Fighting Inequality for Better Growth

PROCEEDINGS

INSPIRE • IMAGINE • INNOVATIVE

Indonesia Development Forum 2017 Fighting Inequality for Better Growth

Jakarta, 9-10 August 2017 KSI wish to thank Bappenas and the Australian Embassy Jakarta for their support and leadership throughout the design, preparation and implementation of IDF, specifically Dra. Rahma Iryanti, M.T, Dr. Ir. Leonard VH. Tampubolon, MA, Leonardo AA Teguh Sambodo, SP, MS, Ph.D, and Maliki, ST, MSIE, Ph.D, from Bappenas, and Bradley Armstrong, Fleur Davies and Nicola Nixon from the Australian Embassy Jakarta. We are also grateful to the many rapporteurs, editors, copy-editors and graphic designers that supported the production of the proceedings. INSPIRE • IMAGINE • INNOVATIVE

DIDUKUNG OLEH

diimplementasikan oleh: “Development naturally aims to reduce inequality and improve people’s lives. Public participation and involvement are key to successful development. I hope the Indonesia Development Forum will be a means of raising ideas in achieving the development objective, which is to increase the welfare of all Indonesians.”

President Joko Widodo, Video Message, Indonesia Development Forum 2017

ii “In dealing with increasingly complex inequality issues, the ‘one size fits all’ approach is no longer relevant. There must be adjustments to approaches and programs. Development of policies, as well as evidence-based development programs, knowledge and quality research will help achieve the maximum impact of efforts taken to reduce inequality”

Minister of National Development Planning, Prof. Dr. Bambang P.S. Brodjonegoro, Opening Speech Indonesia Development Forum 2017

iii Contents

Contents...... ii Indonesia Development Forum In Numbers...... iv Indonesia Development Forum In Media...... v Executive Summary...... vi Foreword, Bappenas...... vii Preface, Dfat...... ix The

BrandIntroduction Identity...... 1 GuidelinesIndonesia Development Forum 2017 Agenda...... 5 Ideas And Innovation Marketplace Agenda...... 15 List Of Hosts...... 19 Creative visualization by

VISUALS SU Opening CODES Session, Prof. Bambang P.S. Brodjonegoro, Ph.D...... 24 We are an obsessed creative studio.

KASTUDIO www.suka.studio Video Message, President of the Republic of Indonesia, Joko Widodo...... 29 Keynote Address, Vice President of the Republic of Indonesia, Muhammad Jusuf Kalla...... 30 Keynote Address, Dr. Darmin Nasution...... 34 Welcoming Session, Dr. Bradley Armstrong...... 38 Public Lecture, Prof. Martin Ravallion...... 43 Video Streaming, Prof. Jeffrey Sachs...... 56

INSPIRE PLENARY: Inequality and Its Context...... 64 INSPIRE I: Ending the Vicious Cycle of Corruption and Inequality...... 70 INSPIRE II: The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality...... 76 INSPIRE III: The Future of Smallholder Farmers: Feeding the World and Sustainable Income...... 85 INSPIRE IV: Livable and Sustainable City for Growth and Social Equity...... 93 INSPIRE V: Look to the East: The Future of Indonesia...... 104 INSPIRE VI: Combating Poverty and Inequality through the Provision of Basic Services...... 109 INSPIRE VII: Inequality of Opportunities in Indonesia...... 116 INSPIRE VIII: Drivers and Policies to Address Multidimensional Inequalities...... 123 iv IMAGINE I: Social Security: Ways to Improve...... 130 IMAGINE II: Inequality in Its Context...... 139 IMAGINE III: Affirmative Policy on Fiscal and Investment to Reduce Income Inequality...... 146 IMAGINE IV: The Future of Smallholder Farmers: Feeding the World and Sustainable Income...... 152 IMAGINE V: Inequality Traps in Urban Dynamics...... 159 IMAGINE VI: Inclusive Economic Growth: How Should Indonesia Adapt?...... 166 IMAGINE VII: Ending the Vicious Cycle of Corruption & Inequality...... 172 IMAGINE VIII: Look to the East: The Future of Indonesia...... 178 IMAGINE PLENARY: Insights from the Ministers...... 184 IMAGINE IX: Technology and Inequality: Where Are We and Where We Will Be.. 189 IMAGINE X: The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality...... 197 INNOVATE I: The Role of Development Partners in Addressing Inequality...... 206 INNOVATE II: Affirmative Policy on Fiscal and Investment to Reduce Income Inequality...... 211 INNOVATE III: Combating Poverty and Inequality through the Provision of Basic Services...... 220 INNOVATE IV: Inequality and Its Context...... 228 INNOVATE V: Social Security: Ways to Improve...... 235 INNOVATE VI: Inclusive Economic Growth: How Should Indonesia Adapt to It?...... 240 IDEAS AND INNOVATION MARKETPLACE...... 249 Mini Stage A...... 250 Mini Stage B...... 255 Mini Stage C...... 258 Mini Stage D...... 261 Mini Stage E...... 264 Mini Stage F...... 270 ART, SCIENCE AND DEVELOPMENT, Eko Supriyanto...... 278 INNOVATE PLENARY: The Way Forward: How to develop a more equal Indonesia...... 285 CLOSING SESSION, Prof. Bambang P.S. Brodjonegoro, Ph.D...... 291 General Gallery ...... 294

v IDF in Numbers

44 37

Call for Papers Local Governments winners 13 Themes The Brand Identity Guidelines 14 Creative29 visualization by 555 VISUALS SU CODES We are an obsessed creative studio. Abstracts KASTUDIO www.suka.studio Sessions submitted of the Indonesian Ministers 152 Call for Papers and Former Ministers 629 57 Speakers Women Women 1.476 Participants 44 29 Ideas Presented at the Market Place Research Institute / University

156

Smart Practice 581 Videos Currated and Displayed Representative Participants from Ministries / Agencies

3400 36M Tweets No 1 PR Value 310 vi Media Items Trending Topic on August 9th in Indonesia IDF in Media Coverage

89 millions 58% Followers Women Tweeters No 1 3.400 Trending Topic on August 9th in 14 Indonesia Tweets articles Call for Papers

17 articles After the IDF

60 articles

Media 84 Roundtable articles 135 IDF 1st day articles IDF 2nd day

vii Executive Summary

he Indonesia Development Forum (IDF) is a national platform for Indonesian leaders in government, the brightest minds in development, and other key stakeholders to convene, Tcommunicate and collaborate in shaping Indonesia’s development agendas. It is a key initiative of Bappenas and its partners to encourage discussion on challenges and ideas for innovative solutions. The initial Indonesia Development Forum was held in Jakarta on 9-10 August 2017, attended Theby more than 1,500 participants from Indonesia and overseas, representing governments, the Brandbusiness Identity sector, research institutions, the education sector, civil society organisations, Guidelinesinternational development partners and the general public. It was designed as an interactive forum to provide optimal space for discussion, debate and dialogue for its members. The theme of the 2017 Indonesia Development Forum was, ‘Fighting Inequality for Better

Creative visualizationGrowth’. by Inequality is one of the greatest challenges facing Indonesia and one of the biggest

VISUALS SU threats CODES to social stability and stronger economic growth. With Indonesia’s ethnic and religious We are an obsessed creative studio.

KASTUDIO www.suka.studio diversity, different socioeconomic levels, and unequal distribution of population and natural resources, measures to reduce inequality should be included in economic and social policy frameworks. IDF 2017 involved 152 speakers, including 44 Call for Papers speakers, who conveyed to the forum their innovative ideas on how to address inequality in Indonesia. There were 29 discussion sessions covering 13 sub-themes: 1. Ending the Vicious Cycle of Corruption and Inequality 2. The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality 3. The Future of Smallholder Farmers: Feeding the World and Sustaining Income 4. Liveable and Sustainable Cities for Growth and Social Equity 5. Combating Poverty and Inequality through Provision of Basic Services 6. Social Security: Ways to Improve 7. Inequality and Its Context 8. Inclusive Economic Growth: How Should Indonesia Adapt to It? 9. Inequality of Opportunities/Drivers and Policies to Address Multi-dimensional Inequalities 10. Affirmative Fiscal and Investment Policy to Reduce Income Inequality 11. Look to the East: The Future of Indonesia 12. Technology and Inequality: Where Are We and Where Will We Be? 13. The Role of Development Partners in Addressing Inequality

The implementation of IDF 2017 was supported by the Australian Government through the Department of Foreign Affairs and Trade (DFAT) and the Knowledge Sector Initiative (KSI) (http:// www.ksi-indonesia.org/en/home). KSI is a collaborative program between the governments of Indonesia and Australia which contributes to inclusive and equitable growth in Indonesia through support for the use of quality research results in policymaking. viii Foreword, Bappenas

he first Indonesia Development Forum, entitled ‘Fighting Inequality for Better Growth’ was held in August 2017. It successfully generated new impetus to jointly collaborate to promote Tthe progress of Indonesia’s development. The forum, which was initiated to seek answers to development problems, involved the Ministry of National Development Planning, the Australian Department of Foreign Affairs and Trade and other stakeholders. Discussing the problem of inequality and poverty, the Vice President of the Republic of Indonesia, Jusuf Kalla, said there had been many policies implemented, although more time was The needed to address this challenge. This is reflected in the poverty rate, which has reducedIdentity by 5 Brand percent over the last seven years, along with an increase in the Gini Ratio in 2014. Guidelines Indonesia’s current top priority is to design effective policies to reduce poverty and inequality. As confirmed by the President of the Republic of Indonesia, Joko Widodo, development is very important to reduce inequality and improve people’s lives, where the key factor that determines Creative visualization by visualization Creative success is the involvement of all people in the development process. VISUALS CODES SU We are an obsessed obsessed an are We creative studio. studio. creative One exciting achievement of the 2017 Indonesia Development Forum was the high level ofwww.suka.studio O STUDI KA participation, with the involvement of over 1,500 participants. The forum was a medium for 152 speakers from around the world to actively share success stories, lessons learned, ideas and innovations in overcoming inequality problems, as well as other development issues. INSPIRE, IMAGINE and INNOVATE were the three pillars that formed the foundation of the entire forum, and each pillar had a special session involving experts and speakers from various backgrounds. Of the dialogue and discussions held within IDF 2017, there were 29 sessions and 13 sub- themes. To identify the more real problems and draw inspiration for solutions and ideas that have been successfully implemented, this forum facilitated potential and prominent change makers from Indonesia and abroad. In one INSPIRE session, for example, the founder of a loan service with a liability scheme talked about the impact of developing a psychometric approach and credit rating technology to reach a community that was not yet bankable and provided with financial services. The experience demonstrated how a social company can contribute to reducing income inequality through increasing poor people’s access to financial services. In IMAGINE sessions, local, national and international researchers, academics, experts, practitioners and officials presented their research and innovations in an interactive discussion about how to create a more inclusive, advanced, equitable and sustainable Indonesia in the future. In INNOVATE sessions, the speakers encouraged participants to focus on actions aimed at realising a shared vision of strategic innovation as well as breakthrough efforts to address inequality. The Indonesia Development Forum 2017 also provided an Idea and Innovation Marketplace as a platform for innovators to deliver ideas, innovations or smart practices, and invite input from and collaborate with participants. One success of IDF 2017 was the establishment of this forum as a medium to accommodate greater, better and more impactful initiatives, constituting an annual platform for government

ix agencies, the private sector, academia and Indonesian society in general to collaborate on the national development agenda and address the challenges that go with it. Given the importance of a comprehensive dialogue and discussion process, as well as the results achieved in the two-day forum, we have attempted to compile this proceeding as well as possible, with the hope that it will constitute documentation that serves as a reference for anyone to understand the current state of inequality in Indonesia and the efforts made to overcome it. The success of the Indonesia Development Forum 2017 was very much related to the involvement of many parties to whom we were very grateful. They included researchers, government representatives, development partners, civil society organisations and academics who were willing to contribute and play an important role in achieving the desired results. A statement from the closing speech of the Minister of National Development Planning, Prof. Dr. Bambang P.S. Brodjonegoro, sums up the Indonesia Development Forum 2017: “Let us remind ourselves that although the government is responsible for reducing inequality, it cannot do it on its own. It takes support and collaboration from all parties to solve and find solutions to the poverty problems.”

Ms. Rahma Iryanti Expert Staff for Social Affairs and Poverty Reduction / as Chief Executive of the Indonesia Development Forum 2017 Ministry of National Development Planning / Development Planning Agency

x Preface, DFAT

ustralia is proud to have supported the Indonesian National Development Planning Agency (Bappenas) in hosting the inaugural Indonesia Development Forum. The theme Aof fighting inequality for better growth clearly resonated with a broad range of stakeholders in Indonesia, with strong participation from government, the private sector and civil society in this highly successful and well-reported event. The We were particularly pleased to be able to contribute to the success of the event through our Knowledge Sector Initiative (KSI) program. KSI is a partnership between the governmentsIdentity of Brand Indonesia and Australia which supports more inclusive and equitable growth through high-quality Guidelines public policy grounded in rigorous research, analysis and evidence. We are proud that the Indonesia Development Forum program included contributions from a number of well-regarded Australian experts, as well as insightful presentations from sevenby visualization Creative VISUALS CODES SU We are an obsessed obsessed an are We Indonesians undertaking postgraduate studies in Australia (supported by Australia Awards studio. creative www.suka.studio O STUDI KA Indonesia). We were also pleased to have the opportunity to share lessons from innovative Australian-supported development programs. These Proceedings capture the wealth of information and policy recommendations disseminated and discussed at the forum: from international and local researchers, government representatives and civil society organisations. There was a consensus amongst speakers at the forum that high levels of inequality and persistent development challenges pose a risk to Indonesia’s continued growth. To tackle these challenges, Indonesia needs to grow its taxation revenue base, invest in infrastructure and connectivity, stimulate business investment and trade, and strengthen service delivery and social protection, particularly in remote areas. It will also be important to increase economic opportunities for women, including through addressing Indonesia’s current low levels of female labour force participation. We look forward to the Indonesia Development Forum becoming an annual opportunity to share lessons and evidence on policy responses to Indonesia’s key development challenges.

Ms. Fleur Davies Minister-Counsellor Australian Embassy Indonesia

xi Organizing Committee

xii xiii

Introduction

The Indonesia Development Forum – Inclusive Growth for a Better Indonesia

The Brand Identity Brand Guidelines Guidelines

he Indonesia Development Forum (IDF) is a national platform for Indonesian leaders in government, the brightest mindsby visualization in Creative VISUALS CODES SU We are an obsessed obsessed an are We development, and other key stakeholders to convene, communicate studio. creative T www.suka.studio O STUDI KA and collaborate in shaping Indonesia’s development agendas. It is a key initiative by Bappenas and its partners to encourage discussion on challenges and ideas for innovative solutions. The IDF has three pillars: Inspire, Be INSPIRED by best practices Imagine and Innovate, where in addressing the country’s most inspiration is gained from successes in daunting development problems strengthening evidence-based policy making, space is provided to imagine the future of Indonesia, and promote IMAGINE a more inclusive, innovations in development for a progressive and sustainable stronger, more sustainable, more Indonesia inclusive Indonesia. INNOVATE to create As a communication platform, IDF breakthroughs that would allows for a variety of emerging policy achieve the Indonesia you research inputs to be presented and imagine disseminated across a broad range of stakeholders. It also features best practices, challenges and lessons learned of development actors in Indonesia, from the grassroots to the national level, as well as international experiences relevant to the context of Indonesia. As a collaboration and convergence platform, IDF brings together key development stakeholders in a two-day international conference held annually at the commencement of Indonesia’s planning and budgeting cycle and encourages direct collaboration between knowledge producers

1 and policy makers. Addressing the challenge, however, is not The Indonesia Development Forum is not a the exclusive responsibility of the government. one-off: The 2017 inaugural forum is the start Nor is it a case of ‘one size fits all’. While the of a long-term annual platform for Indonesian government can set policy, it must also work leaders in government, the private sector, together with all other stakeholders and the academia and other members of society to public to ensure that its programs to fight collaborate to shape Indonesia’s development inequality have the maximum impact. agendas. IDF aims to: The Indonesia Development Forum is a •• Convene development actors in the public, powerful catalyst to make this happen. private and non-profit sectors around a Indonesia is a complex and diverse country forward-looking development agenda with many ethnic groups, religions and socio- • • Communicate evidence for policies that economic levels. The Indonesia Development support inclusive growth Forum can draw upon the diverse knowledge, • • Promote collaboration among disparate insights and experiences of all relevant and interests and perspectives across multiple interested stakeholders. By doing so, it can levels of government, civil society, the turn this diversity into a tremendous asset for academia and the private sector. national development.

Supported by the Knowledge Sector Indonesia Development Forum 2017 Initiative (http://www.ksi-indonesia.org/en/ On 9-10 August 2017, the inaugural home), a joint program between the Indonesia Development Forum with national governments of Indonesia and Australia, the and international participation was successfully Forum comes at a crucial time when Southeast convened at the Gama Tower in Jakarta. The Asia’s largest economy is transitioning away Vice President of Indonesia, Jusuf Kalla, from a commodity-based and low-end officially opened the forum, saying efforts must manufacturing economy. Without strong be increased to reduce poverty and inequality. inclusive policies, this transition risks “This is why we have to work hard to increase exacerbating inequality, leaving more and productivity, which will result in improvements more Indonesians behind. in Indonesia,” the Vice President said. In an opening video, President Joko Widodo Fighting Inequality for Better Growth stated that reducing inequality was a top The theme of the 2017 Indonesia priority for the government. “Essentially, Development Forum was ‘Fighting Inequality development should aim to reduce inequality for Better Growth’. Inequality is one of the and increase people’s standard of living. greatest challenges facing Indonesia and one People’s participation and engagement is the of the biggest threats to social stability and key for successful development.” stronger economic growth. Measures to The Minister of Bappenas/National reduce inequality ideally should be part of a Development Planning, Prof. Dr Bambang wider economic and social policy framework. Brodjonegoro, also addressed the importance President Joko Widodo has announced that of multi-stakeholder collaboration to fight narrowing the wealth inequality gap is one of inequality. “We need participation from outside the top priorities of his government. Bappenas, the government. Inequality is not only an issue as the ministry in charge of national for government. Of course the government is development, is leading efforts to achieve the responsible for reducing inequality but the goal set by the president.

