Macro Micro Lingkages in Project

Planning an Indonesian Case in

Tsunami Rehabilitation Project

ISKANDAR
Deputy for Economic and Business Development
Rehabilitation and Reconstruction Executing Agency
for Aceh and Nias (BRR)
 THE DAMAGE

Housing • 120,000 housing units destroyed

Infrastructure • 2260 bridges rendered un-passable

• 6.611 fishermen in Aceh killed

Fishery • All major harbors destroyed
Industries • About 25.000 hectares Mangrove
area destroyed

• 150,000 students lost education

facilities
Education • 1823 teachers killed
• 17,228 students killed
• 2112 schools destroyed

Health • 690 health centers destroyed

• Without reconstruction, GDP in Aceh

Livelihoods would decline by 14% between
2004 and 2005
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 AND DESTROYED OVER 800 KM OF COASTLINE

Paris 320 km London

San Fransisco 800 km San Diego

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TOPICS TO BE COVERED

BRR TO RESTORE ACEH-NIAS AND

‘BUILD BACK BETTER’

RURAL DEVELOPMENT AND

AGRICULTURE/FISHERIES REVITALIZATION

MICRO-MACRO LINKAGES
 BRR TO RESTORE ACEH-NIAS AND ‘BUILD BACK BETTER’

BRR Mission

To restore livelihoods and strengthen

communities in Aceh and Nias by designing
and implementing a coordinated,
community-driven reconstruction and
development program with the highest
professional standards

4-Years Vision

To build dignified, transparent,

democratic and prosperous Aceh and
Nias societies

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COMMUNITY CONSENSUS IS A KEY FOR BOTTOM-UP APPROACH

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 INTERNATIONAL COMMUNITY HAS SHOWN GREAT GENEROSITY
USD million
Approved projects Commitments/MOUs

NGOs 982 982

Red Cross 320 600

Bi-lateral donors 679 1,414

Multi-lateral donors* 541 1,203

MDTF 307 450

United Nations 391 391

Govt. of Indonesia ‘05

397 2,100
(debt moratorium) budget

Total value $3.6B $7.1B

* Includes EU, ADB, IDB, IOM
Source: BRR Project Concept Note database, BRR Commitments/MOUs/Pledges database 7
 MAIN FOCUS HAS BEEN ON HOUSING AND INFRASTRUCTURE

USD million

Infrastructure
1,941
and housing
Health 384

Economic
367
development
Cross sectoral 303

Institutional building 215

Education 208

Religion, Social,
67
and Culture
Secretariat 65

Spatial planning 49

Not allocated 18

Total value $3.6B

Source: BRR Project Concept Note database 8
 $3.6 BILLION IN PROJECTS HAVE BEEN APPROVED
USD million*

3,855
3,617
3,371

Off
2,541 budget

830 On Goal
budget

Reviewed** Approved Funded

* FX rate of 1 USD = 10.000 IDR

** Through approval workshops (incl MoUs) and government budget 9
 2005 GOVERNMENT BUDGET PROJECTS
NEED TO BE MONITORED AND ACCELERATED

Government budget project •Local government projects

Million Dollars funded by 4 trillion Rp debt
moratorium allocation slow
to start
400

Government •BRR hiring technical

budget advisors to review project
monitoring designs and monitor
110 & procurement process
acceleration
45

•BRR reserves right to take

Budget In Started
over direct implementation
approval tender
process of projects in event of
serious delays or
irregularities

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 TARGETS BY THE END OF THIS YEAR
IDPs •Get all IDPs out of tents

Housing •Build 30,000 houses

& land •Provide water and sanitation to 35,000
•Issue 50,000 land titles

•Strengthen existing roads & bridges (to carry 20 ton

Infrastructure trucks)
•3 ports rehabilitated
•Sea wall protection in Banda Aceh
Education &
Health •150 new or rehabilitated schools; 200 under construction
•2 hospitals and 130 health facilities completed (25
Puskesmas, 30 Pustu, 75 Polindes)
Economic
Development •Rehabilitation or distribution of 10,000 boats
•Rehabilitation of 35,000 hectares of farmland
•Recovery of 4,800 SMEs
Institution
Development
•Complete training for 460 project leaders and
administrators, and head of technical offices from all
Kabupatens 11
BRR IS COORDINATING 5 MAIN EFFORTS TO HELP ACHIEVE TARGETS
Temporary shelter Village planning
• Get 67.000 IDPs out of • Planning, community
tents and upgrade existing mapping and land titling
Temporary
shelters by mid December Village
standards set (piloted with
shelter
• UNORC manages program planning
USAID)
• IFRC leads implementation, • Training starting for NGOs
importing temporary and facilitators for village
shelters mapping and planning
2005 • BPN accepts community
• IOM+Atlas+UNJLC: logistics
• NGOs: assist shelter TARGETS planning for land titling
construction and upgrading and have now sent 180
staff
Monitoring
Infrastructure Permanent housing
• BRR rolls out monitoring • Shelter Working
and evaluation system Emergency infrastructure Group creating
Monitoring
• All stakeholders need to • Rehabilitate key alignment on
system
provide activity infrastructure, facilities standards
information essential for transport and • Clear targets agreed
• Advisory Committee on Emergency
logistics over next 6m with 20 organisations
Information Management • World Bank funds manages
infrastructure responsible for 80%
& Monitoring (UNIMS, • Fast implementation of construction
World Bank, etc.) RAND methods
system online • NGOs, UN carry out work
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 MONITORING SYSTEM WILL MAKE USE OF 5 CHANNELS

