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 2007-2008. 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;

 

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;

 

1. With a large and rapidly growing population of 240 million people, tackling the problem of urbanization and poverty has increasingly become an enourmous 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 1 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.

 

2. 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.

 

3. 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.

 

4. 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.

 

5. 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).

 

6. 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.

 

7. 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 2000-2004 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.

 

8. 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.

 

9. 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.

 

10. 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.

 

11. 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;

 

1. 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).

 

2. 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.

 

3. 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;

 

1. 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.

 

2. 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;

 

1. 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.

2. 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.