2 government cannot do it alone. The 7. Inequality and its Context government needs support and we need to 8. Inclusive Economic Growth: How Should collaborate. … At the end of the day we know Indonesia Adapt to It? that everybody must help each other in order 9. Inequality of Opportunities/Drivers and to reduce inequality.” Policies to Address Multi-dimensional Designed to Inspire, Imagine and Innovate, Inequalities the IDF invited a number of high-level national 10. Affirmative Fiscal and Investment Policy to and international speakers including: the Reduce Income Inequality Coordinating Minister of Economic Affairs, Dr 11. Look to the East: The Future of Indonesia Darmin Nasution; the Minister of Public Works 12. Technology and Inequality: Where Are We and Public Housing, Basuki Hadimuljono; the and Where Will We Be? Minister of Health, Nila Djuwita F Moeloek; the 13. The Role of Development Partners in Minister of Women’s Empowerment and Child Addressing Inequality Protection, Yohana Yembise; the Minister of Finance and National Planning of Tonga, The Indonesia Development Forum is about Tevita Lavemaau; the Minister of Agriculture of sharing the best wisdom of the actors involved the Republic of Fiji, Inia Batikoto Seruiratu, in the development and knowledge sector in Prof. Martin Ravallion, Georgetown University, Indonesia and bringing in international and Prof. Jeffrey Sachs, Columbia University. experience. The conference is designed to be Governors, mayors and bupatis, academics interactive and permit maximum opportunity and researchers, development practitioners for discussion, debate and dialogue. Keynote and civil society leaders also shared their presentations took place in plenary and perspectives and experiences. Over the two smaller sessions that ran parallel, including days, 152 speakers including 44 development panel presentations followed by group innovators selected competitively from 555 discussions on questions relevant to each submitted papers provided ground-breaking sub-theme. A number of different ideas on how to address Indonesia’s inequality methodologies and room layouts were used to problems. The Forum provided networking facilitate exchanges between participants: and pitching opportunities for development 1. Plenary Session. This featured selected innovators in a special session, the Ideas and inspiring speakers able to speak with Innovations Marketplace. authority on the theme that had been The 29 sessions covered 13 sub-themes: assigned to them. Speakers in this session 1. Ending the Vicious Cycle of Corruption included inspirational leaders and change- and Inequality makers in government, civil society (from 2. The Impact of Financial Inclusion and international to national) and from the Social Entrepreneurship on Income grass roots. Inequality 2. Semi-Plenary Discussion/Conventional 3. The Future of Smallholder Farmers: Theatre. The host opened the floor to Feeding the World and Sustaining Income questions and answers for 20 minutes. 4. Liveable and Sustainable City for Growth Each participant was asked to answer on a and Social Equity card: From the speakers’ presentations, 5. Combating Poverty and Inequality through what was interesting or relevant for the Provision of Basic Services Indonesian context? Participants were 6. Social Security: Ways to Improve asked to discuss their answers with other

3 participants. The host invited selected table were invited to share what was participants for feedback. interesting from their discussion with the 3. Fishbowl Discussion. After speakers larger group. The host provided an presented for 10 minutes, the host invited opportunity for the speakers to give quick participants to sit on chair to ask a brief responses and a closing statement. question or make a comment. Speakers 6. The Ideas and Innovation Marketplace could answer, respond or discuss the was a creative set up of stalls and booths questions and comments made by the where owners and visitors could interact in participants. Questions and comments an open and easily accessible area. After were only allowed in one-minute segments each speaker pitched their idea or per participant. innovation, they were given the opportunity 4. Conversation Cafe Discussion. After to engage with potential ‘buyers’. Each speakers had presented for 10 minutes, ‘buyer’ had to write their interest in the host invited participants to discuss: collaboration on Transaction Cards that From the speakers’ presentations, what were handed to the relevant speaker. Each was interesting or relevant for the speaker gave the Transaction Cards Indonesian context? Participants received to the facilitators so they could be discussed with each other at the available counted. tables or got up and looked for other participants to talk with while standing. The proceedings will present the main 5. World Café. After speakers had presented takeaways from these sessions. This is based for five to 10 minutes, the host invited on notes prepared by rapporteurs in each of participants to think about what was the five rooms. Graphic recordings and photos interesting or relevant for the Indonesian provide some of the context and atmosphere. context. Participants wrote and drew their Links are provided to the 123 presentations responses on paper tablecloths at each that were made available (http://www. table. They were given one to two minutes indonesiadevelopmentforum.com/ page/ to respond. Representatives from each media).

4 INDONESIA DEVELOPMENT FORUM 2017 AGENDA 9-10 August 2017

Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue 07.00- Registration 08.30 The OPENING (INVITATION ONLY) Identity Brand Welcoming Art-Rampai Aceh Traditional Dance Guidelines Video presentation “Fighting Inequality for Better Growth” Creative visualization by visualization Creative

VISUALS Prof. Bambang P.S. Brodjonegoro, CODES SU We are an obsessed obsessed an are We creative studio. studio. creative 08.30- www.suka.studio O STUDI KA Minister for National Development 09.30 Welcoming Java Planning and Head of National Conventional Remarks Ballroom Development Planning Agency of the Republic of Indonesia H.E. Muhammad Jusuf Kalla, Opening Vice President of the Republic of Remarks Indonesia Dr Darmin Nasution, Coordinating Keynote Minister for Economic Affairs, Address Republic of Indonesia Conventional Dr Bradley Armstrong, Charge Welcoming d’Affaires, Australian Embassy in Remarks 09.30- Indonesia Java 10.40 PUBLIC Ballroom LECTURE: Prof. Martin Ravallion, Georgetown Measures and TEDTalk-style Policies for University Fighting Poverty and Inequality 10.40- Video Prof. Jeffrey Sachs, Columbia Java Skype Video 11.00 Presentation University Ballroom

5 Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue Prof. Bambang P.S. Brodjonegoro, Ph.D, Minister for National Development Planning and Head of National Development Planning Agency of the Republic of Indonesia

INSPIRE Chris Tinning, Chief Economist- 10.40- PLENARY Development, Department of Java TEDTalk-style 12.00 Inequality and Its Foreign Affairs and Trade, Australia Ballroom Context Hon. Tevita Lavemaau, Minister of Finance and National Planning of Tonga Prof. Mari Elka Pangestu, Board of Trustees, Centre for Strategic and International Studies (CSIS) Jakarta 12.00- LUNCH 13.00 Agus Rahardjo, Chairman of Corruption Eradication Commission (KPK), Republic of Indonesia Inspire I: Sri Wahyuningsih, Saber Pungli Task Force, Republic of Indonesia TEDTalk- Ending the Java style with Vicious Cycle of Sutarmidji, Mayor of Pontianak, Ballroom Corruption and West Kalimantan discussion Inequality Zeger Van Der Wal, Lee Kuan Yew School of Public Policy and 13.00- Asian Research Institute, National 14.30 University of Singapore Prof. Johannes Lindner, Teachers Inspire II: College of Krems, Vienna, Austria Tristan Ace, British Council The Impact of Financial Inclusion Andi Taufan Garuda Putra, Padang World Café and Social Founder of Amartha Room Entrepreneurship Hoonae Kim, Asian Pacific on Income Regional Director, International Inequality Fund for Agriculture Development (IFAD)

6 Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue Nuraeni, “Fatimah Az Zahra” Fisherwomen Community Group, Paotere Village, South Sulawesi Inspire III: H. Andi Fahsar Mandin Pandjalangi, Regent of Bone, The Future of South Sulawesi Smallholder Medan Fish Bowl Farmers: Feeding Tomy Perdana, Senior Lecturer, Room the World and Padjajaran University, Bandung Sustainable Mohasin Kabir, Head of Portfolio Income Promoting Rural Income through Supports for Market in Agriculture 13.00- (PRISMA), Australian-Indonesia 14.30 Partnership for Rural Development Prof. Mike Douglass, Asian Research Institute, National University of Singapore Inspire IV: Oswar Muadzin Mungkasa, Deputy Governor of Jakarta on Spatial and Livable and Environment Affairs Conversation Retreat Sustainable City Café Lounge for Growth and Wicaksono Sarosa, Chairperson of Social Equity the Executive Board, Kemitraan- Habitat Paulista Bunga Surjadi, Kota Kita Foundation TEDTalk- Frans Lebu Raya, Governor of East Java style with Nusa Tenggara Ballroom Inspire V: discussion 14.45- Look to the East: Hermien Kleden, Executive Board 16.15 The Future of TEMPO Media Group Indonesia Noldy Tuerah, Eastern Indonesia Researchers Network (JiKTI) Margareth Grosh, Lead Economist Inspire VI: for Human Development, World Combating Poverty Bank 14.45- and Inequality Conversation Retreat Prof. M Niaz Asadullah, University 16.15 through the Café Lounge of Malaya, Malaysia Provision of Basic Services Candice Vianna, The Embassy of Brazil

7 Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue Ermina Sokou, Social Affairs Officer, UNESCAP Arief Anshory Yusuf, Executive Director, Center for Sustainable Development Goals Studies, University of Padjajaran Inspire VII: Sharon Bessell, Director of 14.45- Inequality of Padang Research, Crawford School of World Café 16.15 Opportunities in Room Public Policy, Australia National Indonesia University Anna Margret Lumban Gaol, Senior Lecturer, Department of Political Science, University of Indonesia Firman Witoelar, Director of Research, SurveyMETER Amanda Robbins, Australia Indonesia Partnership for Economic Governance (AIPEG) Inspire VIII: Phillip O’Keefe, Regional Lead Economist for Social Protection Panel Discussion and Labour Global Practice, World 16.30- on the Drivers and Padang Bank World Café 18.00 Policies to Address Room Multidimensional Nguyen Thi Lan Huong, Institute of Inequalities Labour, Science and Social Affairs, Vietnam Prof. M Niaz Asadullah, University of Malaya, Malaysia Winda Yunita, Reckitt Benckiser Alexander Anggono, Trunojoyo 13.00- Imagine I: University, Madura Conventional Yogyakarta 14.10 Clara Siagian, University of theatre Room Social Security: Indonesia Ways to Improve Steven Koerniawan, World Vision

8 Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue Agung Mahesa Himawan Darodjatoen, The University of Western Australia Ilmiawan Auwalin, Airlangga Imagine II: 14.40- University Medan Inequality in Its Fish Bowl 15.50 Room Context Dewi Sukma Anggriyani, Institute for Economic and Social Research (LPEM), University of Indonesia Mubariq Ahmad, Conservation Strategy Fund Mardhiah, University of Canberra, Australia Imagine III: Matondang Elsa Siburian, Waseda Affirmative Policy University, Japan 14.20- on Fiscal and Conventional Yogyakarta 15.30 Investment to Ichsan Zulkarnaen, National theatre Room Reduce Income Development Planning Agency of Inequality the Republic of Indonesia Asri Yusrina, SMERU Research Institute Sapta Putra Ginting, Ministy of Imagine IV: Marine Affairs and Fisheries The Future of Agus Mulyono, PT Japfa Comfeed 16.00- Smallholder Indonesia Tbk Medan Farmers: Feeding Fish Bowl 17.10 Andy Hall, Commonwealth Room the World and Scientific and Industrial Research Sustainable Organisation, Australia Income Sharon Suri, World Fish, Malaysia Mahdaleny, East Kalimantan Provincial Government Febrianto Wibowo, University of Gadjah Mada Imagine V: 16.00- Indrawan Prabaharyaka, Conversation Retreat Inequality Traps in 17.10 Technische Universitat Munchen, Café Lounge Urban Dynamics Germany Luthfi Muhammad Iqbal, National Development Planning Agency of the Republic of Indonesia

9 Day 1, Wednesday, 9 August 2017

Time Program Resource Person Format Venue Agnes Vera Yanti Sitorus, Central Bureau of Statistics (BPS) Imagine VI: Nugraha Pukuh, Central Bureau of 15.40- Inclusive Economic Statistics (BPS) Conventional Yogyakarta Growth: How 16.50 Teguh Dartanto, University of theatre Room Should Indonesia Indonesia Adapt to it Palupi Anggraeni, Griffith University, Australia Tengku Munawar Chalil, Osaka University, Japan Imagine VII: Abraham Wirotomo, Executive 17.20- Ending the Vicious Office of the President (KSP) Conventional Yogyakarta 18.30 Cycle of Corruption theatre Room Glenn Maail, Web Foundation & Inequality Noor Syaifudin, University of Western Sydney, Australia Nuzula Anggeraini, Regional Development Board of West Southeast Maluku Regency Imagine VIII: Angreine Kewo, Denmark Technical 17.20- University Medan Look to the East: Fish Bowl 18.30 The Future of Sri Rezeki Widuri, The University of Room Indonesia New South Wales, Australia Rambu Luba Kata Respati, Wira Wacana Christian University Sumba 18:30- Gala Dinner Registration 19:00 Brief remarks: Prof. Bambang P.S. Brodjonegoro, Minister for GALA DINNER 19:00- National Development Planning Banquet-Set Java (INVITATION 21:00 and Head of National Development Menu Ballroom ONLY) Planning Agency of the Republic of Indonesia

10 Day 2, Thursday, 10 August 2017

Time Program Resource Person Format Venue 07.00- Registration 09.00 Dr Basuki Hadimuljono, Minister of Public Works and Public Housing, Republic of Indonesia IMAGINE Prof. Nila Djuwita F. Moeloek, 09.00- PLENARY: Java Minister of Health, Republic of Talk Show 10.30 Insights from the Ballroom Indonesia Ministers Prof. Yohana Yembise, Minister of Women’s Empowerment and Child Protection Sarah Hobgen, Charles Darwin University, Australia Imagine IX: Diastika Rahwidiati, PulseLAB 10.00- Technology and Jakarta Conventional Yogyakarta 11.10 Inequality: Where theatre Room Are We and Where Indriaswati Dyah S, UNSW Law We Will Be School, Australia Sumekar Tanjung, Indonesia Islamic University David Soukhasing, Angel Investment Network Indonesia Imagine X: (ANGIN) United Nations Development Programme (UNDP) The Impact of Aluisius Hery Pratono, Surabaya 11.20- Financial Inclusion Conventional Yogyakarta University 12.30 and Social theatre Room Entrepreneurship on Nika Pranata, Indonesian Institute Income Inequality of Sciences (LIPI) Ubaidillah Nugraha, University of Indonesia

11 Day 2, Thursday, 10 August 2017

Time Program Resource Person Format Venue Chris Tinning, Chief Economist- Development, Department of Foreign Affairs and Trade, Australia Perin Saint Ange, Associate Vice President, International Fund for Innovate I: Agriculture Development (IFAD) The Role of Rolande Simone Pryce, Operations 11.00- Java Ball- Development Manager Indonesia and Timor Talk Show 12.15 room Partners in Leste, The World Bank Addressing Inequality Winfred F. Wicklein, Country Director - Indonesia, Asian Development Bank Ibrahim Ali Shoukry, Resident Representative, IDB-CGO Indonesia Yustinus Prastowo, Executive Director of Center for Indonesia Taxation Analysis (CITA) Edimon Ginting, Director of Economic Analysis and Innovate II: Operational Support Division, Asian Affirmative Policy Development Bank 11.00- on Fiscal and Padang World Café 12.30 Investment to Anggito Abimanyu, Member of Room Reduce Income Badan Pelaksana Pengelola Inequality Keuangan Haji Anton Hermanto Gunawan, Executive Director, Mandiri Institute Tung Desem Waringin, Expert on Marketing and Investment

12 Day 2, Thursday, 10 August 2017

Time Program Resource Person Format Venue Prof. Rema Hanna, Scientific Di- rector, Abdul Latif Jameel Poverty Action Lab (J-PAL) Southeast Asian Innovate III: Com- Sherria Ayuandini, University of bating Poverty and 11.00- Amsterdam Medan Inequality through Fish Bowl 12.30 Room the Provision of Santoso, Article 33 Basic Services Annisa Sabrina Hartoto, University of Melbourne, Australia Diandra Pratami, World Food Pro- gramme Prof. Armida Alisjahbana, Faculty of Economy and Business, Padja- jaran University, Bandung Innovate IV: 11.00- Endi Jaweng, Director, Regional Conversation Retreat 12.30 Inequality and Its Autonomy Watch (KPPOD) Café Lounge Context Alessandra Heinemann, Social Protection Programme Manager, OECD Development Center 12.30- LUNCH 13.30 13.30- IDEAS AND INNOVATION MARKET PLACE 15.00 Prof. Rema Hanna, Scientific Di- rector, Abdul Latif Jameel Poverty Action Lab (J-PAL) Southeast Asia Phillip O’Keefe, Regional Lead Economist for Social Protection and Labour Global Practice, World Innovate V: Bank TEDTalk-style 13.30- Java Ball- with discus- 15.00 Social Security: Nguyen Thi Lan Huong, Institute of room Ways to Improve Labour, Science and Social Affairs, sion Vietnam Bambang Widianto, Deputy for Human Development and Equality/ Executive Secretary of TNP2K, Of- fice of the Vice President, Republic of Indonesia

13 Day 2, Thursday, 10 August 2017

Time Program Resource Person Format Venue Steven Tabor, Economist Riatu Mariatul Qibthiyyah, Head of Institute of Economy and Social Innovate VI: Research/LPEM, University of Inclusive Econom- Indonesia 13:30- Padang ic Growth: How World Café 15:00 Adoracion M Navarro, Undersec- Room Should Indonesia retary for Regional Development Adapt It? NEDA Jesus Felipe, Economic and Re- search Department, Asian Devel- opment Bank 15:15- Art, Science and Java Ball- Eko Supriyanto, Cry Jailolo TEDTalk-style 15:45 Development room Prof. Bambang P.S. Brodjonegoro, Minister for National Development Planning and Head of National INNOVATE PLENA- Development Planning Agency of RY: the Republic of Indonesia 15:45- Java Ball- The Way Forward: Inia Batikot Seruiratu, Minister of Talk Show 16:45 How to develop a Agriculture, The Republic of Fiji room more equal Indo- Prof. Martin Ravallion, Georgetown nesia University H. Sugianto Sabran, Governor of Central Kalimantan Prof. Bambang P.S. Brodjonegoro, Minister for National Development 16:45- Java Ball- Closing Planning and Head of National 17:00 room Development Planning Agency of the Republic of Indonesia

