Poverty & Social Impact Assessment: Lessons Learned from Indonesia Asep Suryahadi The SMERU Research Institute

PSIA Ex ante analysis of the distributional impact of a policy change, focusing on the poor Complementary to and to be used as inputs for PRSP

SMERU’s Involvement in PSIA: Rice Import Tariff Pricing (with DFID) Consolidation of Participatory Poverty Assessment Works (with JBIC)

Rice Import Tariff Pricing Choosing the policy  consultation with stakeholders The policy question: Should the tariff on rice import be increased? Two opposing arguments: >High tariff  higher incomes for famers >Low tariff  the poor are net consumers

Methodology I.CGE Modelling  Effects of tariff increase: Consumer price of rice Income from wage labor Profits from farming Relative prices  Existing studies only look at the issue partially

Methodology (continued) II. Policy Interests Matrix  Key stakeholders have different insterests: Policy objectives Rationale/argument Benefits Constraints Transmission chanell Degree of influence

Outcomes CGE modelling captures both sides of the rice tariff debate well Policy interests matrix increases transparency and inclusion

Policy Development Prior to and during the PSIA (Aug - Oct 2002) the announcement of rice import tariff increase was imminent Until now the tariff increase was never announced PSIA impact ???

Lessons Learned Process-oriented  identify losers & winners from a policy reform Limited time frame, existing studies, data availability, & analytical skills There is a need to foster commitment, understanding, coordination, & common vision to tackle the problem of poverty

Lessons Learned (continued) The need to understand decision making process and to involve key decision makers Capacity building for CSO Consolidation of existing works vs original study The impact of PSIA on decision making is severily restricted by its voluntary nature