Jakarta on 22 June 2011 (9:00a.m.-10:00a.m.) as a segment of the Regional Workshop on CDD and Institutional Sustainability in Asia. Participants were Ms. Maria Loreto Padua, KALAHI-CIDSS Task Team Leader, World Bank Manila; Mr. Edward Abdurrahman, Ministry of Public Works, Indonesia; Mr. Asep Suryahadi, Director, The SMERU Research Institute, Indonesia; and, Mr. Edgar Pato, KALAHI-CIDSS National Project Manager, Department of Social Welfare and Development, Philippines. Ms. Sri Wening Handayani, Principal Social Development Specialist, ADB, was the moderator.

governance, more follow-up is needed to ensure the integration and sustainability of participatory governance in local development processes. 4. There is a need to continue consolidating citizens movements in order that they can engender power, considering the temporary status of community leaders serving as village volunteers. This consolidation is necessary so that community volunteers can participate in the bigger arena of development, not only to influence local sub-projects but also to mobilize resources and eventually, move towards influencing the national policy. A broader concern is how various CDD experiences (such as the experiences of Saemaul Undung, KALAHI-CIDSS and PNPM) could be consolidated to influence the enabling environment in order that CDD will drive national development. CDD would be more successful if it is ultimately used as a strategy for national development rather than implemented as a program with external funding support. Advocacy and actual practice of participatory process are important to support CDD and these can start with educating children on citizen participation and applying CDD concepts at the institutional/ organizational level. 5. The devolution of service delivery to local governments presents an opportunity for citizen participation particularly in planning, decision making and budgeting. Community leaders are mandated to represent their respective communities in local development councils, which promote participation in local development processes. However, the quality of their participation needs to be examined in terms of the manner and extent they can influence decision making. In addition, local governments may have varying capacities and receptiveness in adopting participatory processes. It is important to have resource mobilization mechanism and effective service delivery to encourage communities to initiate development projects with available means of financing. It may be noted that community participation may not be sustained after a foreignfunded project ends given that certain systems and procedures (such as direct fund disbursement to communities and community-based procurement) may no longer be applicable. 6. CDD can be viewed as part of Indonesias democratization process as the country shifts from autocratic to democratic governance. It fits well with decentralization where people have more control over development efforts that affect their lives. CDD in the country is supported by a national policy, a good opportunity to develop the approach further. It builds the capacity of communities to build simple infrastructure projects of good quality. Citizen participation, however, is affected by the imbalance in local power structure where the elite control the decision-making process while the poor disproportionately carry the burden of physical work during subproject construction. Also, the poor receive lower wages from these subprojects in order that the community can raise its counterpart contribution. In Asia, including Indonesia, the biased perception on gender roles often inhibits womens participation and incorporation of womens needs in CDD projects. Future CDD projects should carefully address these challenges. Financial Sustainability of Local Services and Infrastructure 7. One of the opportunities in promoting financial sustainability is that CDD inherently develops the capacity of community leaders to mobilize resources and encourages local

government units and national government agencies to share resources to support community subprojects. For instance, KALAHI CIDSS offers the communities training on not only on mobilizing financial resources but also technical resources such as how to invite local government engineers to train the community volunteers on how to prepare technically sound projects. Along with the opportunities are challenges such as difficulty to have financially sound operations and maintain bigger type of subprojects such as water systems and road projects. As it is difficult to push the imposition of user fees enough to maintain a subproject, operations and maintenance are usually relegated to the local government units. In addition, a lot of KALAHI-CIDSS areas are poor and no amount of good capacity building on resource mobilization will be enough to draw in financial support for operations and maintenance in these areas. It is important to increase their capacity to mobilize resources from other sources to help in the operation, sustainability and maintenance of community subprojects. 8. In Philippines, local governments have an opportunity to utilize capital market financing or may engage in borrowing from financial institutions. It is important that they establish a good track record to be able to continually avail of financing services to fund their development projects. A good practice for instance is the introduction of development market place, a scheme where communities and local governments literally market their development proposals to different funding entities (both local and international). This scheme encourages local governments to formulate financing policies that are receptive to the engagement of communities. Meanwhile, financial sustainability of local services may be affected by the dependence of local governments on internal revenue allotment (IRA) and by the limited IRA amount in light of rising demand for basic social services. To ensure financial sustainability of subprojects, community groups are required by KALAHI-CIDSS to develop operations and maintenance (O&M) plans that indicate strategies on how best to sustain subprojects such as generating income stream, ensuring sufficient funds from local sources, and imposition of tariffs or user fees. An O&M plan is required at the onset of project implementation. 9. Some studies in Indonesia found that communities are willing to pay to sustain local services especially when projects directly benefit them. Financial sustainability is a function of social sustainability. When people participate, they expect better outcome which, if achieved, allows financial sustainability of local services. Financial sustainability however is affected by low fiscal capacity in most regions in Indonesia. There exists also a decoupling of community planning and budgeting, the latter being a domain of regional government offices. Plans are well laid out but there is no budget to implement them. This results in some kind of musrembang fatigue in the community wherein people become tired of the approach due to lack of budget to implement projects they have planned. The situation is sometimes exacerbated by the presence of some self-help groups that are not quite motivated to assist community members in subproject implementation. Donors should ensure that their projects have a clear exit strategy to achieve social and financial sustainability. 10. Districts should be more concerned about their respective communities that are willing to implement foreign-funded projects. In these districts, communities should be provided with facilitators and capacity building to enable them to identify and mobilize financial and technical resources. However, the problem is lack of readiness or the varying capacities of districts to

mobilize resources. Public-private partnership and willingness of communities to pay are seen as opportunities to sustain local services and infrastructure. 11. Financial sustainability requires empowerment of communities in order that they can bring in the private sector without relying so much on government resources. A manual for formulating community investment plan that clearly incorporates the process of participatory planning, decision making, project implementation and monitoring and evaluation, may be developed and offered to local governments to encourage collaboration of public and private sectors, which can contribute in enhancing financial sustainability of local services. Conclusion 12. Citizen participation in service delivery is a key element of CDD as it strengthens ownership of subprojects, improves local accountability and transparency, and ensures the quality, maintenance, and sustainability of services and infrastructures. It is better achieved when government has a strong support for good governance and a national policy that underpins CDD. Knowledge sharing and accessibility to available information on participatory mechanism, tools and techniques increase knowledge that stakeholders can consider in improving citizen participation during project design and implementation. The capacity of community facilitators should be enhanced and continuity of their commitment ensured to sustain participatory governance in the communities beyond project life. Issues on elite capture; participation of the poor and women in CDD subprojects; and, readiness and varying capacities of local governments, while these are context-specific, should be addressed carefully in CDD projects or scaling up. 13. CDD offers opportunities for promoting financial sustainability of services and infrastructures by training communities on financial and technical resource mobilization and requiring communities to develop O&M plans at onset of the project. While some communities are willing to pay for using infrastructures that directly benefit them, other communities find it difficult to have financially sound operations and maintenance of infrastructure projects given the difficulty of imposing user fees and limited development funds of communities. Thus, communities and local governments have to increase their capacity to mobilize resources. This is also in light of the disconnect between local planning and budgeting which results in nonimplementation of planned programs and projects. Donors should strictly enforce the formulation of an exit strategy of subprojects. Finally, public-private partnership may be adopted as a strategy to improve the sustainability of local services and infrastructure projects.