14 SCHEDULE, IDEAS AND INNOVATION MARKETPLACE

MINI STAGE SCHEDULE | Wednesday, 10 August 2017 MINI STAGE A

TIME SLOT ORGANISATION/TOPIC/SPEAKER The 13.30 – 13.45 Co-Designing Local Solutions for a Stronger Education SectorIdentity in Brand Indonesia Guidelines Cici Wanita, Teaching and Learning Officer, INOVASI Program 13.45 – 14.00 Turnback of Democracy and Local Economy Creative visualization by visualization Creative

Sunaji Zamroni, Director of Institute for Research and Empowerment VISUALS (IRE), CODES SU We are an obsessed obsessed an are We creative studio. studio. creative Yogyakarta www.suka.studio O STUDI KA 14.00 – 14.15 Economic Intermediation to Reduce Poverty and Inequality Acep Muslim, AKATIGA Researcher, Bandung 14.15 – 14.30 Nyambu Ecotourism I Wayan Gede Eka Sudiartha, Director of Nyambu Ecotourism Village 14.30 – 14.45 Bali Export Development Organisation: Together We Can Make a Difference Jeff Kristianto, BEDO 14.45 – 15.00 Business and Human Rights Kania Mezariani, ELSAM Researcher

15 MINI STAGE B

TIME SLOT ORGANISATION/TOPIC/SPEAKER 13.30 – 13.35 Budget Data Transparency Betta Anugrah Setiani, Researcher of FITRA National Secretariat, Jakarta 13.45 – 14.00 Empowerment 2.0: The Social Media Role for Rural Development in Indonesia Karlina Octaviany, Indonesia Voice of Woman 14.00 – 14.15 Clan-based Water Conservation in Village Spatial Planning Torry Kuswardono, Director of PIKUL, NTT 14.15 – 14.30 Local Economic Governance to Address Inequality Budi Reza, Researcher of the Monitoring Committee on the Implementation of Regional Autonomy (KPPOD), Jakarta 14.30 – 14.45 Oelbinose: The Forgotten Brothers Jeffri Yosep Simanjorang, Selingkar 14.45 – 15.00 Toward a Disaster Resilient Jakarta: Lesson From Jatinegara and Rawa Buaya Sub Districts Yohana Ratrin Hestyanti, Atma Jaya Catholic University

MINI STAGE C

TIME SLOT ORGANIZATION/TOPIC/SPEAKER 13:30 – 13:35 Yayasan Cinta Anak Bangsa (YCAB) Susli Lie, Head of Investments YCAB Ventures 13:45 – 14:00 Latrine Access in Indonesia: A Story from Dodaek Village Helga J. N. Ndun, Universitas Nusa Cendana 14:00 – 14:15 Addressing Inequality in Local Government Iqbal Damanik, Researcher of Artikel 33, Jakarta 14:15 – 14:30 Development Integrated Service and Refferal System in the Fulfillment of Basic Needs for The Poor Raditia Wahyu Supriyanto 14:30 – 14:45 Data Revolution: Data Strengthening for Community Based SDG Monitoring Siti Fatimah, Researcher of BIGS, Bandung 14:45 – 15:00 Integrated Village Schools Based on Local Wisdom Yohanes Rahail, Institut Pengembangan dan Pemberdayaan Masyarakat (IPPM)

16 MINI STAGE D

TIME SLOT ORGANISATION/TOPIC/SPEAKER 13.30 – 13.35 Solution to Realise Disability Inclusive Development Hastuti, Researcher of SEMERU Jakarta 13.45 – 14.00 Survey by the Community: Participatory Planning to Tackle Inequality Fariz Panghegar, Researcher of Cakra Wikara Indonesia (CWI) Jakarta 14.00 – 14.15 The Dynamics of Local Politics and Inequality Noory Okthariza, Researcher of Center For Strategic and International Studies (CSIS) Jakarta 14.15 – 14.30 Realising Independence for Persons with Disability I Nengah Latra, PUSPADI Bali 14.30 – 14.45 Move Together With Pelanusa for a Better Life Endahing Noor Suryanti, CEO of Pelangi Nusantara Foundation (Pelanusa) 14.45 – 15.00 Teaching about the Basic of Saving to Make Incomes Last Longer Gary Seah, Mentor Foundation

MINI STAGE E TIME SLOT ORGANISATION/TOPIC/SPEAKER 12.30 – 12.45 British Council’s Programs to Support Social Enterprises in Indonesia Teresa Birks, Director Education and Society British Council Indonesia 12.45 – 13.00 Re-inventing Micro-payments: ‘Financial Technology’ in ‘Microfinance’ as an Inclusive Financial Strategy Aria Widyanto, Vice President Amartha Fintek 13.00 – 13.15 IKKON Program Poppy Savitri, Director of Creative Economy Education, Creative Economy Board 13.15 – 13.30 Inclusive Sustainable Economic Development Lisa Peterskovsky, GIZ-ISED Program 13.30 – 13.35 The Portrait of Rural Areas and Agrarian in Indonesia Ihsan Maulana, Researcher of Sajogyo Institute Bogor 13.45 – 14.00 Baraka Nusantara Siti Maryam Rodja, Founder of Baraka Nusantara 14.00 – 14.15 Participatory Parliament Recess Andy Nurhanjayani, DPRD Parepare, MAMPU Program 14.15 – 14.30 Boosting Nation’s Productivity through Sanitation Development Aldi Mardikanto, BAPPENAS

17 14.30 – 14.45 Disabled-Friendly Public Service: Building Inclusive City Initiative Nurul Saadah, Director of Center for Advocacy for Women, Diffabel and Children, AIPJ2 Program 14.45 – 15.00 Village School Household Industry Center ‘Jagorawi’ (Authentic Javanese Jamu Gendong) as the Mobiliser of Women Entrepreneurs in Wonorejo Village, Karanganyar) Rais Nur Latifah, Bandung Institute of Technology

MINI STAGE F

TIME SLOT ORGANISATION/TOPIC/SPEAKER 12.30 – 12.45 Better Understanding of TransJakarta Passengers’ Travel Behaviours Using Data Analysis Yulistina Riyadi, Research Associate Pulse Lab Jakarta 12.45 – 13.00 The Mutualism Between Technology and The Blind: Mass Audiobook Veronica Christamia Juniarmi, BRAILLE’IANT Indonesia 13.00 – 13.15 SAINS 45: Indonesian Science Agenda Toward the Centennial Anniversary of Indonesian Independence Teguh Dartanto, KSI-ALMI 13.15 – 13.30 New Era of Social Entrepreneurship in Healthcare Gamal Albinsaid, CEO of Indonesia Medika 13.30 – 13.35 Sub-National Poverty Assessment (SNAPA) Bambang Suharmoko Sjahrir, The Poverty & Equity Team of the World Bank 13.45 – 14.00 Neighbourhood Upgrading and Shelter Project Siti Hasanah, Senior Project Officer for Urban Development, Asian Development Bank (ADB) 14.00 – 14.15 Code Margonda: Depok Can Be the Centre for Tech Developers in Indonesia, Making Impact on a Global Level Didi Diarsa, Co-Founder Code Margonda 14.15 – 14.30 Inequality in Asia and the Pacific Ermina Sokou, Social Affairs Officer, United Nation ESCAP (UNESCAP) 14.30 – 14.45 Strengthening Agricultural Finance In Rural Areas Lynley Mannell, Team Leader of SAFIRA Program 14.45 – 15.00 A Smart Practice for Indonesia Yusran Laitupa, Director of BaKTI Makassar

18 LIST OF HOSTS

NO NAME INSTITUTION

Alfito Deannova CNN Indonesia Amich Alhumami Director of Higher Education, Science and Technology, and Culture of the National Planning and Development Agency (Bappenas) Bustanul Arifin Universitas Lampung Dinna Wisnu Indonesian Representative, ASEAN Inter-Governmental Commission of Human Rights Dominicus Savio Priyarsono Bogor Institute of Agriculture Elan Satriawan National Team for Acceleration of Poverty Eradication (TNP2K) Evi Nurvidya Arifin Centre for Aging Studies, Universitas Indonesia Irene Muliati Senior Social Protection Specialist, World Bank, Jakarta Isono Sadoko Centre for Social Analysis, AKATIGA Ivan A. Sandjaja Universitas Ciputra Lukita Dinarsyah Tuwo Secretary to the Coordinating Ministry for Economic Affairs Muhammad Ikhsan LPEM, Universitas Indonesia Nina Sardjunani SDG Secretariat, Bappenas Suhariyanto Indonesian Central Bureau of Statistics (BPS) Sudarno Sumarto National Team for Acceleration of Poverty Eradication (TNP2K) Taufik Hanafi Expert Staff to the Minister of National Planning and Development for Equity and Regional Development Tony Prasetiantono Universitas Gadjah Mada Vivi Alatas Lead Economist, World Bank, Jakarta Vivi Yulaswati Director of Poverty Eradication and Social Welfare, Min- istry of National Planning and Development (Bappenas) Yanuar Nugroho Deputy of Research and Priority Program Management, Office of Presidential Staff Yoga Affandi Bank of Indonesia

19 Java Ballroom Inequality and Its Context Java Ballroom Ending the Vicious Padang Room Cycle of Corruption and Inequality The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality Medan Room The Future of Smallholder Farmers: Feeding the World and DAY 1 Sustainable Income

stands on three pillars: INSPIRE, IMAGINE, and INNOVATE. INSPIRE: Story of changes and Imagine 8 Inn Fiscal and Investment Inspire 5 Padang Room o to Reduce Income va best-practices that inspire Indonesia to ght inequality. IMAGINE: Imagining the future Java Ballroom t e Inequality Look to the East: The 2 of more inclusive, equal, sustainable, and advanced Indonesia. INNOVATE: Presenting Insights from the Future of Indonesia Y Retreat Lounge R I Ministers A n Padang Room strategic and breaking through innovations in addressing inequality issues. N n E o Inspire 6 Combating Poverty L FIGHTING v Combating Poverty P a and Inequality

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20 Java Ballroom Inequality and Its Context Java Ballroom Ending the Vicious Padang Room Cycle of Corruption and Inequality The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality Medan Room The Future of Smallholder Farmers: Feeding the World and DAY 1 Sustainable Income

INSPIRE 9 August 2017 PLENARY Inspire Inspire 1 Retreat Lounge Livable and Sustainable Inspire 2 City for Growth and Social Equity The Indonesia Development Forum (IDF) is a platform for Indonesian leaders in Java Ballroom Inspire 3 government, private sector, academia, and other members of society to collaborate to shape Indonesia's development agendas. This platform is initiated by Bappenas. The Role of Development Partners in Addressing DAY 2 Inequality Inspire 4 Java Ballroom One of the key elements of IDF is an annual conference to publish the latest thinking Padang Room Look to the East: The 10 August 2017 Innova Future of Indonesia and facilitate public-private dialogue on a priority development theme. The conference te 1 A rmative Policy on stands on three pillars: INSPIRE, IMAGINE, and INNOVATE. INSPIRE: Story of changes and Imagine 8 Inn Fiscal and Investment Inspire 5 Padang Room o to Reduce Income va best-practices that inspire Indonesia to ght inequality. IMAGINE: Imagining the future Java Ballroom t e Inequality Look to the East: The 2 of more inclusive, equal, sustainable, and advanced Indonesia. INNOVATE: Presenting Insights from the Future of Indonesia Y Retreat Lounge R I Ministers A n Padang Room strategic and breaking through innovations in addressing inequality issues. N n E o Inspire 6 Combating Poverty L FIGHTING v Combating Poverty P a and Inequality

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9 August 2017 Opening Session Wednesday, 9 August, 08.30-09.00 Java Ballroom

Prof. Bambang P.S. Brodjonegoro, Ph.D, Minister of National Development Planning / Head of National Development The Planning Agency (Bappenas) Republic of Brand IdentityIndonesia Indonesia Development Forum Report: An GuidelinesEffort to Include Input to Reduce Inequality

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our Excellencies,VISUALS the Vice President of the Republic of Indonesia, SU CODES We are an obsessed the creative Coordinating studio. Minister for Economic Affairs, all ministers KASTUDIO www.suka.studio Yattending this forum, Dr. Bradley Armstrong, Minister Counsellor of the Australian Embassy in Indonesia. Honourable speakers, Excellences, ministers from other countries, distinguished participants, ladies and gentlemen assalamualaikum warahmatullahi wabarakatuh, a very good morning to all of you. Reduction of inequality is a development focus that needs to be addressed comprehensively. In accordance with the direction of the President of the Republic of Indonesia, the government should focus on reducing inequality both between income groups and between regions. This has been included in the national medium-term development plan, RPJMN 2015-2019. By 2019, the poverty rate is expected to fall to 7-8 percent from the baseline rate of 11.22 percent in 2015. Similarly, the rate of inequality is expected to decrease from 0.408 in 2015 to 0.36 at the end of the RPJMN. Bappenas, as an agency, plays a role in the course of national development to continuously strive to meet the development goals set forth by the president.

24 Along with the Australian Department of also a medium of cooperation and collaboration Foreign Affairs and Trade (DFAT), through the that brings together development stakeholders Knowledge Sector Initiative and other from various sectors. In IDF, the market of development partners, Bappenas has taken ideas and innovation will be the main focus. the initiative to organise the Indonesia This forum has been designed to enable Development Forum as an international participants to talk optimally about their interests, ideas and people’s curiosity, and how practical knowledge can help materialise these ideas at the grassroots level. The “ As a forum for communication, sessions have been specifically designed to the Indonesia Development accommodate social transactions through Forum displays a variety of information exchange that generates the seeds of collaborative innovation for the future. smart practices, both at national Your Excellency Mr. Vice President, and international levels, which ministers and distinguished participants of this are relevant to Indonesia’s forum, ladies and gentlemen, this year’s IDF development context.” adopts the theme of ‘Fighting Inequality For Better Growth’ and will be held on the 9th and 10th of August. During these two days, the conference which will aim at finding Indonesia Development Forum is expected to breakthroughs to increase growth. produce recommendations to sharpen and Your Excellency Mr. Vice President, strengthen the government’s policy commit- ministers and participants of this forum, IDF is ment in development planning, especially to held to achieve three purposes. First, to reduce inequality. In an effort to discuss the accommodate development actors to create reduction in inequality comprehensively, IDF innovations in strengthening planning and initially selected 11 sub-themes. First, breaking implementation of policies. Second, to provide the vicious cycle of corruption and inequality; evidence-based policy recommendations, second, financial inclusion, a way to end knowledge and quality research. Third, to income inequality; third, the future of farmers, strengthen multi-stakeholder collaboration in small fishermen, the sources of world food and the promotion of good governance and sustainable income; fourth, inequality and the sustainable development practices. The trap of urban dynamics; fifth, technology and programs for IDF 2017 have been specially imbalances today and in the future; sixth, developed to be different from regular inclusive economic growth: how should conferences. The IDF has been designed as a Indonesia adapt to it; seventh, social security, medium for development practitioners from a means of decreasing progressive inequality; the public, private and non-profit sectors to eighth, development towards the East, the exchange ideas and generate realistic future of Indonesia; ninth, inequality and breakthroughs for national development context; tenth, alignment of fiscal and improvement. investment policies to reduce inequality; and As a forum for communication, IDF displays eleventh, the provision of basic services to a variety of smart practices both at national reduce inequality. and international levels, which are relevant to The 11 interrelated themes will be discussed Indonesia’s development context. , the IDF is in three types of sessions: Inspire, Imagine

25 and Innovate. Inspire sessions aim at giving Indonesia Development Forum can be part of inspiration from success stories to push evidence-based planning to produce policy Indonesia toward excellence. Imagine recommendations. For two days, all sessions explore Indonesia’s more inclusive, stakeholders will collaborate to share the fair, forward and sustainable future. Innovate success of smart practices at the grassroots

offers a strategic and practical breakthrough to and international level. The cooperation will be realise a more inclusive, fair, advanced and formulated into proposed national and regional sustainable Indonesia. policy strategies. In the end we hope that the As one of the ways to collect smart practices results can be raised by the President in a and best innovative ideas, the Indonesia cabinet meeting with relevant ministers and Development Forum opened a Call for Papers. governors to increase the commitment of the More than 500 abstract papers from various central and local governments in order to categories, including from domestic and achieve the priority focus of the government foreign students, were submitted. This work plan. extraordinary amount indicates that people Your Excellency Mr. Vice President, are very concerned with efforts to reduce honourable ministers and distinguished guests, inequality in Indonesia. With the involvement ladies and gentlemen, in general there are four of experts, 44 of the best scientific papers main factors that drive inequality both currently were selected to be presented and discussed and in the future. First, the inequality of in this, the Indonesia Development Forum. opportunity since the beginning of life that The Indonesia Development Forum invites affects the quality of human resources; second, renowned speakers both national and unequal distribution of work; third, wealth is international. This effort is expected to capture concentrated within such a group of people more comprehensive inputs so that the only; and fourth, low economic resilience.

