Written evidence submitted by the Indonesian
Embassy in London
How effectively developing country governments
and donors, particularly DFID, are addressing the challenges presented
by urban poverty
1. One sample from the DFID project that
has touched on the issue of slum dwellers is a project called
"Civil Society Initiatives Against Poverty" in Surabaya,
East Java Province which was implemented by ASIA Foundation and
an Indonesian NGO during 2007-08. The main objectives of the project
are:
(a) To influence the policymakers to adopt a
pro-poor regulatory framework to increase accessibility of services
and economic opportunity for the poor. In particular, improving
the accessibility of government sponsored health services for
the urban poor.
(b) Improve the governance, law and civil society;
empower women; institute economic reform and development; and
enhance international relations.
2. One of the main activities of the project
is to increase accessibility of the government sponsored health
services for the urban poor, in particular street children. Rp.
277.000.000 of assistance will be used over a 10 month
period of implementation. The NGOs have provided reliable and
in-depth research to show that the majority of poor people are
not equipped with the proper documents, which effectively excludes
them from the government service sponsors.
3. The impact of this has been a positive
change in policy, practice and behaviour in one major public hospital
in Surabaya to optimally use the pro-poor budget available for
health service delivery without discrimination. In accordance
with the evaluation from Citizen Voice & Accountability (CVA)
in September 2008 conducted by several donor institutions
including DFID, the project was regarded to be very effective
and efficient. The evaluation concluded that the Indonesian NGO
and Asia Foundation have demonstrated how a civil society organization
can work effectively in mobilizing and channelling the voice of
marginalized poor citizens to realise their rights to public services.
DFID Contribution to meeting the Millennium Development
Goals (MDGs) 7 target which seeks to improve the lives of
slum dwellers
4. The development assistance from DFID
has focussed much on various aspects that are closely related
with the achievement of MDGs particularly education, health, good
governance, and poverty alleviation. DFID has also actively been
assisting the Government of Indonesia's effort in handling AIDS
particularly in the province of Papua and West Papua. For the
year 2007-08 the total amount of development assistance from
DFID reached £40 million. DFID has also provided development
assistance in the form of technical and humanitarian assistance
for the reconstruction effort, in the aftermath of tsunami in
Aceh and earthquake in Yogyakarta province.
The provision of basic services and infrastructure
in slums including, health and education, sanitation, water, energy
and transportation
5. With a large and rapidly growing population
of 240 million people, tackling the problem of urbanization
and poverty has increasingly become an enormous challenge for
Indonesia. Based on recent studies, Indonesia's level of urbanization
by 2025 will reach 68%, and by the year 2020, Indonesia is
expected to have five megacities and 23 cities with a population
of more than one million people. With 60% of the total population
residing in Java, Indonesia's capital, Jakarta, remains the most
populated city in South East Asia and by 2015 it is expected
to be the 5th largest city in the world. With continuous inward
migration, the province of Jakarta held a population density of
13,240 people per square kilometre in 2004 compared
to the national average of 114 people.
6. The social effect of this problem, often
referred to as over-urbanisation, despite creating explosive economic
growth, it has opened up a myriad of social problems such as poverty,
unemployment and an expansion of existing slum areas. However,
at the same time there is a greater urgency to fulfil basic needs
and infrastructure such as housing, education, health services,
water, energy and transportation. In this regard, the Government
of Indonesia has design multiple policies which have been implemented
by various Ministries, furthermore with the support of regional
government there is greater emphasis being placed on tackling
the urbanization and poverty problem and in providing the basic
needs and infrastructure.
7. To tackle the issue of poverty, since
President Susilo Bambang Yudhoyono administration took office,
the Government of Indonesia has adopted a strategy of "growth
with equity" using triple track priorities aimed at encouraging
growth (pro growth); increasing job opportunity (pro job); and
reducing poverty (pro poor). In order to implement these priorities,
especially for the low income people in rural as well as urban
areas, the government has created several nationwide social security
schemes such as Bantuan Langsung Tunai ("Direct Cash Assistance
scheme"); Jaminan Kesehatan Masyarakat ("People's Health
Guarantee" scheme") and Bantuan Operasional Sekolah
("Operational Assistance for School" programme); Program
Keluarga Harapan ("Hope for the Family" programme);
and the "Provision of Low Price Rice for Poor People"
scheme.
8. In relation with the provision of basic
infrastructure, particularly on the issue of facilities for education,
the Government of Indonesia has increased its education budget
every year and will reach 20% of the state budget, as stipulated
by the Constitution, by the year 2009. The education budget increased
from Rp 78.5 trillion (US$ 7, 271 billion approximately)
in 2005 to Rp 154, 2 trillion (US$ 14, 284 billion
approximately) in 2008. The education budget will be used for
rehabilitation and construction of thousands of school buildings;
operational assistance for school programmes; and scholarship
assistance for million of students who come from low income families
starting from primary school until high school as well as at University
level.
9. In order to reduce the drop out rate
of students from low income families caused by financial difficulties,
the government has designed "The Hope for the Family Programme"
and a "Direct Cash Assistance" scheme conditional on
parents sending their child to school and maintaining their child's
attendance. This programme has been implemented in 73 regions
and cities. The Government of Indonesia has also increased the
teacher's salary (annual or monthly) from Rp. 842.000 (US$
77.99) to Rp. 1,854 million (US$ 171, 74).