BRR
BRR

Bupati/
Bappeda

Statistics PO Surveyor
Camat Camat Bureau, boxes, consul-
NGOs, Govt.
donors, SMS, tants
Donors projects
academics e-mail
, etc.

Villages

Project Community Random

1 2 3 Impact 4 Complaints 5
progress monitoring surveys Handling Field
reporting mechanism Mechanism Checks

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 GEOGRAPHIC GAPS ALSO EXIST – CERTAIN KECAMATAN
MAY BE LACKING PROGRAMS

Legend
Kecamatan without plan or activity

All sectors have plan or activity

1 or 2 sectors have no plan or activity

At least 3 sectors have no plan or

activity
No data

* Source: Camat survey by Garansi of 77 affected kecamatan 14

 KEY PERFORMANCE ISSUES
Issue Action required

Government •Slow pace of 2005 government •Local and central

projects projects government departments
to speed up fund flows &
•Not always using community- implementation
driven approach
NGOs
•Variable quality and equity of •NGOs to adopt code of
outputs conduct and register with
•Non-registration BRR
•All stakeholders to cooperate
Governance & •Risk of corruption with BRR Anti-Corruption
transparency •Lack of transparency into fund Unit and KPK, e.g.,
usage encourage use of complaints
mechanism
Information •Lack of consolidated, verifiable •All stakeholders to
data on reconstruction collaborate with BRR-led
activities monitoring processes
•Lack of awareness of programs
Participation among IDPs&local communities •All stakeholders to invest in
communication with
•Bupati and Camats not always beneficiaries & government
informed
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 RURAL DEVELOPMENT AND
AGRICULTURE / FISHERIES REVITALIZATION
• Low farmer/fishermen productivity
Condition before • Low farmer/fishermen income
Tsunami
• Low farmer/fishermen individual productivity

LABOR PRODUKTIVITY INDEX

SECTOR
YEAR 2003 YEAR 2004

Agriculture, Fisheries, 0.32 0.31

Forestry
Industry 2.80 2.78

Industry related to 2.61 2.64

agriculture, fisheries, and
forestry

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 • Even lower farmer/fisher productivity

Condition after • Damaged agricultural land and fish pond

Tsunami • Loss of fishing boat
• Loss of agricultural machinery
(hand tractor, thresher, etc)
• Loss of livestock

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 • Community base development
Strategy
• Commodity base program
• Market orientation
• Integrated approach

Rehabilitation and
reconstruction

• “Build back better”

• Revitalization of Agriculture, Fisheries and
Forestry (promoted by Indonesian
President)
• Opportunity to start implementation of the
program in NAD and Nias
• Possibly become a role model for other
province in Indonesia

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 Micro-Macro Linkages

The concept of micro-macro linkages:

different from a way it is commonly used

Common : a) The effectiveness of the micro-level initiatives such as

at the village level are successfully replicated in other
areas and thus have a beneficial impact much greater than
in the original program area.

b) The degree to which micro-level initiatives have a

favorable effect on macro policies.

Sources : Assessment of Micro-Macro Linkages in Poverty

Alleviation: South Asia prepared by the United Nations
Development Program Evaluation Office in October 2003.

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Our discussion : examining the relationships between the
benefits produced by Micro-level
initiatives/projects and the existing of
complementary Macro-level initiatives.

Our basic the benefits/productivity of many types of

hypothesis: micro-level initiatives can be enhanced by
complementary macro-level initiatives.

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Problem in RR: The productivity of micro livelihood activities in
villages is limited by insufficient linkages/support
from macro activities

Soon after the Tsunami, NGOs acted quickly with various programs to
help villagers restore their livelihoods.

Major areas of endeavor were:

1. Cash for work schemes helping farmers to clear their lands of debris
brought by the tsunami and repair irrigation and drainage channels;
2. Provision of agricultural ingredient inputs to farmers such as seeds,
fertilizers, pesticides, etc.;
3. Provision of machinery and equipment to farmers such as hand
tractors, tillers, threshers, hand tools;
4. Replanting of trees especially coconuts and mangroves;
5. Replacement of fishers’ boats, equipment, and landing sites assist
small businesses to become re-established through grants and micro-
credit;
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6. Rehabilitation of household and cottage industries;
7. Training persons to enable them to earn incomes as service
providers or employees—such as to become bricklayers, carpenters,
mechanics, seamstresses, preparing foods of various types, fish
drying and other processing.