26 Asset ownership is one of the determining is a reflection of Java’s dominance in economic factors in reducing inequality. Without sufficient activities in Indonesia. In Sumatra, growth up productive assets, the lowest economic to the 45th percentile is still below 2 percent, community cannot get out of poverty, nor while in the eastern region of Indonesia few increase their income. Furthermore, without people have growth rates above the regional adequate assets, vulnerable families cannot average, which is the lowest in all Indonesia. invest adequately for the future of their In dealing with increasingly complex children. This situation will be repeated inequality issues, the ‘one size fits all’ approach constantly in a cycle, thereby forming a vicious is no longer relevant. There must be circle. adjustments to approaches and programs. Unlike other Asian countries, inequality in Development of policies, as well as evidence- Indonesia has shown an increasing trend over based development programs, knowledge and the past decade. However, in 2014 Indonesia quality research will help achieve the maximum began to reduce the Gini ratio. The Gini ratio impact of efforts taken to reduce inequality. for March 2017 was 0.393, down from 0.408 in Efforts to reduce inequality have also 2015. The decrease in the Gini ratio was due become part of a global agenda that has been to a reduction in the proportion of consumption included in the Sustainable Development per capita at the top of the decile, though this Goals. In the year 2030, it is expected that no began to increase in the middle and lower one will be neglected or left behind. For that, groups. Based on expenditure per capita Mr. President has issued this year’s growth of the urban / rural population from Presidential Regulation to ensure the 2008 to 2013, average urban expenditure commitment of the central and local growth is higher than in rural areas. Growth in governments to reducing inequality. One of rural areas is more equitable, while growth in these commitments is materialised through expenditure per capita in the islands of the collaboration between Bappenas and Indonesia has been dominated by Java. This UNICEF to prepare a baseline report on

27 Sustainable Development Goals on Indonesian organisation of the Indonesia Development children. This report is expected to accelerate Forum. I am really happy to welcome all the the achievement of SDGs related to children. participants to this event. I can clearly feel Your Excellency Mr. Vice President, your enthusiasm to attend this event because ministers and participants of this forum, I have the issue of inequality is indeed interesting to just conveyed to you the substance and be the theme of public discussion. Lastly, I important things about this forum. As the hope you will find all activities in this 2017 Minister of National Planning and Development Indonesia Development Forum beneficial and and Head of Bappenas, I would like to extend insightful. Hopefully this forum can help my gratitude to all those who have submitted generate new ideas and policy proposals to papers and also to development partners, inform our national development planning especially the Australian government through policy and strategy in the future. the Knowledge Sector Initiative, which has Wassalammualaikum warahmatullahi provided support in the preparation and wabarakatuh.

28 Video Message

The Brand Identity Brand Guidelines Guidelines

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VISUALS CODES SU We are an obsessed obsessed an are We creative studio. studio. creative

www.suka.studio O STUDI KA President of the Republic of Indonesia, Joko Widodo

“Development naturally aims to reduce inequality and improve people’s lives. Public participation and involvement are key to successful development. I hope the Indonesia Development Forum will be a means of raising ideas in achieving the development objectives, which is to increase the welfare of all Indonesians.”

29 Opening Remarks Wednesday 9 August, 09:00-09:30 Java Ballroom

Vice President of the Republic of Indonesia, Muhammad Jusuf Kalla The Brand IdentityIndonesia Development Forum Guidelines

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VISUALS AssalamualaikumSU warahmatullihi CODES wabarakatuh. We are an obsessed creative studio.

KASTUDIO www.suka.studio Good morning and a warm greeting for all of you. Honourable Coordinating Minister of Economic Affairs, Minister of National Development Planning/Head of Bappenas and other ministers, Australian Government representatives, distinguished guests, ladies and gentlemen. At the outset, let us be always full of gratitude and I am also grateful for the opportunity to address you in this, the Indonesia Development Forum. Talking about inequality can certainly be done from different standpoints. In America, 1 percent versus 99 percent is said to bear extraordinary inequality, but it is an inequality in prosperity. In Indonesia, we also face the challenge of inequality, as shown in the disproportional distribution of the poor and the rich. We are not balanced, with a very large number of poor. Accordingly, we need to pay attention to two things: inequality and poverty. There are many perspectives when we talk about inequality. It can constitute inequality due to gaps of income. It can also constitute inequality between sectors such as between agricultural and industrial sectors. Inequality is also the discrepancy between the lowest and highest income groups. Inequality exists in many countries although the gap may not be as high.

30 But in Indonesia, for example in Jakarta, the society. During Bung Karno – with the concept gap between the lowest income and the of Trisakti – Indonesia built an independent highest income groups can be hundred-fold. economy. During Pak Harto – the trilogy of Between those who are paid the minimum development programs focused on how equity regional salaries and the high level and productivity growth could be achieved. professionals, their salaries may be hugely And now of course we embrace the belief that different. That is certainly our homework, to equity should be achieved. Basically, many reduce inequality and poverty. steps have been taken so far; in the 1950s the Similarly, occupations in various sectors, affirmative policy was Government Regulation such as farmers, industry workers, as well as Number 10 and Presidential Decision Number other professionals such as teachers and 15, which even governed about equality in all doctors, of course also have different salaries, regions. All these of course have led to good thereby creating inequality. But it all comes outcomes, but not good enough to overcome back to productivity. So increased productivity the inequality that still persists. Lately, we have is the key. We must find ways to improve the been working hard to provide credit for productivity of farmers, industry workers and medium, small and micro businesses, as well other fields. There are many possible solutions, as health insurance, education assistance and fiscal policies for example. The richer a country is, the higher the taxes. Scandinavia for example, imposes 60 percent income tax, while in the United States the rate is about 30 “The most important thing is to 35 percent and in Europe up to 40 percent. to increase people’s income. If We need to find ways to better collect taxes and increase the number of people paying subsidies are increased, it will taxes so we can support the poor. On the other reduce our ability to build.” hand, we can reduce taxes to attract investment. From the beginning when our country was established, our founders were thinking about other programs. The government also provides how to reduce inequality and poverty. Our minimum wage so that people can earn a nation’s founders gave a mandate to all of us: decent income. We have emphasised that to build a just and prosperous society. The minimum salary levels must increase with debate has always been whether we have to economic growth and inflation. It is one aim at prosperity first, or justice first and then solution that I believe will allow us to move to prosperity. It is not easy to answer. Do you a fair sense of justice. The growth achieved by need to make your pie bigger first before the working class should be enjoyed by all. dividing it, or you just go on and immediately There are many efforts, although still not divide it? Many theories can help you decide. sufficient. There are of course results, as But you cannot have justice without a large evidenced by the decrease of poverty, but this pie. However, only a stable country can is now slowing down, which means our poverty expand the pie, and stability can only be reduction efforts have become stagnant. achieved if there is social justice. And that is why we have to work and try From time to time, all governments will have even harder. Different eras will apply different good programs to build a just and prosperous economic ideology. Back in the 1970s and

31 1980s we adopted a more open economy, for gone down, subsidies were kept at the same example. Today, the government embraces level, however large subsidies for fuel and rice the ideology that the state should be more for the poor remain. involved, however the programs that we We also provide people with cash transfer implement in this republic should be in line programs, as well as other subsidies. But with our needs in general. We are grateful that programs like these do not solve the basic our Gini ratio has slightly reduced. But that is problem. The most important thing is to

the Gini ratio in terms of consumption; we increase people’s income. If subsidies are have not seen the income-side of the Gini ratio increased, it will reduce our ability to build. Do reduce. If we analyse the income, the result Village Grants need to be increased? We hear may be different from consumption. That is strong criticism about its utilisation, as there is why working hard to improve productivity will suspicion that the fund is mainly enjoyed by pay off. If our income or productivity gets middle class in the village. The same with better, we will have sustainable increases in health programs. We are faced with stunting income. These are two basic things we need among our children, and there are challenges to do to reduce poverty and to minimise to providing children with good education so inequality: increase the income of the poor, that inequality can be reduced. I hope that and reduce their expenditure. A lot of subsidies today’s discussion also can be conveyed to have been provided to the poor, whether in the our regional leaders, as all that we run at the form of electricity subsidies, fuel subsidies, national level should also be implemented at fertilizer subsidies or other subsidies. We once the regional level. In the era of regional spent nearly 400 trillion, only for subsidies. autonomy, without good implementation at the This amount was nearly 30 percent of APBN in sub-national level, no matter how much 2014. The growth rate was 20 percent. How transfer is provided, the result will not be good. high! Nowadays because oil prices have not What matters most now is how to encourage

32 our people – farmers, workers and employees implemented at the local level. The same is – to increase productivity. true for job opportunities. No matter how we Our national economic policies should be to debate it, farmers’ incomes will be lower than improve productivity. There are two national industrial labourers. And that is why we always policies that we have implemented, whose strive to provide ease of conducting business, impacts are still felt: the policy during the manufacturing and industry at the local level. financial crisis to guarantee all kinds of And of course rice farmers will increase their banking, and the big fuel subsidy. These two income if they become more productive, but policies restrict our capacity to develop. the price of rice is always controlled by us. On To reduce inequality, we accelerate growth the other hand, we increase the income of in the poorest sections of society, and not industrial workers every year, sustaining the decrease growth among the rich. The rice farmers, to provide employment and construction of housing, electricity, water and equity. Of course, good manufacturing jobs sanitation infrastructure is an example of and those that provide tax revenues need to things we must immediately implement. The be provided. Whatever we are talking about easiest example would be this: if there were here is ultimately at the heart of how to no sanitation program in our community, water increase the income that spans across all of for people living in prestigious areas like our communities and reduces spending on the Menteng would be cheaper than in poor areas. other. That will be our report to convey to this That is not fair. Programs have to be created forum. and improved to prevent this from happening. Thank you and good luck. Local governments play key roles, because Wassalammualaikum warahmatullahi what is planned by the central government is wabarakatuh.

33 Keynote Address Wednesday, 9 August, 09:30-10:00 Java Ballroom

Video GreetingDr. from Darmin H.E. Nasution,Joko Widodo, Coordinating the President of the RepublicMinister of Indonesia of Economic Affairs of the The Republic of Indonesia

Brand IdentityThe Importance of Understanding Guidelines Inequality in Indonesia: Facts and Strategies to Tackle Inequality

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KASTUDIO www.suka.studio Assalamualaikum warahmatullahi wabarakatuh. My colleague, Minister of National Development Planning and Head of Bappenas as our host, Minister Counsellor of the Australian Embassy, fellow government officials, distinguished guests, participants, ladies and gentlemen, a very good morning to you all. Inequality, as well as poverty, constitutes complex issues or phenomena. Actually the struggles of growth and inequality are prevalent everywhere, and the same is true in Indonesia. I believe the 1970s was the most productive period in the study of ideas and practice, to find the optimal combination of equality and growth. What is interesting is that after the Second World War, industrialisation in Europe and America began to enter into the service industry, which was able to give birth to fairly strong and fair growth, until the 1980s. The 1980s were rife again with issues of inequality, and this is our current condition, we are in the midst of this problem. There are still many things that we do not understand, what the complications are, and what is the impact of poverty and inequality.

34 We know about the rapture in the food was consistently on the rise. We started development of the digital economy. But we do to see a slowdown only in the last two years. not have enough experience to know its impact But what we often forget is the exchange rate on poverty and inequality. I would like to take a for farmers. Farmers’ exchange rate fell. In brief detour on two things in Indonesia. July 2017, it fell by 0.83 percent compared to Indonesia’s economic growth is still improving, the end of 2016. In the previous years, in 2015 the irony is that inside Indonesia, our economic too, the decline occurred. This means that the growth is not well appreciated, it is always increase of food prices does not seem considered low. But in the international attractive for food producers. Why? Because environment, our economic growth is always they do not store the stock, they do not store well appreciated. Indonesia’s economic growth the product. Once they harvest their produce, could still reach 5 percent annual growth in they sell it immediately. That is probably one both the first quarter and second quarter of issue that we need to find a solution for, 2017. Viewed from expenditure, which is the because for the present government this is an main source of growth, consumption remains issue that is not convergent. at the top, although not as high as a few Second, what needs to be noted about the quarters ago, with capital and investment slowing down of poverty levels and the rate of coming next. inequality is the fact that we provide some According to experts, growth is relatively in social assistance. I do not have complete data line with the level of poverty. If growth is good, about this, but lately we have been trying to poverty reduction is also good. But it is not improve the distribution of Rice Welfare always consistent with improvements in equity Assistance (RASTRA) and the Family Hope or inequality reduction. Do we experience the Program (PKH). It is not yet comprehensive same thing? Not always. It seems we have but we have begun to try, first to improve managed it pretty well for two-and-a-half, targeting, to reach out only to those who need almost three years. The Gini ratio, although it most. Second, we changed from rice to non- small, has continued to fall for the last two cash. What I am trying to say here is that it years. Poverty is the same. Although it is seems that this second factor is the most interesting that what people say is poverty is crucial one in improving the poverty rate and easier to handle than inequality, what we are the level of inequality. We have to provide our experiencing lately is that even the level of social assistance in a more convergent poverty is slowing down. Even in absolute manner. If we do not succeed in doing so, terms, it began not to fall, despite the fact that reducing poverty and inequality within the the poverty rate is still decreasing. current economic growth situation will be even Distinguished guests, ladies and gentlemen. more difficult. Some even say – though I am I would like to highlight how the decline of our rather sceptical about this – penetrating the poverty rate has begun to slow down, and why lowest 10 per cent of poverty will be harder inequality has also shown the same trend. We than ever now because we’re currently moving need to be vigilant about this. Interestingly into the core of poverty itself. enough, food prices in Indonesia have actually Distinguished guests, ladies and gentlemen. increased quite rapidly in recent years. It I have mentioned two things, but of course happened for a relatively long period of time, these are not the only reasons. It is not just about seven to eight years when the price of about prices, the exchange rate of farmers or

35 the convergence of social assistance, because million hectares of land and plantations that in the dimensions of inequality are quite complex, fact could be used to reduce poverty and such as regional dimensions, regional inequality. inequality. Of course there are other Let me wrap up. What are the issues we dimensions, such as distribution of expenditure need to pay attention to, mixing between groups. Why is the Gini ratio still down? In the poverty and inequality? The first is presentation it can be seen that the red graph infrastructure. Why? Without connectivity, we is the bottom 40 percent on the far left, still cannot do anything. Even if we have land, we rising, although only slightly, not much, from cannot do much. Let me present how the 17.20 percent to 17.22 percent of total government is building infrastructure in all expenditure. That is the bottom 40 percent: 40 parts of the country. At the moment, there are percent of medium income increased from 36.09 percent to 36.47 percent, while the top 20 percent declined slightly. This means that the improvement of inequality is an “We have to provide our social improvement of not only one group of people, especially when viewed through the tenth assistance in a more convergent deciles of expenditure or income. The numbers manner. If we do not succeed in on the right are for urban and rural populations. doing so, reducing poverty and Of all that, ladies and gentlemen, what I want inequality within the current to highlight is the source of poverty and economic growth situation will be inequality. The policy has obviously been even more difficult.” influenced by the exchange rate, not the convergence of social assistance delivery policy. We, the government, at the time of 245 national strategic projects: 74 roads, 23 formulating the policy of economic equity, railways and so on. I do not need to read them have three major elements or pillars, which one by one. And the regional distribution is like are the foundation of reducing inequality. this: 61 in Sumatra, 24 in Kalimantan, 13 in The first is land. In the past, we also believed Papua and so on. We underestimate these that this was the most important factor. It is issues – as if it is only about growth. It is not! It indeed important, but not as much, we need is also about equality. At a minimum, equality equity, we need capital. This does not mean between regions. At a minimum! But in fact money, but we need to support poor more than that. In addition we also need communities with access to land. We need to industrial infrastructure. A key to economic assist the quality of human development. The development is growth plus transformation. terminology is not nice-sounding – human Open any textbook and you will see growth development. So I will try to present the ten and economic transformation. Let me present pillars of land issues. I do not have time to the distribution of industrial estates and special present one by one. I wish to say that there are economic estates, per region, and finally 4.5 to 9 million rural households who do not tourism areas and the distribution of national have access to agricultural land. There are electricity development, infrastructure and 14.4 million rural households that do not even access to land. have a small plot of land. And there are 13 Human capacity is complex to develop. We

36 have tried to build national training and vocational training and opportunities to work. vocational centres. Apparently, training and These aspects are much broader. It is not just vocational education need strong industry about retail. Even the opportunity to open rest infrastructure, because vocational training areas on highways is something for which we implies only 30 percent classroom education do not have a concept or regulations. Finally, with 30 percent internship, 30 percent training, on social assistance: that needs to be etc. Where can they do an internship if there converged because the core of poverty is not are no industries? Or there are industries, but responsive to issues around land and so on.

not enough to accommodate all interns? This Ladies and gentlemen, this is what I have to is our challenge, less ambitious than we present. Hopefully today’s discussion will expected. But the Ministry of Industry is allow us to see these complex issues in depth. starting to move, the Ministry of Agrarian Thank you. Affairs is starting to move, and so on. The Wassalammualaikum warahmatullahi point is we have to shift general education to wabarakatuh.

