Multistakeholder Forestry Programme State building in Indonesia: An aid instrument to support governance reforms

Big themes Improving governance and building an effective state Demonstrating impacts on poverty Using a complementary aid instrument Supporting policy reform for growth and rural employment, decentralisation Improving environmental management

Why forestry? Its not about the trees… Poverty in Indonesia = 36 million (17% below $1), variable (e.g. 42% Papua) 10 million poorest have forest-based livelihoods Natural resource drivers of bad governance Bad governance results in poverty and environmental decline Forest policy as entry point for engagement on key development themes: growth, poverty, anti-corruption, democracy, conflict, decentralisation

Conceptual framework Political economy framework: Agents (individuals and organisations) Institutions (rules of the game, regulations and norms) Structures (power relationships to sustain special interests) Role of civil society in challenging government, promoting pro-poor change Forestry as an entry point for change: Conflict and injustice: communities, with govt and pvt sector Governance: access to land resources and services Poverty: 50m in forest, income, health, env services, no voice

Context: the political economy Pre Soehartos centralized elites, dominate politics, corruption and patronage to serve economic interests Collapse, chaos and new political space Rapid change – decentralisation, growth of civil society, democracy, changing power and influence Still contested: political economy of land, high value timber, decentralised power

The MFP Approach and design process ( ) Drivers of Change analysis of political transitions Broker new relations between citizens & state £25m ( ) for grants for civil society and government partnerships, with added facilitation Modest expectations – to improve the conditions for pro-poor policy reform Phasing from 1000 flowers to strategic game plan

Scale of intervention over 220 partners, range of partners and roles Local NGOs Farmers unions, Womens groups … Media National Ministry Universities Local governments Research organisations Nat / Intl NGOs Adat federations Community development Local parliaments Networking Watchdog Training Advocacy Research Marketing Grant-making

Working at local level (e.g. Sulawesi) -Poverty analysis, conflict mediation, informal justice -Social mobilisation, farmers associations -Demonstration of negotiated settlements -Multistakeholder Forum negotiating rights -District regulations setting rights -Communication forum -Advocacy network -Market development -Policy analysis, shared learning -Press network

Working at national level National partnerships, MFP and Ministry seconded staff Role for MFP nationally, to facilitate Building of policy evidence Shared learning and building capacity Policy and economic analysis Policy advocacy Challenging assumptions about poverty Multiple and diverse policy arenas local experience into national and international policy debates international policy leverage in local advocacy

MFP facts and figures - budget 25m commitment over 6 years Over 16m in grants to partners 379 grants , ave £28k 2.5m block grant to MoF Administration covers 1 national & 6 regional offices, 32 staff 4m for value added activities: support to partners capacity building shared learning policy analysis advocacy and communications monitoring

MFP facts and figures - partners

MFP facts and figures - regions

MFP facts and figures – grantees

changing attitudes changing policies changing the rules of the game building skills and capacity Governance impacts In local government: building understanding; supporting leaders; developing a client-focus In NGOs: from conflict to partnership, from competition to networking In business: from dominance to participation In politicians: better informed on issues and solutions 53 districts with reviews of policies, regulations, budgets local government policies cover land access; customary rights, payment for environmental services, management partnerships … national policies cover money laundering laws, land rights, forest product export regulations … new trust, partnerships and power relations between poor people and governments more transparent policy-making joined up governments corruption and transparency organisational changes recognition of the role of civil society in local government: dealing with rural communities in Ministry: running consultations in NGOs: organisational and professional skills in CBOs: mobilisation skills

increased voice reduced vulnerability more transparent, accountable government better incomes Poverty impacts – changing lives participation in policy-making building political and social capital, networks, information social networks and political groups, access to local government reduced conflict (within communities, with government / business) access to justice (at least informal) diversification of livelihoods protection from crises & shocks – drought, flood, market prices transparent and consultative policy-making responsive policies market services stronger decentralisation and democracy accumulation of assets (health, education, housing, land, trees…) ability to sustain assets

Lessons – building effective states Support political processes around voice and accountability Work explicitly in the political economy A sectoral entry point is important Demonstrate results - governance reforms lead to: reduced poverty outcomes better managed natural resources economic growth and employment

Lessons – aid instruments A new kind of instrument – partnership grants with strategic facilitation (not just a CS challenge fund) Timing and context important Complement to other instruments Good effort to reward ratio for DFID DFID comparative advantage

Lessons – harmonisation and alignment Alignment behind weak (not pro-poor) government policies does not build effective states Ownership needs to be broadly based Sustain the momentum Harmonise through multi-donor funding frameworks