The potential benefits from most

of these micro livelihood activities
are limited by insufficient supportive
macro activities.

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 A Strategy for Rehabilitation and Reconstruction

Fast respond from NGOs with their livelihood programs need to be

supported by macro program.

The BRR recognizes that through its

debt moratorium funds it can fund
macro activities that will have a very
positive effect on the benefits
realized from the micro livelihoods
funds.

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The success of the agricultural livelihood activities is affected by the
macro support activities.

High quality seeds will increases productivity

But need support from agricultural inputs:

- such as chemical fertilizers and pesticides,
- in the case of rice paddy to have good control
over the irrigation water supply.

If the roads serving the farmers has not been repaired:

- the costs of their inputs will be high,
- the price of their produce will be low,
- uneconomic for farmers to increase their productivity

Thus the BRR puts a very high priority on rehabilitating the

road network serving rural areas

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Irrigation system is greatly
affected by:
- rehabilitation of the irrigation
channel and system by NGO
- deforestation upstream and
erosion

For this reason the BRR:

not just concerned with the
condition of the irrigation after
rehabilitation by NGOs in
specific villages,
but also with the condition of the relevant parts of the connected river
basin.

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Chemistry of the soils:
Change significantly after the Tsunami,
especially in its salinity.
In some cases the NGOs went ahead with
their land rehabilitation and support for
replanting programs without being aware of
serious soil chemistry problems.

Because of this, the BRR is supporting a

program to have soil experts survey these
areas and make recommendations for
treating the land before replanting it, or
making recommendations about the types of
plants that are suitable.

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 Other macro factors affecting farmers’
productivity:
– titles to their land,
– the quality of research and its
application
– the prevention of plant and animal
diseases
– quality agricultural extension services
– the healthiness of the environment in
which the farmers live

In these cases usually actions at a larger than village scale are required
to address problems and increase potentials.

The BRR in its programs is providing support in these ways to the village
focused livelihood programs.

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 Rehabilitation of Aquaculture Activities

The rehabilitation of fish ponds

including water supply and
drainage channels is also a
common livelihood activity in
coastal areas.

Macro external factors also greatly

affect their success:
• Shrimp hatcheries and nurseries
to supply the baby shrimp
• Nearby cold storage, processing,
and marketing facilities are
required to support the
aquaculture activities of the
farmers.

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 Rehabilitation of Fishing Activities

The rehabilitation of fishing activities including:

• the replacement of fishers’ boats,
• Provision of equipment, and landing sites

But:
Not sufficient for success.

Other facilities needed (supported by BRR):

• processing and cold storage facilities
• well developed transportation network
to get the fish to market
• fuel service stations.

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 Rehabilitation of Household and Cottage Industries

Rehabilitation of household and cottage industries (HCI) can also be

hampered by external macro factors.

• The existence of a sufficiently developed road network

– to lower the costs of raw materials and
– to increase the produced product price

• The availability of reasonably priced, reliable and good quality

supplies of electricity.

• Availability of micro-retailers to sell their products.

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• Business development services:
– Can substantially improve their competitiveness,
– Can greatly complement village livelihood activities,

Fortunately in Aceh:
Swiss Contact and the International Finance Corporation through
their PENSA program will be helping to increase the supply of these
services.

• General business climate

– The costs of licensing to operate (time and money).
– Avoid licensing when possible, unless control is essential
– One stop service centers is crucial, such as the small business
regional forums (FORDA) and the PENSA program
– Law and order are also very important. E.g. theft of produce.

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•charges and levies

–Harder on smaller establishments relative to larger ones

producing the same products and services.

–For example, a road check post payment of Rp 10,000 might

be required for a one-ton truck but only Rp 30,000 for a ten
ton truck.

–This is a macro problem that usually requires actions at the

district or sub-district level rather than the village level.

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 Employment of Persons Trained is Dependent on
Macro / External Factors

Livelihood programs often include training activities for employment both

within and outside the village. In the case of training for outside
employment clearly policies and programs affect the employment
demand for the trainees.

If the persons trained are not the best trained and most productive, then a
policy of setting high minimum wage rates will make it difficult for them
to secure the jobs relative to more highly trained persons. In the case of
Aceh, employers may prefer to bring in more highly trained persons
from other provinces.

Clearly also the types of skills developed through the training must match
the composition of demand for these skills in the marketplace outside of
the village. Individual livelihood training programs in villages may not
be knowledgeable about the overall supply and demand for particular
types of skills in the larger marketplace.

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Thank You
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