37 Welcoming Remarks Wednesday, 9 August, 10:00-10:15

Dr. Bradley Armstrong, Chargé d’Affaires, Australian Embassy Indonesia

Australia-Indonesia: Partners in Tackling The Inequality for Better Growth Brand Identity Guidelines

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KASTUDIO www.suka.studio Nasution. Horas! Honourable Minister of National Planning and Development, Bapak Bambang Brodjonegoro. Honourable speakers and distinguished guests, ladies and gentlemen. Good morning. A warm greeting to all. Since all speeches so far have been delivered in Indonesian language, I will also try to use Bahasa Indonesia. I apologise in advance for any mistakes. Allow me to congratulate the Government of Indonesia and Mr. Bambang Brodjonegoro as an initiator of the Indonesia Development Forum, which adopts the theme of combating inequality for better growth. With the benefits of Indonesia’s strong economic performance unequally spread across society, we can appreciate why addressing inequality is high on President Widodo’s agenda. This explains why the issue of inequality is an important

38 agenda for His Excellency Mr. President safety net which ensures the most Joko Widodo and the Indonesian disadvantaged Australians have access to government. Support for Indonesia to healthcare, housing and a basic income, combat inequality and growth also underpins which helps them access the opportunities Australia’s economic development created by a growing economy. Social partnerships. transfer is the biggest single item in our Inequality, as we know, is not a problem budget - $164 billion or 1.6 quadrillion that is exclusive to Indonesia. Inequality is a rupiah. Without our system of taxation and global issue. Economic growth has managed transfers, it is estimated that Australia’s Gini to cut down by half the number of people in coefficient would be 0.52 – on par with Chile the world who live on less than $2 per day or Zimbabwe – instead of where it is at 0.33. since 2001. Yet, although progress has been made on reducing poverty, inequality has grown for many decades and remains high. The benefits of global growth are not being ”Strong and robust growth is a shared equally within countries or between clear pre-condition for improving regions. Some segments of society have living standards. Australia’s missed out on those benefits altogether. partnership with Indonesia works Inequality is also a local issue. Just like to reduce inequality for better Indonesian public policy, Australian domestic growth, reflecting our mutual policies work to reduce inequality at home. A interests in prosperity and job is the most important opportunity to regional stability.” improve someone’s welfare. In Australia we have worked to create 240,000 jobs in the past financial year and to make those jobs However, there are many challenges more equally available to all citizens through faced by Australia. The difficulty of ensuring mechanisms such as anti-discrimination equal access to services to Indigenous legislation. Australians is compounded by numerous The Australian government also works to factors, not least the cost of service provision reduce income inequality by growing the to remote communities. The Australian economy and effectively collecting revenues government is aiming to close the gap to fund health, education and social between indigenous and non-indigenous programs. We use a progressive tax system Australians, including through investment in in which the tax burden increases as income remote housing and tailoring solutions to increases. The highest paid 20 percent of local community needs. Australians pay about 70 percent of the Distinguished guests, ladies and taxes we collect, while the lowest paid 40 gentlemen. Strong and robust growth is a percent pay just 3 percent. Through taxes clear pre-condition for improving living (about 24 percent of GDP) Australia is able standards. Australia’s partnership with to finance a strong and well-targeted social Indonesia works to reduce inequality for

39 better growth, reflecting our mutual interests reform of Indonesia’s major investments, in prosperity and regional stability. Through such as the Program Keluarga Harapan and various economic governance programs, Bantuan Pangan non-Tunai. Australia supports Indonesia’s ambitious Together with the World Bank, for over plans to reform the tax system and reduce nine years through the GENERASI Program, subsidy costs that allow improvements to we have assisted in the improvement of government spending and boost revenue maternal and neo-natal health services in sources. The provision of services and rural areas across Indonesia. To overcome infrastructure development has been the problem of stunting and inequality, the attempted and prioritised by the President Indonesian people need the ability to buy and is needed by the state. Without healthy food at an affordable price. infrastructure improvements, Indonesian Unfortunately, Indonesians are buying rice companies will find it very difficult to compete at a higher price than people in other

with businesses from other countries. countries. Through our development cooperation we Effective and open trade policies will are working in partnership with Indonesia to balance food prices and reduce costs. Food improve access to opportunities for all security is vital for every country and trade Indonesians. This includes Indonesia’s allows the economy to avoid price shocks efforts to overcome stunting, which is still and supplies that help people get out of high, and increases the risk of illness and poverty. undermines cognitive development. Together we try innovations to improve Australia is also pleased to work with productivity and livelihood resources Indonesia to improve the coverage and through cooperation with the private sector. quality of the social safety net through the The Australia-Indonesia partnership for rural

40 development has been working with water and sanitation over 14 years to help agribusiness to improve agricultural and Indonesia bring clean water and sanitation productivity markets. We strive for greater to all Indonesians. This effort has generated and more profitable private investment for tremendous leverage from Indonesian businesses that also create more government investment for a total of $2 employment opportunities. To date, we have billion. These contributions are a reflection increased incomes of 77,000 smallholder of the advancement of our economic farm households by 139 percent and partnership. increased profits for over 800 small Distinguished guests, ladies and Indonesian businesses so that those farmers gentlemen. Increasing trade, investment can spend more on food and education for and developing the private sector will create their families. jobs and is an important way to lift the Australia and Indonesia also work population out of poverty. Our two countries together to address gender inequality and are currently negotiating the Indonesia social exclusion. Gender equality will Australia Comprehensive Economic support economic growth and social Partnership Agreement (IA-CEPA). IA-CEPA development that may otherwise harm both can make an important contribution to the women and men. The Australia-Indonesia president’s agenda to continue to drive MAMPU Program has assisted women in economic growth. Through IA-CEPA there is many villages in Indonesia to play a greater an opportunity for our partnership to role in local politics and decision-making increasingly enable private sector and trade- processes. Together with the Coordinating driven growth, in a way that complements Ministry for Human Development and the support to more inclusive governance. Culture, we assist vulnerable and We look forward to the conclusion of the IA- marginalised community groups such as CEPA negotiations by the end of the year. people with disabilities, indigenous people I want to emphasise that there does not and minority groups to obtain basic services need to be a compromise between equality through the PEDULI Program. and growth: growth can be inclusive and, As a developing economy that is spread with the right momentum, there are policy over many thousands of Islands, and options for making inclusive growth a reality stretching more than 8,500 kilometres by in Indonesia. However, as my examples land and sea from Sabang to Merauke, illustrate, inequality is multi-faceted. To Indonesia faces significant challenges in understand and address the different overcoming regional disparities – something, dimensions of inequality, we must consider as I said, with which Australia is familiar. The the social, political, economic, cultural and KOMPAK program, for example, is working geographic dimensions. in the seven poorest provinces to improve Australia is delighted to support this first local health and education services. Through Indonesia Development Forum through the our long-standing infrastructure partnership, Knowledge Sector Initiative. We are also Australia will, in total, invest $300 million in pleased to support seven Indonesian

41 students who have studied at Australian the private sector and government, along universities through the Australia Awards with rigorous planning and oversight of and who will present their research in the priority programs to deliver results for next two days. growth, competitiveness, and human We see the importance of this forum as development. We look forward to a rich an activity we hope can be carried out every discussion and debate over the next two year, as an important part of the national days. development planning process. To meet its Thank you. Wassalammualaikum multi-dimensional challenges, Indonesia warahmatullahi wabarakatuh. Om Shanti needs inputs and solutions from civil society, Shanti Om. Shalom.

42 Public Lecture Wednesday, 9 August, 10:15-10:45

Prof. Martin Ravallion, Georgetown University The Measures and Policies for Fighting Poverty and Inequality Identity Brand Guidelines Guidelines

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am really delighted to be invited by Professor Bambang VISUALS Brodjonegoro as CODES SU We are an obsessed obsessed an are We creative studio. studio. creative Minister of Bappenas to make this presentation and delightedwww.suka.studio thatO itSTUDI KA is the first Iidea on this topic. I think that’s a very good sign. It is great to be back in Indonesia. I worked on Indonesia quite a lot in the 1980s and 1990s and it is great to see the progress that Indonesia has made. It is not so great to see how unevenly that progress has been spread. But still there are some good signs there as well. Most of the developing world, including Indonesia, has made huge progress against absolute poverty. That’s the good news and I am going to show you some evidence on that. The not so good news is that there are really continuing challenges in addressing inequality, raising inequality in many countries, of raising inequality in Indonesia which is a serious policy concern: issues of relative poverty and very importantly the issue of, are we leaving anybody behind? Are the poorest being included by the processes of economic growth we are seeing in the developing world? The good news is that policies to address this exist. We can address the

43 concerns about poverty and inequality in a for reducing inequality. But, I will point real way. Absolute poverty, we can eliminate towards a number of recommendations for within a generation. We know how to do it. thinking better, more positively about these The biggest issues in my view are political policies. will and administrative effectiveness. We Okay, why do we care? I think it is in our need to learn more about the capability for biology. Primatologists have told us this by actually implementing the policies that we studying animals and the way they react to know of. We are going to need to learn more unfair situations. It is really built into us. We of course; more research will be needed. But care about unequal trade. We care about I point to both the importance of political will unequal opportunities in life. It is in our and administrative capability for effective biology. It is something fundamental to implementation, including financing. advance organisms. What is the roadmap for this talk? I will We also care about unequal outcomes in start with a little bit of philosophy on ethics. life. Utilitarians have told us that for a long Why are we concerned about inequality and time. I am not a utilitarian but I respect their poverty? I think it is really important to step utilitarian perspectives; also, in part because back and think about that, and economists unequal outcomes today can become are often ignoring this and that’s to their peril. unequal opportunities in the future. And Then I am going talk a little bit about how we finally, we care about specific inequalities. are doing. What does the evidence look like, Inequality of gender, race, the things that including for Indonesia? Lastly, how can we stem from discrimination in society, and do better? What are the kind of policies we these are objectionable.

can point to for addressing these concerns? On the economic side, there are a host of And here there is no magic bullet as Jeff reasons why we care about inequality. And Sachs pointed out, in an economy as even if we do not put much weight on the complex as Indonesia. We are not going find ethical arguments, I would say we still need a single magic bullet for eliminating poverty, to worry about inequality and poverty. These

44 are things which constrain economic growth. reduction in those economies. They will not We use to think of it just as a relationship become nice places. from growth to inequality; we now understand Some inequalities matter more. And here I it as a reverse relationship. What are the really want to point out inequality of ways of an unequal society, when markets opportunity. In other words, the inequalities are not working perfectly for credit, land, labour? What ways can initial endowments in the economy impede the progress of that “On the economic side, there are economy as a whole, and also impede the a host of reasons why we care prospect of poor people participating in economic growth? Inequality and distribution about inequality. And even if we are fundamental to economic outcomes. do not put much weight on the Development economists have known of this ethical arguments, I would say inversion for a long time–very famously, the that we still need to worry about great development economist, Arthur Lewis, inequality and poverty. These are who amongst other achievements won a things which constrain economic Nobel Prize. He pointed out that development growth.” is inevitably unequal because it does not start everywhere at the same time. There is of opportunities people face in life. How inevitable unevenness to growth processes. much does the condition of their birth We have to recognise the fact that there will determine their prospects in the future? be inequality in growing developing Another concern is absolute inequality. I economies. That does not mean we cannot find this as important because I have come manage them. The key point that Lewis was to realise that the way possibly half the also making is that as long as the poor do people in the world think about inequality is participate in that growth process, as long as actually quite different from the way people do catch up, we will be quite happy economists typically think about inequality. with the situation. But that is the all-important Economists like me; I have been trying to question: Do they? think about inequality in a very particular There is also a view that says even if we way, about ratios of income. In economics, accept that poverty trumps inequality, we there is something called the scale of may also be concerned about inequality; the independence axiom. But I have come to kind of concern that Thomas Piketty and realise that is not how most people Joseph Stiglitz point to. High inequality necessarily think about inequality. Have a comes from high returns to rent in society. look at these numbers (Slide 8). There are idle children, transmission of a Imagine this as distribution of income: 1, 2 new gilded age. I do not think this is yet a and 3. You can think of it as one dollar a day, major concern for Indonesia but it is very two dollars a day, three dollars a day or one much a concern for countries like America, dollar an hour or two dollars an hour. It is a where I live, concerns that will undermine distribution of income in society. Suppose it long-term prospects for growth and poverty changes into distribution 2, 4 and 6. Just

45 Slide 8

think for yourself! Has inequality changed? has been falling. It’s been falling since the The tradition of formal inequality analysis whole new millennium, since back in the says inequality is identical in state A and 1990s. Global inequality has actually state B. However, when I talk to people, reversed in the long run. If you go back one many of them say inequality is higher in hundred years or more, inequality was rising state B. They look at the gap between the 6 globally. The countries that are advanced and the 2. They compare it to the 3 and the today started to industrialise. When they 1 and they see it as so much larger, doubled! took off, they left a lot of the world behind. That is absolute inequality. If you look at That was the rise in global inequality. those numbers and you think that inequality In the new millennium, since the 1990s, has risen then you think about inequality in global inequality is falling but it is falling in a absolute terms. There is nothing wrong with particular way. It is falling because of that! I am perfectly happy for you to do that. economic convergence. It is falling because But it is actually very important when we talk of the growth in countries like Indonesia. If about inequality in development to know we unpack total global inequality, it looks how you think about inequality. Lots of like this (Slide 11). globalisation debates are between people At the top you have total global inequality. who think about inequality in absolute terms Then it is broken up into two components: and people who think about inequality in the inequality between countries and relative terms. It is a debate about a concept inequality within countries. Between of inequality. If you think about inequality in countries really tells the whole story, pretty absolute terms, you’re seeing rises in much. Global inequality is falling because of absolute inequality in a place like Indonesia. the inequality between countries. If you look If you think in relative terms, well…not so within countries, it is actually a slight edging clear. Falling for some period, rising in up. Average inequality in the world is recent times, and stabilising lately. creeping upwards. But then you look at A very short history. People do not realise some countries, such as Indonesia. that global inequality, global relative Indonesian inequality was falling from 1970 inequality between all people in the world, to sometime in the 1990s and then started a

46 Slide 11

new trend upwards. It is a bit worrying when as a whole going back 200 years. There are I look at it: a trend increase in the Gini index ups and downs, but general decline. But we of 0.5 per 10 years, which means that if the also think about relative poverty, not just trend continues, in 10 years’ time Indonesia absolute poverty. We can think of it as lower will have the inequality of Brazil, one of the bound and upper bound to the true measure most unequal countries in the world. of poverty. The lower bound is an absolute But there is a reversal. If the trend line, meaning that the line is fixed in real continues, that is absolutely critical. We terms over time and across countries. In have got some signs for the period of falling relative poverty on the other hand, the inequality during the 1990s crisis. But I do poverty line moves with the means. Most not recommend crisis to deal with inequality! developing countries use an absolute We are seeing signs of stabilisation in poverty line. Indonesia is actually an recent years. I put a question mark on that exception, one of the few. Indonesia uses because we do not fully understand why an implicitly relative line. BPS does not that is happening. We do need to understand quite say that, but it is an implicitly relative it better. line. What about poverty? The story here is Let us look at the two rates (Slide 14). one of falling absolute poverty in the world

Slide 14

47 Here we have the lower bound and the Nobody has seen this before. I have just upper bound going back to about 1990. The done it for Indonesia. Here is the striking good news is we are seeing progress in thing! Look at this crisis. It is such as strong absolute poverty and in relative poverty. That feature of this data. But the general trend is is really good news. It is a particular kind of downward both in the upper bound and the relative poverty. It is what I called weakly lower bound. That’s very good. Both absolute relative. But the key point here is that we are and relative poverty are falling in Indonesia. seeing such a decline in a number of people And look at the numbers of poor! The top living below this frugal absolute standard. picture is percentages of people. If you look Here I have used the World Bank $1.90 a at numbers of poor, what we are seeing is a day poverty line, with an update of a line I substantial decline in a number of absolutely developed before that, but it is a reasonable poor people but many of those are now number. The upper bound here is essentially relatively poor. We are seeing a rising saying that if you are above the upper bound, number of people who are relatively poor but to be considered somebody not poor, you not absolutely poor in Indonesia. have to be neither poor by this common When I read what people write about global international standard, $1.90, but also poverty in the world, I hear statements, for not poor by standards typical of the country instance from none other than ex-UN they live in. So there are two hurdles. You Secretary General Ban Ki Moon. If the have got to get above the global international poorest of the world is left behind, we need standards, and you have got to get above to reach out and lift them into our lifeboat. the standard that is typical of the country you Guy Ryder, the head of ILO, has said that live in at that time. So, there is good news. In poverty is not yet defeated. Far too many fact we are on track to achieve SDG 1 to people are being left behind. When I see eliminate the lower bound poverty by about quotes like that, my first reaction is…haven’t 2030-2035. I’m not sure, that last few percent they read the literature? Haven’t they read maybe a lot harder. my papers? Do they not know poverty is What about Indonesia? Here are the falling and growth is growing in most of the upper and lower bounds (Slide 15). work? That is the reality!

Slide 15

48 Then I thought about it, and maybe they numbers we have looked at, including the are talking about something I’m not talking BPS number and so on, are telling us what is about. Maybe just like that absolute inequality happening to the floor. Is the bottom rising? difference versus relative inequality. Maybe Is it the picture on the left? Or is it the picture they are looking at the data in a different on the right? That’s actually quite critical. If way. Actually I’ve come to the view that they you think about social policy, we think about have and they are. The pictures (Slide 18) arguments for things like minimum wage are two cumulative distribution functions. rates and social policy arguments.

Slide 18

They give you the percentage of people We need to think about arguments like living below any point in the distribution. this. Here is one of my favourite quotes from Let’s say 20 percent of the people live below any political figure, Mahatma Gandhi, just a particular point in the distribution. And here before he was assassinated. He was asked I have given you the picture for all of the by a politician in India, “How can I judge my points, all possible poverty lines. But I have success?” And Mahatma’s answer was, given you it in two ways. “Recall the face of the poorest and weakest On the left, the poverty rate has fallen person you have ever seen and ask if the between this distribution by a substantial steps you contemplate are going to be of any amount. On the right, it has fallen by the use.” That is the same point, ask yourself are same amount. I’ve drawn it that way. We see the poorest benefiting? Are you raising the this decline. But there is a big difference. On floor? That’s a rights-based argument. It is the left, the floor has stayed put. So, here’s not a standard utilitarian argument, the type the situation where poverty fell but the of argument economists are used to. It is a poorest were left behind. The support of the rights-based argument. And of course you distribution did not increase the lower bound, do not achieve rights on average. Rights you the floor if you like. achieve for everybody. So if you are leaving On the right, it did. And in fact, none of the somebody behind, if you are systematically numbers that I have shown you, none of the leaving people behind, that is a problem.

49 Social policy tries to reverse that. What is That’s for the developing world. What happening in the world? We are leaving about the world as a whole (Slide 21)? people behind. This is a picture I created Is this not incredible? This is what is (Slide 20). happening: nearly zero at the bottom.