10. For the health sector, the government
has also increased the budget from Rp. 5.8 trillion (US$
463,177 million approximately) to Rp. 16 trillion (US$
1, 482 billion approximately). The extra money will be used
to support the health services in various regions and cities and
the "People's Health Guarantee" scheme. The programme
to guarantee health services for low income people has now covered
around 76.4 million people. The government has also reduced
the price for generic medicines that are commonly used by low
income people. In additional, the government has revitalised the
birth control programme covering around 5.7 million people.
11. With respect to water and sanitation,
since 1998 the Government has established a policy and mechanism
to cooperate with the private sector in order to provide clean
water. This policy was later strengthened by the government through
Ministerial Decree No.409/KPTS/2002 by the Minister of Settlements
and Basic Facilities in 2002, which has to regulate the working
mechanism between government and private sector in providing water.
The Government of Indonesia has also prioritised the provision
of water and water management in the National Development Programme
2000-04 which stipulated the need to increase the service
quality and management of a settlement area including clean water,
waste water, drainage, public waste and flood mitigation. In this
context, during 2005-06 the government also built clean water
facilities for 1.1 million people living in urban areas.
12. For sanitation and waste management,
the Ministry of Public Works which is the old Ministry of Settlement
and Basic Facilities, has commenced research on the prospect of
establishing a waste management scheme based on community initiatives
and by engaging all stakeholders. Meanwhile the national government
and regional governments as well as donor institutions are expected
to assume the role of facilitators.
13. Relating to the provision of energy,
Indonesia for several years has had to confront the problem of
fluctuations in energy prices, particularly oil prices. This has
prompted the government to prioritise energy security by promoting
energy efficiency and reducing the burden of oil subsidies from
the state budget by raising the price of gasoline several times
between 2005 and 2007. The Government has also been promoting
energy diversification by encouraging the development of renewable
energy such as hydro-power, geothermal, and bio-fuel. Particularly
in urban areas, the government has promoted the transfer of usage
from kerosene burners toward liquid gas burners in order to foster
energy diversification and energy security.
14. The Government is also now pro-actively
increasing the electric power plant capatown throughout Indonesia.
In this regard, the Government has launched 10,000 Megawatt
programme to alleviate the problem electritown supply in the islands
of Java and Bali in 2009.
15. The Government of Indonesia has shown
a strong commitment to improving transport and communication facilities
as part of a strategy to assist economic development in the regions
as well as to strengthen the unity of Indonesia. Since President
Yudhoyono took office, the government has enacted the National
Road Network Plan through Ministerial Decree in 2005. Furthermore,
between 1999 and 2007, the government managed to increase
the length of the national road network from 290,000 km to
396,362 km. In addition, the government has increased the
infrastructure budget from Rp 21.9 trillion (US$ 2,028 billion)
to Rp. 58 trillion (US$ 5,372 billion). This increase
will be used for completing several important projects such as
the bridge that will link Java and Madura as well as several airports
in Indonesia's major cities.
Supporting opportunities for employment and livelihoods
for the urban poor
16. Since the year 2007, the Government
of Indonesia has launched a national programme called "National
Program for People Empowerment", which is a coordinated effort
to give assistance in order to create jobs and infrastructure
improvements in rural and slum areas in cities. Initially, the
amount of assistance was Rp 500 million (US$ 46, 317) covering
2,891 Kecamatan (similar to Boroughs in London). In 2009,
the government has committed to enlarge the target area to 5,236 Kecamatan
and increasing the amount of assistance to Rp 750 million
(US$ 69,476).
17. The government has also launched several
programmes to support low income people such as the empowerment
of small medium enterprise (SMEs) and the provision "Business
Credit for People" scheme covering 950,000 people in
order to support job creation and improve access to economic opportunities.
18. The Government of Indonesia has initiated
an improvement for public services since 2006, particularly in
relation to the registration of citizens with identification cards
and improvement in the application process for driving licences,
car number certificates, passports and tax payments. In this regard,
the government has also launched a programme of free birth certificate
registration in 100 Kabupaten (municipalities).
The role of property rights in improving the lives
of slum dwellers
19. Since 2005, the government has started
to launch a land registration programme by assisting the people
in registering their land certificates so that their land has
a clear legal entitlement and right. Until the year 2006 the
registration programme reached 591,000 ha land. Particularly
in disaster stricken areas like Aceh, the government has giving
a free service to re-register the land that belonged to the people.
20. The government fully realises that land
entitlement and land legal rights are a crucial part of agrarian
reform aimed towards distributing and allocating land, especially
for low income people, which consequentially would certainly help
low income people to improve their livelihoods.
The implication of the current global financial
downturn for urbanization in developing countries
21. The global financial crisis has created
enormous challenge for macro-economic conditions in Indonesia.
The Coordinating Minister of Economic Affairs, Mrs. Sri Mulyani
Indrawati has predicted that Indonesian exports will contract
by 3% in 2009 due to the slowing down of the economies of
Indonesia's trade partners. Investment will also likely be hit,
down to 5.9% from the 7.5% as previously predicted, due to the
credit crunch reducing the flow of money. All these factors, as
Coordinating Minister Sri Mulyani has pointed out, would contribute
to a higher rate of unemployment and poverty. As of January 2009,
export-oriented industries have made 24,790 workers redundant,
and were planning to lay off another 25,000 in the February
2009. Hence, the increasing rate of unemployment will certainly
worsen both in the rural and urban areas.
22. The Government of Indonesia has allocated
Rp. 73 trillion (US$ 6,762 billion) for 2009 as
a stimulus package in cushioning the financial crisis' impact
on poor people. The majority of the stimulus package will be used
for infrastructure projects aimed at generating growth as well
as for empowerment programmes.
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