1. Australia-Indonesia Partnership for Rural Economic Development in Eastern Indonesia (AIP-Rural) Program Design & Preparation -long design process: commenced 2008, fully contracted mid 2015 -design has undergone substantial changes: simpler, more focussed, clearer objectives -internal capacity to drive this process was critical -analysis, early activities are very useful preparations -contracts not overly prescriptive, things change after implementation -start-up: usual problems, need an MC with excellent operational and support systems

2. AIP-Rural Operational challenges -DFAT approval processes can be laborious – may encounter resistance and scepticism -Critical to have: -internal champions in DFAT executive, advisers -simple, high quality communications products -a strategy to engage DFAT managers - field visits are worth the investment -build strong understanding within the DFAT team -support of a strong procurement team: need clarity around procurement and partnership guidelines [ie grants, MOUs, sub-contracting)

3. AIP-Rural Operational challenges Liaison with counterpart governments -critical to build understanding and commitment early -relations between national and sub-national governments can be different: find champions -develop an engagement strategy – field trips, study tours, capacity building -need to be pragmatic and willing to compromise, but be clear on where and how much

4. AIP-Rural Operational challenges Quality and results reporting: five ADRs are relevant DFAT activity managers need to understand assumptions, methodology for calculations may be required to set benchmarks/projections the more DFAT managers know about your programs, the more they’ll trust your reporting independent, high level strategic advice has been very positive

5. AIP-Rural Operational challenges Biggest challenge is scarcity of market development experience: –consultants –implementation team capacity –finding the right personnel

6. Challenge: Government Relations Aligned with policy not through government History and expectations Decision making vs. consultation Getting results and toughing it out Involvement in activities and output based payments

7. Challenge: Budget Management Administration costs vs. activity costs Donor pressures/incentives Flexibility > budget variability, usefulness of replicable activities (e.g. infrastructure), shifting across line items Activity Costs80706050403020 Staff 20304050607080 Operations Management Fee

8. Challenge: Results, Targets, Projections Demand – What are we buying? Year-by-year vs. end-of-program results (e.g. irrigation/agribusiness) Projections vs. actual results Intermediate indicators especially change at provider level vs. change at farm level

9. Challenge: Control vs. Oversight Replacing upfront controls (e.g. designs, workplans, committees) with process oversight (e.g. review groups, system set up, DCED audits)

10. Challenge: Design Focus on principles, flexibility, staff and culture Less is better But clarity on technical and operational support from implementer But cannot ‘manage by contract’