Slide 20

I have given you the absolute gain in the Absolute gains are going through the roof at developing world as a whole by percentile of the very top. That is the world as a whole. distribution. The poorest are on the left and The very top percentiles–the lines go even the richest on the right. Those are the higher probably. absolute gains in real terms over 30 years Here is another way of looking at it (Slide for the developing world as a whole. Look at 22). that! Nearly zero at the bottom. There is a This is the overall mean consumption in rise in absolute inequality. In terms of those the developing world. Strikingly, we’ve got a two pictures I’ve shown you, it is the one on new growth trajectory at around 2000. the left. Growth rates went from a long run growth

Slide 21

50 Slide 22

rate of about 2 percent per person per year right now. First and foremost, economic to 4 percent per person per year. That’s great growth remains crucial, especially in poor news! But look at the blue lines. The blue places. Growth has been distribution neutral lines are my estimate of the consumption on average. Growth has been the main floor–the expected level of lowest proximate source of poverty reduction. We consumption, the typically lowest level of find little to no evidence of trade off. It is not living in the world. It has not risen. In other a major issue. You can have your cake and words, what has happened since the new eat it too if you do the policies the right way. millennium is that the mean has increased You can have falling inequality with growth. but it has not pulled up the bottom. What You can also get into a virtuous cycle, a about Indonesia (Slide 23)? degree of smart redistribution in a high

Slide 23

This is a bit better. Again, here is the 1998 inequality country. It is likely to be good for crisis. We are seeing a little bit better growth and very likely to be able to support progress than the developing world as a policies that are also good for poor people in whole. But I think, I hope, one could do the longer term. Growth is fantastic for better. financing redistribution. The right kind of Let’s talk a bit about why that’s the case redistribution, particularly in high inequality

51 Slide 26

countries, can be really good for promoting true. In low-income countries, education growth. So you can get into a virtuous cycle. expansion can actually come at a cost to How do you do that? This is a list of my inequality. In Indonesia, with your stage of favourite policies (Slide 26). development, that is no longer the case. We Develop human and physical assets of also have new evidence on the importance poor people. Make markets work better for of early childhood development. We are poor people. Remove negative learning that it is not just about what you do discrimination. Remove biases against the in school from age 5 years; it is pre- poor. Invest in local public goods and conditions. It is the extent to which your infrastructure. Remove restrictions on parents talk to you as a kid. The amount of migration between and within countries. interaction you have. It is the nature of that Most countries do not have restrictions on interaction. Human development, child migration within the country, but some do, development from an early age, is crucial not like the hukou system of household just for the welfare of those kids, but for registration in China. It is really a first order avoiding the cycle of poverty across poverty issue for the world to eliminate the generations that we see everywhere. registration system in China, and find ways Redistribution policies complement to foster labour absorption from urban economic growth. Here I think there are economies. some lessons from the advanced economies. Let us move to investing in local public It is really quite striking how much on average goods and infrastructure. There are still tons the advanced economies in the world do in of biases against the poor, public spending, fact reduce inequality. They are doing it less taxation, pricing and regulation. All kinds of than they used to but here is the difference: things we could just fix. And all of this, I very the average Gini for market income in much agree with the prioritisation that Jeffrey advanced countries is 0.49; the average Gini Sachs said around human development, for disposable income is 0.31. So, there is a particularly education as being central. For sizeable average of redistribution going on. countries such as Indonesia, education Fiscal incidence in Indonesia does not expansion needs to be pro-poor. I say that look nearly as good (Slide 30). with a qualifier because it is not necessarily

52 Slide 30

Here is the estimate from the project led by Nora Lustig of the Gini coefficient from This is really the question: How are we market income in Indonesia and the final doing in this redistributive effort? Fifteen income, which in the Indonesian context is years ago, most developing countries did not consumption. Not so good. Indonesia’s have anything you could say safely was any redistribution package, of tax transfers and form, any effort to directly redistribute in so on, is bringing the Gini coefficient down favour of poor people. That is strange. We just a little bit. now estimate that about one billion people Brazil, for example, is bringing it down a are receiving some form of help, from social whole lot more, but remember, to be fair safety net support, or social policies, or direct here, Brazil has a lot more inequality to deal intervention, a package of transfers, typically with. If the trend continues in Indonesia, the transfer-based policies that try specifically to country might be facing something like the reach poor people. The problem is that for same problem and will need a massive developing countries, that is not working redistribution effort. very well. The plot on the vertical axis is from Greater use of this intervention in the the aspired data managed by the World developing world: let me show you one Bank. On the vertical axis, we have safety picture (Slide 32). net coverage, the percentage of the

Slide 32

53 population covered by the safety net that I’m give you some examples from various talking about plotted against GDP per capita. countries: work in public services, cash Two things to note here: In general, poorer transfers, micro finance, workfare schemes, countries get lower coverage. One of the minimum wage rates if enforceable, ironies of being a poor country is that you are progressive income tax when possible, and less effective at reaching your poor. And that clearly and very importantly, strong tax is part of the reason why you are a poor enforcement, particularly on the rich. country in the first place. Also note, as you Expanding the administrative capability to move up the income ladder, countries get raise taxes efficiently and effectively is also better at reaching the poor. So the blue line going to be key. here is the coverage rate for the poorest 20 I will end with six recommendations (Slide percent. The lines are diverging. Actually for 37). Indonesia, the red line is for the population 1. Tailor policies to the reality of the settings. as a whole and the blue line is for the poorest Seems sort of obvious, does it not? But as quintile. The divergence is quite good. In I have just said, that’s not what’s other words, the coverage rate is what we happening a lot of the time. would expect of a country of Indonesia’s 2. Tap local information but with effective average income, but the coverage rate for state support. Sure, community-based the poor is a bit above what we would expect. development is a great idea but do not That’s good news. use it as an alternative to a strong local Good policy is about acknowledging the state. That is a terrible idea. You need a constraint. Administrative capacity is key. strong local state to monitor, to enforce, to Too often we see governments in developing deal with grievances, redresses, and so countries, at provincial or national levels, on. doing all kinds of stuff they just do not have 3. Focus on poverty reduction, not targeting. the capacity to do. So, first and most The whole targeting idea has gone too far. important, adapt to that capacity. I mentioned the problem of high marginal Also avoid high marginal tax rates. Perfect tax rates, but there are other issues too. targeting is one of the worst possible anti- The breakdown of solidarity that arises. poverty policies because of the incendiary You go to a village and you see two effect of perfect targeting. If you perfectly identical people, one treated differently target your poor, you are creating a poverty than the other because some local proxy trap. A one hundred percent marginal tax means test has favoured one over the rate on poor people–not a good idea. They other. We have gone too far on this. Relax will not get out of poverty that way. I think we about targeting. need to relax a lot about targeting. Perfect 4. Protect and promote. This is the smart targeting uses, in extreme meaning, exact social policy idea. Look for ways in which filling of poverty gaps, but we need to relax a we do protect poor people but we also lot about it. help promote them out of poverty. The whole set of menus of current policies Conditional cash transfer is an obvious is listed in the policies in practice now. I will example.

54 5. Monitor and evaluate. all governments had that website with that 6. And last, learn from mistakes. I teach page full of admissions of their mistakes. evaluation; I do evaluations a lot. One of On the first mistake of ‘give well’ or ‘give the frustrations I have all the time is directly’, the first mistake it acknowledges governments that only listen when the is that it didn’t hire a Ph.D. economist to news is good, your program is doing well help evaluate its policies. So, clearly, I am or terrific, your program is doing badly… even happier. there is only silence. We need to learn from our mistakes. There is an NGO in You can read more on this in my book. A East Africa called ‘GiveDirectly’. On its little advertisement, my latest book: ‘The website, one page is devoted to learning Economics of Poverty’, and the 2017 WIDER from their mistakes, which is terrific. I wish lecture. Thank you.

55 Video Streaming Wednesday 9 August, 10:45-11:00

Prof. Jeffrey Sachs, Columbia University The Brand Identity Guidelines

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VISUALS SU CODES We are an obsessed hank you forcreative welcoming studio. me and for letting me join by Skype. It is a great KASTUDIO www.suka.studio honour and privilege to be with you, with Minister Bambang Brodjonegoro, Tsomebody I admire tremendously, and I know Marie Pangestu is there, another great leader of your country whom I admire very greatly. I want to thank Indonesia and the government for taking this Sustainable Development Goals challenge so clearly, boldly and directly. When I speak around the world about the Sustainable Development Goals and about incorporating these Sustainable Development Goals in national strategies, I very often refer to Indonesia, and the role of Bappenas in particular, in sustaining, as the planning and coordinating ministry, and showing the way to take a complex set of objectives and integrate them fully into a national plan of action. I also very much want to commend the government for its reporting at the high-level political forum just a few weeks ago, where Indonesia presented the so-called Voluntary National Report, and for the great progress that Indonesia is making and the ingenuity of the government in placing this agenda so centrally.

56 So let me say that this Sustainable balance of challenges, for example, Indonesia Development Agenda is complex and still has a tremendous amount of rural Indonesia is very complex. There is no poverty, a high level of childhood stunting, question that Indonesia is one of the most indicating children growing up with under- complex nations. There is no other nation nutrition and with repeated bouts of disease. with 17,000 islands in a great archipelago; Often water-borne diseases come from a 260 million people, tremendous geographic lack of safe drinking water and inadequate diversity, ethnic diversity, religious diversity, sanitation. linguistic diversity, and so all of these Indonesia faces tremendous challenges in challenges that you face are microcosms of educational upgrading, as the average years global complexity. Very few countries have of schooling are still quite low. Indonesia of the rich biodiversity of Indonesia and the course aspires to reach fully developed direct vulnerability that Indonesia faces economic status and that would require a because, as an archipelagic country, significant increase in both the quality and Indonesia is of course enormously vulnerable quantity of education. to climate change, enormously vulnerable to Indonesia faces very significant infra- rising sea levels, enormously vulnerable to structure challenges because as an ocean acidification, enormously vulnerable archipelagic country the infrastructure needs to changes in land patterns and land use. So are especially complex, so many islands, so I sympathise because your sustainable many problems of marine transport, so many development challenges are indeed highly challenges of connectivity, of Internet, of complex. There is no simple formula for electrification. There might be great potential success. It will require a tremendous amount in Kalimantan, for example, but heavy of hard work and action for generations for population centres are in other islands. Indonesia to be able to achieve the triple Indonesia naturally faces big challenges of objectives of economic development, social urban sustainability because of continuing inclusion (including gender equality) and high rates of urbanisation, and therefore, the narrowing of income inequality, as well as need to develop adequate urban infra- environmental sustainability, which is so structure. crucial for Indonesia. Indonesia is vulnerable All these environmental challenges: SDGs because of your unique physical geography, 12, 13, 14 and 15, adapting to climate change, your dependence on agriculture and your especially given the vulnerabilities of the great pressures on land, with such a large physical infrastructure, in agriculture, in health, and densely settled population. So the in an era of ocean warming, acidification of the challenges are indeed very great. ocean and dying coral reefs, Indonesia has When we look at where Indonesia stands made great efforts to protect the coral and the in the Sustainable Development Goals, as marine ecosystems, as well as the terrestrial we have done in this year’s Sustainable ecology where Indonesia has faced tremen- Development Goal Index, I think it is fair to dous pressure of deforestation and loss of say that the challenge is quite wide spread biodiversity. across the goals and all of the dimensions; Across that whole range of challenges, the economic, the social and the you find that there is a need for inter- environmental dimensions. There is a real connected strategies. If I try to take a kind of

57 strategic view of how to address those approaches to ecology, to land management, challenges–of course I don’t want to compete to service delivery, and there I think you lead with or even second guess the elaborate to diversity of Indonesia’s universities; the strategies that Bappenas and other ministries University of Indonesia of course, and many have developed for this range of challenges– other outstanding universities could play a but I would like to emphasise a few obvious very significant and positive role. The key points. organisation that I help to lead for the United If I had to put my finger on one core Nations, the Sustainable Development Goals investment–of course there are many–but Solutions Network, is very proud to have so one core investment, I would emphasise many leaders of Indonesia as part of it, and I education, because the quality of education would hope that we could work together to and increasing the years of schooling will be help build the leadership of universities to be fundamental for achieving every one of the good partners with the government, with Goals. business and civil society in innovative If I had to put my finger on one area of approaches, in incubation of new companies, infrastructure investment, well I would say new applications, and new uses of information the connectivity of the Internet, because in technology. Indonesia Internet usage still remains quite If you look at the research and development low, maybe a quarter of the population. But budget of Indonesia as a share of national the potential for using the Internet for many income, it is still very low. I am pretty sure important functions–for government services, that I am up-to-date in saying that the R&D for voting, for civil registration, for effective spending as shared national income is still healthcare delivery, especially with less than half of 1 percent. I might be wrong community outreach, for improvements of and I apologise if so, but I believe that the educational quality, for financial sector R&D budget remains very limited and I would transactions and payment mechanisms, for look to the success of China, for example, or better information flows–I think are pervasive. of Singapore, more closely, and Korea, as So in my view the world is moving to an examples of countries that use research and information-based strategy across all sectors development as a leading edge for meeting of the economy. I would like to see Indonesia development challenges and diversifying the in the lead, using information technology economic base. So I expect forward-looking effectively, especially in the context of such a investments in higher education and in far-flung country, such a vast population, research and development would be very such difficulties of physically reaching many important features for your SDG strategies. parts of the country where the Internet, in Now of course your question would be, particular, could help tremendously in “That is fine, professor, but how can we medical services, healthcare delivery, possibly pay for all of those things?” I educational services, and simply accessing mentioned scale up of education, scale up of basic government services. healthcare, scale up of information and A third area that I would like to emphasise communication technology, and scale up of is your university sector and innovation, higher education and research and because Indonesia’s future will be based on development. Some of these things are not your capacity to develop new innovative so expensive, is part of the answer; and

58 some of these things can be spurred by country that is home to a richness of cultural private investments, is the second part of the and biological biodiversity, which the world answer–public-private investment. Some of admires, we really look to Indonesia for its these infrastructure improvements would leadership role as well as its successes at come as part of regional programs such as home. We need your voice for making the ‘One Belt One Road’ initiative that China recommendations of how more global is spearheading, and which bring a lot of cooperation can help you and can help the development potential. I encourage world to achieve these goals. Indonesia to work closely with the People’s We definitely need your voice on climate Republic as part of the One Belt One Road change urgently. And I say that because, strategy, as I regard it an important and sorry to say that there are few countries more positive initiative. vulnerable to ongoing climate change than Part of the answer comes through higher Indonesia, and Indonesia has not contributed tax revenue as a shared national income. in a major way to an on-going climate change Again, I apologise if I am wrong about the initiative but is suffering from the storms and data, but it looks to me like Indonesia’s tax increased instability coming. So we need revenue as a share of national income is your voice to help remind the world of the around 15 percent of national income, and if responsibility, worldwide, to get this under that’s correct, I would regard that as too low control and the vulnerability of your country for Indonesia to be able to mobilise the public to the ongoing changes that have taken place investment it needs to reach the Sustainable at the world level to climate and to the ocean. Development Goals Agenda. My own And when you speak, the world will listen and experience is that investments in Indonesia whatever I can do in my capacity as Special aiming for government revenues in the order Advisor to the UN Secretary General, I am of 20 percent to 25 percent of Gross National ready to help you in every way; to help you Product will probably be in the right range. achieve success and help your global policy Building a range upward for higher-level voice and recommendations be heard government revenue over the next 10 years, worldwide. so that it can be invested in health and Let me thank you again for all the hard education, in water, in sanitation, in improved work that is underway on the SDGs. We nutrition, in improved research–the areas know that you will host the IMF and the World that I outlined, I think will give very, very high Bank meeting next year, and you are going to social returns. draw attention to the challenges of financing So let me stop here, except to say that as the Sustainable Development Goals through one of the leading countries of the world, a a fair international system of financing, as member of G20, one of the largest populations well as through domestic efforts. I am eager in the world, if I am counting correctly, in to help you pave the way for that crucial fourth place in the world’s population, a meeting.

59 Plenary Sessions Graphic Recording

60 61

INSPIRE PLENARY: Inequality and Its Context

Wednesday, 9 August, 11.00-12.00 Java Ballroom

Key questions: •• Inequality is a major problem in the world today, not just in Indonesia. •• Inequality is not just an economic problem; it is related to multi-dimensional challenges, and this is not only in Indonesia. •• What, why, and what is the context of the inequality happening today? •• To what extent has knowledge and experience been inspiring us to address inequality in Indonesia?

Prof. Bambang P.S. Brodjonegoro, Ph.D, Minister for National Development Planning and Head of the National Development Planning Agency of the Republic of Indonesia ‘Inequality in Indonesia and the Government’s Policies of Reducing Inequality’

Chris Tinning, Chief Economist – Development, Department of Foreign Affairs and Trade, Australia How Increasing Inequality in Australia can be a Threat to Growth and Development and What We Can Learn from Australia about the Effectiveness in Australia’s Institutions and Their Tax System to Reduce Inequality

Hon. Tevita Lavemaau, Minister of Finance and National Planning of Tonga ‘Tonga Strategic Development Framework to Reduce Income Inequality and Create Greater Opportunities for Society’

Prof. Mari Elka Pangestu, Board of Trustees at the Centre for Strategic and International Studies (CSIS) Jakarta Does Increasing Global Trade Lead To Income Inequality In Indonesia? Challenges of Small and Medium Scale Industries in Indonesia to Compete In Global Trade

64 Prof. Bambang P.S. Brodjonegoro, Ph.D: Inequality in Indonesia and the Government’s Policies of Reducing Inequality The data show that the Gini ratio of Indonesia has been increasing, mainly due to the commodity boom, with the top layer of society having higher income and expenditure than the revenue/income growth of the lowest group. Improvements in each community group occur, but with different magnitude. This underlines the adoption of a policy aimed at reducing the Gini ratio by focusing on efforts to increase the income of people in the lowest 40 percent. In other words, inequality is parsed, and poverty is eradicated in a more aggressive manner.

•• Economic growth is actually enjoyed by all groups (in terms of increasing total revenue and expenditure), but the growth rates vary significantly and overall improvement rates are insignificant when compared to the growth achieved by the top income groups. •• The Indonesian Government’s intervention focuses on economic growth efforts for the population in the bottom 40 percent, in order to alleviate poverty more aggressively. In dealing with poverty, Indonesia is considered to have made progress, but it is not aggressive enough. •• The policy of reducing inequality includes the following steps: °° Reduce stunting rates and improve the health of children aged 5 years and under, including newborns. °° Reduce poverty through targeted but not excessive social assistance programs to avoid social upheaval. °° Provide job opportunities by encouraging employment growth, for example through labour- intensive industries, services and digital economy. Thus, government-driven investment is an investment that creates employment (labour-intensive). °° Reduce the inequality of wealth by ensuring that the rich pay actual taxes. °° Strengthen people-based industries through entrepreneurial development and strengthening of small industries. •• Smart practices for a highly diverse Indonesia will include: °° Programs that ensure income sustainability, thereby breaking the vicious cycle of poverty, for example through mentoring. °° Programs that set priorities, such as productive economic development programs in handicrafts, plantation, horticulture and livestock sectors. °° Programs that engage with a broad range of stakeholders, particularly the private sector, to ensure smooth implementation and commitment of local governments. °° Programs that increase community income through a variety of labour-intensive businesses and the development of local resource-based infrastructure (supported by simple infrastructure such as suspension bridges, rural roads, water supply, etc.). °° Programs that increase the participation of women in employment. °° In the agricultural sector, programs that increase the value of commodities by strengthening the value chain in the production process so middlemen will no longer have strong influence in the process.

65 Chris Tinning: How increasing inequality in Australia can be a threat to growth and development, and what we can learn from Australia about the effectiveness in Australia’s institutions and their tax system to reduce inequality Inequality affects individuals and communities and risks negative growth. Therefore, to overcome inequality a long-term policy strategy is required.

•• Inequality in Indonesia is high when viewed from global standards. •• There needs to be policy reform through increasing government revenues to provide and improve services to the community. •• Strategies for long-term policy include the following steps: °° Increase the growth of Gross Domestic Product (GDP), which is heavily influenced by logistic factors. °° Increase women’s participation. °° Increase government revenue (through tax). Indonesia’s tax ratio is still relatively low when viewed from global standards. This is due to the lack of workers who pay taxes. °° Ensure proper subsidy targeting and proper spending.

Tevita Lavemaau: Tonga Strategic Development Framework to Reduce Income Inequality and Create Greater Opportunities for Society Tonga is a country based on agriculture, fisheries and tourism, with poverty rates above 20 percent. The development planning approach used by Tonga is similar to that of Indonesia, which is to refer to the SDGs. Cultural awareness, disaster risk management, and climate change awareness are some of the important things for Tonga.

•• The current policy of Tonga is to apply a tax regulation that is based on people’s income, also imposing progressive taxes. Thus, workers whose income does not exceed a certain ceiling are granted tax exemption. •• In 2020 the target is that 50 percent of energy consumption in Tonga will be met by renewable energy. •• The Tongan development strategy has resulted in: °° Inclusivity °° Dynamic economy °° Inadequate infrastructure °° Good labour force and good employment opportunities °° Cultural awareness °° Good disaster risk mitigation management °° Integrated planning and implementation

66 Prof. Mari Elka Pangestu: Does Increasing Global Trade Lead to Income Inequality in Indonesia? Challenges of SMEs in Indonesia to Compete in Global Trade Inequality in Indonesia has risen sharply in the last decade (based on consumption data and the National Economic Survey). Although inequality usually rises with growth, at a certain point it will negatively affect growth and may lead to social instability, violence and conflict. We cannot just rely on the government: we as a community have taken part in it. A good example from private sector business: Go-Jek. Let’s be optimistic!

•• Causes of inequality that can be identified include: °° Quality of growth (boom, structure). °° Differences in access to education services, 40 percent of birth conditions and access to other basic services. °° Employment opportunities and work market rigidity. For example, an increase in the regional minimum wage, which is not accompanied by an increase in productivity, will increase the number of workers in the informal sector. °° Vulnerability to shocks (e.g., spikes in rice prices). •• A number of conditions are required for government programs to address inequality, such as: °° Program design should be based on a comprehensive, holistic and systematic long-term approach (e.g. the impact of a sustainable health program will take a long time). °° Proper targeting and proper identification of beneficiaries. °° The existence of commitment and political will (to be sustainable and consistent). •• Technology can help collect accurate information and data to inform targeting. •• Some good practice examples: °° Transformation to the modern community market can be done by: i) Proper targeting and adjusting to market needs. For example, do not just focus on physical improvement but also on the empowerment of traders and market management. ii) Developing diverse market structures (making different market designs by studying and adapting how local cultures perceive markets, with the help of experts in their fields). iii) Replicating and seeking partners, emphasising that markets should be profitable. iv) Support from the local government, as the budget needed for market transformation is very high. •• Village designers (99Designs) teach farmers, ranchers and construction workers, even hamlet heads, to create designs. •• The above good practices provide key messages–learning from mistakes, targeting, replicating, partnering with the private sector, and aiming for profit. •• Lessons from ‘traditional market revitalisation’: initially this program was only physical and then dormant after several years due to mis-targeting. What should be the focus is the traders/ merchants. So, what is needed is the empowerment of traders, not the physical condition of the market. •• Lessons learned from the post-earthquake situation in Yogyakarta: at that time market traders remained trading and there were still buyers. Visitors and market traders were mostly women,

67 while market facilities and infrastructure tended to be more male-oriented. The market design was then adjusted. More women’s toilets, child-care facilities, and others were built. Many parties contributed to this and it was carried out over three years. •• Technology can contribute, as it applies the principle of inclusion and because it can help correct market asymmetry.

INSPIRE

Inequality is analysed and poverty is eradicated in a more aggressive manner by focusing on improving the income of those in the bottom 40 percent through policy reform and increasing state revenues.

68 Galeri Inspire Plenary

69 INSPIRE I: Ending the Vicious Cycle of Corruption and Inequality

Wednesday, 9 August, 13.00-14.30 Java Ballroom

Key questions: •• Inequality is a global problem and is related to multi-dimensional challenges. •• Corruption is one of them–an extraordinary crime. What is and why does corruption have a big share in the problem of inequality, especially in Indonesia? •• What, why, and how has prevention and handling of corruption done so far? What targets have been achieved? •• What efforts have been made related to the involvement of corporations in corruption issues and why is this important? •• To what extent does this effort contribute to the reduction of inequality? •• To what extent have knowledge and experience helped face the challenges related to the issue of inequality for Indonesia’s future?

Agus Rahardjo, Chairman of the Indonesian Anti-Corruption Commission (KPK)

The impact of Corruption on Inequality

Zeger Van Der Wal, Lee Kuan Yew School of Public Policy and Asia Research Institute, National University of Singapore Four Innovative Ways to Fight Corruption

70 Sri Wahyuningsih, Indonesian Illegal Charges Eradication Task Force (Saber Pungli) Breaking the Vicious Cycle of Corruption

Sutarmidji, Mayor of Pontianak City, West Kalimantan Ending the Evil Cycle of Corruption and Inequality

Agus Rahardjo: The Impact of Corruption on Inequality There are a number of steps that can be taken to end corruption and improve the bureaucracy in Indonesia, which is often not effective due to inefficiencies and duplication of functions. Such steps include the adoption of transparent systems, such as the open budget system in West Kalimantan, the use of a single identity number, and the improvement of the Anti-Corruption Law so that the scope of its work in investigating losses suffered by the state is wider, and not limited only to state agencies. Implementation of a single identity number requires many things, such as data standardisation, integration of national data, coordination between ministries, agencies and regions, and civil registration from birth.

•• Data on the gap between the rich and the poor in Indonesia illustrates that a small number of people (1 percent) control more than half (50.3 percent) of the economy in Indonesia. •• Corruption is not Indonesian ‘culture’. •• The KPK’s task is comprehensive enough, from upstream to downstream including prevention, monitoring, pre-investigation and coordination. •• Indonesian performance as shown in the Corruption Perception Index has been relatively stable and the trend of improvement is rising. This reflects quite a lot of achievements that have been made since the 1990s. •• Inefficient bureaucracy and overlapping jurisdiction and authorities still exist in Indonesia, but no one demands responsibility for this. For example, the management of ‘Dana Desa’ is so large. We can follow the example of other countries that apply a ‘one institution system’ to handle all bureaucratic affairs, or adopt what West Kalimantan has done, which is to apply an open budget system. In practice, the open budget system in West Kalimantan allows not only People’s Representative Council–Dewan Perwakilan Rakyat (DPR) members to see the details of the budget, but the public also. •• Indonesia needs to learn how to improve the efficiency of its ministries and agencies, rather than creating new organisations to address issues every time new ones arise. •• Implementation of a Single Identity Number is important to facilitate tax collection, registration of tax payers, etc. It will in turn help with eradicating corruption. •• Amending the Anti-Corruption Law No. 20/2001 includes broadening the KPK jurisdiction to go beyond government officials and matters concerning state losses. Singapore has had corruption laws for the private sector since 1940. The practice of bribery in non-state trade is still widespread and still untouchable under the currently applicable legal framework.

71 Zeger Van Der Wal: Four Innovative Ways to Fight Corruption Four innovative ways of dealing with corruption include: 1) uncovering the iceberg, 2) involving the public, as applied in China, through an application that allows citizens to report corruption by uploading photos, 3) making use of technology, and 4) using instruments that suit the different characteristics of corruption.

•• Innovative ways to eradicate corruption include engaging the public and using technology. In these days of modern technology, many countries use technology (including the Internet) to record corrupt behaviour of public officials. China created an application that lets people report this by uploading photos. •• Another innovative way is to use a typical instrument tailored to the diverse acts of corruption. Corruption can be put into four categories: low frequency low acceptability (Type 1); high frequency low acceptability (Type 2); low frequency high acceptability (Type 3); and high frequency high acceptability (Type 4). For each category different approaches and instruments are required.

Sri Wahyuningsih: Breaking the Vicious Cycle of Corruption The following is a portrait of regional budgeting across the nation: In the 2017 APBD, only 23 provinces, 399 districts and 81 municipalities submitted their budget on time. Indirect spending is still high, at 59.61 percent, compared to direct expenditure, which stands at 40.39 percent. The degree of fiscal autonomy–the ratio of local revenues to total revenues–is still relatively low, at 33.85 percent on average. Average national capital expenditure amounts to only 18.3 percent of total expenditure, while the proportion for official travel, grants and social assistance expenditure is still relatively high.

•• Presidential Regulation 1987 Year 2016 became the basis for the formation of the Saber Pungli Task Force, which bears the function of intelligence, prevention, action and law enforcement. •• The Saber Pungli Task Force has the authority to: establish a system for preventing and eradicating illegal levies; collect data and information from ministries / agencies and other parties concerned, using information technology; coordinate, plan and implement raids; perform arrests; provide recommendations to the heads of ministries / agencies and heads of local governments to impose sanctions on the perpetrators of illegal charging in accordance with the regulation; provide recommendations on the establishment and execution of the Saber Pungli unit in every public service delivery institution to the heads of ministries / agencies and heads of local government; and conduct evaluation of illegal levy eradication activities. •• Efforts that have been made include: UPP establishment in provinces / districts / municipalities, rule making, system improvement and establishment of integrated teams; implementation of socialisation; and the signing of an integrity pact. •• The Task Force has conducted 917 red-handed arrest activities and assigned 1,834 suspects in a series of cases worth up to Rp17.6 billion. The imposition of disciplinary sanctions on civil

72 servants was conducted in accordance with PP 53 of 2010, followed by the issuance of PP 12 Year 2017 on the Development and Supervision (Binwas) of Local Government. The regulation sets forth sanctions against heads of regions and DPRDs who are convicted. •• Government programs to promote good governance include MoHA decisions requiring all local governments to implement regional planning and budgeting based on e-planning and e-budgeting. •• Portrait of local regional budgeting: In the 2017 APBD, only 23 provinces, 399 districts and 81 municipalities submitted their budget on time. Indirect spending is still high, at 59.61 percent, compared to direct expenditure, which stands at 40.39 percent. The degree of fiscal autonomy– the ratio of local revenues to total revenues–is still relatively low, at 33.85 percent on average. Average national capital expenditure amounts to only 18.3 percent of total expenditure, while the proportion for official travel, grants and social assistance expenditure is still relatively high. •• There are three fundamental weaknesses in APBD management: 1) budget realisation tends not to reach the 100 percent target, 2) the internal control system is still weak, and 3) non- compliance.

Sutarmidji S.H.: Ending the Bad Cycle of Corruption and Inequality West Kalimantan is a province committed to combating corruption because corruption inflicts loss on people. The approach used is to accelerate and improve the delivery of public services, for example by reducing licensing procedures, from 99 types of permits to 17 types of permits. This is done as an effort to minimise the chances of corruption, which are often present in long bureaucratic processes. Other things that are also done are open budget management and community involvement, especially in supervision. For example through scrutinising APBD, implementing Musrenbang (community development planning meetings), and utilisation of the Gencil application that allows the community to participate and monitor the performance of bureaucracy.

•• The West Kalimantan Provincial Government is one of the best public service innovation award winners, as nominated by the Ministry of Administrative and Bureaucratic Reform in 2017. Achieving improvements in public service delivery, among others, is done by cutting down the time for obtaining licenses in an effort to combat corruption, no matter how small the amount is. In practice, SOPs aimed at addressing delays in management will reduce the cost of retribution. The principle is that the shorter the process of obtaining public services, the less chance there will be for corruption. •• Community involvement is conducted through APBD careful review and joint evaluation of universities in the Musrenbang forum, with the aim that the development process, from planning to results, is conducted in a participatory manner. •• Another step that is also done is downsizing 99 types of licensing to 17 types, and the decision not to grant civil servants car facilities. •• The Ministry of Cooperatives and Small and Medium Enterprises (SME) some time ago did not approve the licensing of SMEs at the sub-district level. However, the Governor of West Kalimantan considered ease of obtaining licenses important for business people, especially if processing time could be cut short and the fee was affordable. In practice, SMEs have their

73 application for licenses processed without having to pay anything. •• Main points: °° Integrity must be maintained. °° Budget management should be transparent and open. °° Technology is applied to provide bigger access for public participation (they can help oversee the budget using the Gencil application). °° Community participation is important, especially in surveillance.

INSPIRE

Bureaucracy improvement, through the implementation of an open budget system such as in West Kalimantan, the use of a single identity number, as well as improving the delivery of public services, is part of efforts to minimise opportunities for corruption

74 Inspire I Gallery

75 INSPIRE II: The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality

Wednesday, 9 August, 13.00-14.30 Padang Room—World Cafe

Key questions: •• The global economic downturn is still at the point where it adversely affects the domestic economy amidst growing inequality. •• Opening wider access to financial services and encouraging social entrepreneurship is considered one of today’s potential solutions. •• To what extent is access to greater financial services beneficial to society? •• What is its contribution to tackling inequality? •• What and how to achieve access to good financial services to support the prevention of inequality and promote higher quality economic growth? •• To what extent can social entrepreneurship be realised, and what is its role in tackling inequality and building social solidarity among citizens?

Prof. Johannes Lindner, Teachers College of Krems, Vienna, Austria Financial Inclusion, Social Inclusion, Social Entrepreneurship and Education

Tristan Ace, British Council Social Entrepreneurship

76 Andi Taufan Garuda Putra, Founder of Amartha Amartha: Micro Finance Service

Hoonae Kim, Asia Pacific Regional Director, International Fund for Agriculture Development (IFAD) International Fund for Agricultural Development (IFAD)

Prof. Johannes Lindner: Financial Inclusion, Social Inclusion, Social Entrepreneurship and Education The role of young people is important, as they are the agents of change in bringing about changes through entrepreneurship, for example through the development of youth entrepreneurial competence.

•• There are three important aspects when addressing the challenges of financial and social inclusion: 1. The need for better structure of financial services, such as banks for employees, so that everyone can open and have an account at the bank. 2. Social entrepreneurs are needed as agents of change to identify problems in society and then find solutions. 3. The importance of organising entrepreneurship education. •• Entrepreneurship education can use the TRIO Model.

Tristan Ace: Social Entrepreneurship Social entrepreneurs can contribute to increasing incomes and reducing inequality by combining social values and creating promising markets. The success of social entrepreneurship in creating socio-economic impacts requires the support of related policies: 1) a better model of social entrepreneurship development by learning from other countries in Asia, 2) access to capital, and 3) improving the quality of education especially for young entrepreneurs.

•• The contribution of social entrepreneurs has the potential to increase income, thereby reducing inequality. But social entrepreneurs also face challenges, such as adopting social values, the need to create social impacts, and creating promising markets. The important thing in social entrepreneurship is the effort to combine social values and create a promising market. •• There are three important things for the development of social entrepreneurship. First, related to the model. Successful social entrepreneurs will have an impact on better social growth. For that, a better model of social entrepreneurship organisations is needed. A policy governing social entrepreneurs is needed in Indonesia. Policy development in various Asian countries that concerns social entrepreneurship is often overwhelming. This needs to be studied to see the relevance of whether it is likely to be applicable in Indonesia. •• Second, access to capital. A number of banks in the UK are designed to support social entrepreneurs. This is still hard to find in Indonesia because of the different banking

77 characteristics. •• Third, education. Improved quality of education, especially for young entrepreneurs, is needed to broaden the insights and knowledge of technology related to social entrepreneurship. In this context, efforts to improve the education system and improve the quality of the younger generation of Indonesians are expected to help achieve the Sustainable Development Goals.

Andi Taufan Garuda Putra: Amartha: Microfinance Service The microfinance model adopted by the ‘Amartha’ microfinance service is basically the provision of group collateral for business capital loans using gotong royong principles to make these financial services suitable for Indonesia. The working principle is to establish a connection between investors and borrowers of capital. There are three key components, namely social footprint, technology and determination of accurate and sustainable scale (an approach it adopts).

•• Amartha is a microfinance model whose practice involves lending to those who are less able to start small businesses, such as food kiosks, sellers in traditional markets, stalls and others. The loan is in the form of collective borrowing–those who want to take a loan are grouped and each group is assigned a person in charge. All processes are done using the Android operating system, starting from loan application until the process is completed. The borrower may be anyone and borrowing is open to any small business in any form with the loan amount not exceeding 5 million rupiah per individual. To ensure the borrower’s credibility, during the process of applying for the loan, applicants are required to undergo a psychometric test, which consists of a number of questions. The answers may help describe the character of the loan applicant. •• The mechanism Amartha uses in running the program begins by going to the village and distributing loan application forms to small-scale entrepreneurs who will be assisted by a field assistant when completing the form and submitting the loan application. •• Every week, many donors provide money up to Rp1 billion to Amartha to provide loans to micro-enterprises. •• What has been started by Amartha is expected to have a multiplier impact, i.e. more people will want to bridge micro entrepreneurs in rural areas to access capital to start small businesses. •• Amartha uses psychometric methods in selecting loan applicants before approving the application. Psychometric methods are believed to help reduce business risks more sustainably and are relevant for rural micro entrepreneurs.

78 Hoonae Kim: International Fund for Agricultural Development (IFAD) Development issues arise because the existing system is not working. Technology can potentially help to reach out to the whole region and provide wider access to farmers. In India, the majority of microfinance borrowers are women. Based on a survey, women are responsible borrowers because they use loans well, for the purpose of the loan, and return the money.

•• Data shows that 80 percent of food is supplied by smallholder/individual farmers, and only the remaining is supplied by supermarkets. •• Inclusive financing can be a viable solution for improving farmer welfare and in turn reducing inequality. •• In India, IFAD provides microfinance to a majority of women, because a number of case studies show that women can manage loans better than men. •• Technology has tremendous potential to reach people in remote areas. •• Workers returning home are encouraged to own productive assets. By transforming the remittance into productive assets, migrant workers can be empowered so that when they return to the country, they will not lose their livelihood.

Responses: •• Access to microfinance services for small entrepreneurs / home businesses is helpful. But attention also needs to be given to people with disabilities who want to start a business, as well as farmers and fishers. They need to be provided with access to financial services and coaching about entrepreneurship. People with a disability often hesitate to start a business because of their limitations. •• Small entrepreneurs / entrepreneurs need to have financial management training so that their business will not fail mid-way. •• Provide open access to banking and technology for all layers of society, including small entrepreneurs.

INSPIRE

Social entrepreneurs are needed as agents of change. The innovation of microfinance services includes three key components, namely social footprint, technology and appropriate and sustainable scale-up (business approach).

79 Graphic Recording

80 81 82 83 Inspire II Gallery

84 INSPIRE III: The Future of Smallholder Farmers: Feeding the World and Sustainable Income

Wednesday, 9 August, 13.00-14.30 Medan—Fish Bowl

Key questions: •• There are currently millions of hectares of land and seas that have not been optimally utilised. On the one hand there are millions of farmers and fishers living on the poverty line because of insufficient work. On the other hand, the demand for food from agricultural products and from fishers continues to grow daily. This is why smallholder farming is potentially a tremendous opportunity, as well as a big challenge for Indonesia. •• While inequality has already occurred, what can be the key instrument to minimise inequality while optimising the potential and opportunities available? •• The land redistribution policy is known to be quite effective in many countries. What and how does the policy work effectively? •• What about agrarian reform in Indonesia? •• What about the policies to alleviate poverty in the fishing environment, while increasing the potential of Indonesian marine products? What breakthroughs are needed and to what extent can they be implemented? •• To what extent have knowledge and experience been able to provide support for policies that are more aligned to the interests of farmers and fishers, including women’s groups, particularly in addressing issues of inequality for Indonesia’s future?

85 Tomy Perdana, Senior Lecture, Universitas Padjajaran, Bandung Innovation and Value Chain and the Role of Universities in Improving Farmers’ Welfare

H. Andi Fahsar Mandin Pandjalangi, Head of Bone District, South Sulawesi Innovation in Bone District, South Sulawesi, to improve the Lives of Farmers

Nuraeni, ‘Fatimah Az Zahra’ Cooperative, Women’s Fishermen Group, Paotere Village, South Sulawesi The Role of Women in Improving the Welfare of Fishermen through Women’s Empowerment and Development of the Fatimah Azzahra Cooperative

Mohasin Kabir, Head of Portfolio, Promoting Rural Income through Support for Markets in Agriculture (PRISMA), Australia-Indonesia Partnership for Rural Development Coffee in Flores: A Story of Exporters working Together with a Grassroots Community

Tomy Perdana: Innovation and Value Chain and the Role of Universities in Improving Farmers’ Welfare The innovation and value chain approach can potentially increase the added value of agricultural commodities, as well as strengthen the role of universities as a supplier of information and innovation for farmers. It needs a specific approach such as a market- based approach to simplify the value chain through a shared value creation process between farmers and intermediaries or direct sellers. In this case, it is important for farmers to be able to access technology and technology literacy.

•• Local governments can provide market access. In addition, the government can provide access to capital. For farmers, access to finance and markets is much more needed than direct capital grants. •• How can traders and farmers work together? Cooperation between farmers, traders, markets, supermarkets, etc. should be planned and facilitated, and it should not be merely ‘forced by urgency’. •• Increased welfare can be evidenced in increased trading volumes. Farmers who were assisted and coached managed to increase the volume of crops by more than 50 percent, thereby increasing their income by 100 percent, as they can now sell their products to the modern market. In the past, they only sold to traditional markets. •• Collective systems are built as a prerequisite in the activities of farmer groups. There are 250 farmers in one district. Every week farmers are facilitated to grow and harvest so their business can be sustainably managed. •• Research institutions should ‘return’ to villages to live and work with farmers to make the results more effective. •• It is time for all parties to synergise to create greater value in the agricultural sector.

86 H. Andi Fahsar Mandin Pandjalangi: Innovation in Bone District, South Sulawesi, to improve the Lives of Farmers The Bone District Government has created and implemented a number of innovations that have been successful in improving the livelihood of farmers. The volume of crops has increased 100 percent to 120 percent and harvest quality has also improved.

•• Characteristics of farmers in Kabupaten Bone: most live in remote areas with farmland of approximately one hectare each. •• A number of successful breakthroughs in Kabupaten Bone which have made farmers live better include: 1. Increase their understanding that the source of income is in the agricultural sector. About 80 percent of Bone’s population are farmers. Their mindset was changed. The government supported the mechanisation of agriculture for farmers who used to have a conventional mindset and do farming traditionally, and supplied superior quality seeds. Production increased from 3 to 5 tons per hectare to 8 to 12 tons per hectare, and the quality improved. 2. The ability of farmers to prepare fertilizer used to be very limited, especially in remote areas, causing the price of fertilizer to be higher than the highest retail price. The government provides transportation subsidies for farmers in remote areas when they have to buy fertilizer. 3. Counselling and facilitation provided to farmers do not just cover things related to agriculture. Other topics, such as animal farming and artificial insemination for livestock have also been covered. •• The government participates in providing education and motivation to traders to buy at high prices, even above the price set by Bulog. There has also been emphasis on the importance of the safe zone. Bone is currently capable of achieving production of up to 1 million tons per year. •• Equally important is the role of self-help extension workers who were locally raised in the area to motivate the community. •• The agricultural sector should not be underestimated, as the sector plays a very important role in determining the growth of welfare, especially in an agrarian country like Indonesia. In that context, Indonesia actually relies on the availability of food. Thus, all parties should view the agricultural sector as one that can give Indonesia a good name and reputation.

Nuraeni: The Role of Women in Increasing the Welfare of Fishermen Through Women’s Empowerment and the Development of the Fatimah Azzahra Cooperative The Fatimah Azzahra Cooperative was built with the aim of overcoming the difficulties experienced by fishermen’s wives as a result of poverty, domestic violence, lack of skills, and difficulties in financing their children to go to school. Punggawa or middlemen also become a challenge in breaking the vicious cycle due to the practice of borrowing money from middlemen in the community.

•• In South Sulawesi, the financial dependence of fishermen on middlemen is very high. This

87 has led to a difficulty in eradicating poverty, thereby making fishermen more motivated to access financial resources provided by banks. •• Such poverty can lead to domestic violence, sexual violence, and other factors that position vulnerable women as victims. •• The initial and main activities of the Fatimah Azzahra Cooperative are to share the skills of social entrepreneurs with coastal women so that they can process seafood into added value, such as making fish floss. Furthermore, the Fatimah Azzahra Cooperative established schools for coastal children, providing sustainable and environmentally friendly fishing education, and rehabilitating women and child victims of domestic violence in coastal areas. The coastal women’s schools have given women information on accessing capital other than through a middleman. This means educational efforts and welfare improvements are closely related. •• Looking back at the success of the Fatimah Azzahra Cooperative in improving women’s welfare, it is clear that money is not the main goal. Confidence and belief constitute the main capital in opening a business so that opportunities to improve women’s welfare improve. •• There are no specific facilities for extension workers. Difficult life experiences mean women need to be creative to survive and conduct business. It took extra efforts to engage women’s business groups before the cooperative was founded. •• Motivation for joining the cooperative started from the urgency to survive. For fishers, being a fisher was the only available livelihood. In the past they had difficulty accessing capital, but eventually they could set up their own cooperatives. Now that it has been successful, support and assistance are pouring in.

Mohasin Kabir: Flores Coffee: Exporters’ Experience in Working With Communities at the Grassroots Level Promoting Rural Income Through Support for Markets in Agriculture (PRISMA) is the largest DFAT economic development project in Indonesia. This project initiated an agricultural revolution by changing habits. PRISMA focuses on commodity production with strong market demand, such as coffee. Official data shows that Indonesia is among the largest coffee-producing countries and has great potential to supply the world’s coffee demand. However, the rate of increase in national coffee consumption is higher than the increase in productivity. Thus, in 2023 Indonesia will become a net importer of coffee beans. This is why technological change is needed to increase coffee production.

•• What conditions or challenges does the PRISMA project face? Inadequate farming knowledge and difficult access to formal sources of funding are obstacles needing efforts to increase potential coffee production. •• Most farmers do not do post-harvest processing, but under a partnership with PRISMA, they are starting to do so. •• Increasing the national productivity of coffee beans is difficult because, among others, it is difficult to produce coffee in Flores, although its productivity is actually the highest. Flores coffee has a high potential to penetrate international markets as specialty coffee. •• PT Indokom provides collateral for the Bank NTT for term loans. •• In addition to technological factors, there are also cultural factors. For example in Madura,

88 farmers rely on the opinions of religious teachers. We invite all community leaders to educate the PRISMA community, from customary leaders to mosque leaders, so that people change their mindset and habits and are willing to apply technology to agricultural production by utilising technological change. •• Through PRISMA, 13,000 households in Flores obtained information, training and market access–and their productivity increased by 26 percent.

Responses: •• Women’s farmer groups need to be strongly empowered so that they can educate men’s farmer groups. The passion for agriculture among young people still exists. They help their parents farming after school, so there are not many problems associated with this. •• The agricultural sector in Indonesia is still offline. Padjadjaran University built a start-up that uses online technology to support agriculture. The co-founder is a 21-year-old woman. By involving technology, it is expected that the millennial generation’s active role in agriculture will also increase. •• Countries in Europe are undergoing a ‘fourth industrial revolution’ with the development of the Internet, but this revolution did not kill the previous revolution, manufacturing. With the growth of the manufacturing sector in Indonesia, hopefully cross-expertise can be utilised so that the agricultural sector can further grow. •• Assets are often a problem for women, for example female heads of households and widows. What is worse, women in remote areas are often left behind when accessing technology. Many cannot use mobile phones for e-banking because there is no signal. The government needs to provide support in the form of more access to financial services to women, especially heads of households. •• Biodiversity farming can increase the exploration of biodiversity so that the welfare of farmers and fishers can be improved. To explore the sea, coastal areas, coconuts, shellfish, crabs and others, the private sector needs to be embraced.

INSPIRE

Women’s farmer groups can educate male farmers. Assistance is key to improving productivity and farmers’ ability to access finance, markets and technology.

89 Graphic Recording

90 91 Inspire III Gallery

92 INSPIRE IV: Livable and Sustainable City for Growth and Social Equity

Wednesday, 9 August, 13.00-14.30 Retreat Lounge–Conversation Cafe

Key questions: •• Urban growth in Indonesia in the last decade has shown development optimism. The heads of some regions play active roles, with many achievements and innovations. •• On the other hand, urban inequality is a separate, unmet challenge. It is reflected in the higher Gini index in urban areas than in rural areas. •• What and why does this condition exist? What are the key contributing factors? •• Based on experience, to what extent do the results of research institutes support policy makers and are utilised? •• Based on experience, how can this inequality issue be addressed and to what extent are people’s fundamental rights exercised to narrow the inequality gap? What are the innovations designed to address urban inequality and what is the extent of their contribution?

93 Prof. Mike Douglass, Lee Kuan Yew School of Public Policy and Asia Research Institute, National University of Singapore From Liveable to Progress Cities: Inclusion, Equity, Social Life and Sustaining the Environment in Asia

Oswar Muadzin Mungkasa, Deputy Governor of Jakarta, Spatial and Environment Affairs Resilient Jakarta: Liveable and Sustainable City for Growth and Social Equity

Wicaksono Sarosa, Chairperson of the Executive Board, Kemitraan-Habitat Can Urban Development Help Address Inequality?

Paulista Bunga Surjadi, Kota Kita Foundation Towards an Inclusive City: Data, Participation and Planning in Indonesian Cities

Mike Douglass: From Liveable to Progress Cities: Inclusion, Equity, Social Life and Sustaining the Environment in Asia Asian countries are going through a massive and rapid urbanisation process. To deal with this phenomenon, a liveable and humane city, called a progressive city, is developed. A progressive city has four main pillars: 1) inclusion in public and political life, 2) socially just and distributive, 3) active community life, and 4) environmentally friendly and healthy. Appreciation should be extended to cities engaged in progressive development.

•• Currently, most people choose to live in urban areas, where slums expand, poverty increases and disasters happen more frequently. More attention is given to festivals and public celebrations. At the same time, poverty only receives scant attention. •• One day, all Asian people will live in urban areas. Today, some cities develop better than others. Urban development has not aimed at progressive cities. •• A progressive city is a city that involves its people in public and political life, guarantees equal justice in a community’s social, economic and business life, has friendly and warm characteristics with numerous public spaces to socialise, has participatory art and cultural events, and has a healthy environment. •• A city’s success in reaching the target of progressive city may be traced from some of the city’s indicators and policies. Cities considered successful include Seoul, Hanoi and Taipei. •• A change of paradigm of a city and discourse on a progressive city must be consistently promoted. Beautiful, with high-rise buildings, should no longer be an indicator for an award- winning city. Instead, cities with progressive development deserve to win awards.

94 Oswar Muadzin Mungkasa: Resilient Jakarta, Liveable and Sustainable City for Growth and Social Equity Jakarta is the biggest city in Southeast Asia, with 10.1 million people (2015). Situated at the delta of 13 rivers, 40 percent of Jakarta’s land is located below sea level, making this city prone to floods and other environmental issues. Jakarta has some success stories in life quality improvement, as well as having liveable and sustainable urban development. The mandatory criteria are strategic leadership, fulfilment of public health and welfare, public economy, and environmentally friendly infrastructure.

•• Jakarta is preparing to move from a liveable and sustainable city to a resilient city, which is capable of surviving threats. In a resilient city, all of the individuals, communities, government and support systems are able to remain functioning during threats, such as acute shocks (earthquake or any other sudden disorders) and chronic stress (daily stress like traffic congestion and floods). A resilient city always improves itself to plan for the future. •• A resilient city aims to improve people’s life quality and support growth in the following framework: °° Strategic leadership promoting involvement and empowerment of different stakeholders in a long-term integrated plan; °° Fulfilment of health and welfare by providing people’s basic needs, supporting livelihood and employment, and guaranteeing public health services; °° Public economy; for example, support economic welfare through a cohesive community actively involved in the city’s development; °° Environmentally friendly infrastructure development by providing reliable communication and mobility facilities and increasing the city’s assets. •• The four criteria above must be satisfied in order to become a liveable and sustainable city. One of the lessons learned is how to humanise a city by serving middle- to low-class people, elderly people and people with disabilities. •• Below are some efforts to make Jakarta liveable and sustainable: °° Construction of a Child-Friendly Integrated Public Space (RPTRA), Kalijodo, as a city park where the surrounding community may interact. It is an effort to provide an open space for poor people in order to preserve equality, fairness and values; °° Distribution of the Smart Jakarta Card to provide financial aid for poverty-stricken school and university students. University students living in flats in Jakarta may attend university abroad without any charge; °° Jakarta Cares is a free pick-up service for poor elderly people.

Wicaksono Sarosa: Can Urban Development Help Address Inequality? Urbanisation is a process of movement of people from villages to cities; a shift from rural to urban areas is inevitable. Inequality, which frequently accompanies urban development, must be addressed by developing urban sustainability. In urban sustainability, there is a balance between environmental, social and economic features in sociocultural aspects, between generations, living beings and spatial and socioeconomic aspects.

95 •• History shows that urban development is often related to an increase in inequality. •• Urbanisation may address inequality by improving welfare and promoting equality. •• Urbanisation is an inevitable phenomenon with movement of people from villages to cities and shifts from rural to urban areas. •• There is a strong correlation between urbanisation levels and national revenue levels. A country with high urbanisation levels usually has a high Gross Domestic Product (GDP). In Indonesia, a 1 percent urban population increase will increase GDP by 1 percent. However, it is lower than Thailand and China. •• Urbanisation in Indonesia does not sufficiently increase people’s welfare. The Gini coefficient of Indonesia increases in line with the increasing number of people moving to urban areas. Invaluable contributory urbanisation happens when people move to cities to increase their income and the villages’ welfare increases. •• A case study in China shows that farmers, whose agricultural land changes due to urbanisation, get apartments with good facilities. The farmers attend training in order to get jobs in the city. Their welfare becomes higher than when they worked as farmers. •• There are five dimensions to urban sustainability: between generations, sociocultural, between species, spatial, and socioeconomic. Therefore, in sustainability, there is a balance between environmental, social and economic aspects. Anything built now should not harm future generations and the environment. •• Research shows that in sustainability, every measure taken does not decrease people’s welfare. If resettlement is mandatory, the welfare of resettled people must increase.

Paulista Bunga Surjadi: Towards an Inclusive City: Data, Participation and Planning in Indonesian Cities? A liveable city means a city that considers its inhabitants as collaborators and the inhabitants have a sense of belonging.

•• A liveable city is also an inclusive city. Therefore, city planning must also be designed through an inclusive process. •• In big cities in Indonesia, inequalities exist in spatial and information access, in addition to other issues such as traffic congestion, floods, pollution, poverty and lack of public services. •• People in liveable cities are aware of their rights as citizens. •• In programs relating to urban data, Yayasan Kota Kita works in Solo and Banjarmasin to educate people, for example on planning and development through discussions as well as training in the form of urban social forums where people can discuss different types of urban issues.

Responses: •• Urbanisation happens because of limited opportunities in villages, making villagers move to cities. If cities fail to properly respond to this issue, people will be distributed to the informal sector. This will then result in structural poverty and domestic poverty. What kind of training can be provided so that they can find decent jobs and lives in cities? Creative communities

96 are one option to improve economic resilience of a village undetected by the government’s radar. It aims not to empower, but to involve. Empowering organisations can empower people. Empower people according to their creative ideas to hit the right target. •• Training is useful for long-term job skills. The current need is at the level of supervisor and middle manager. Vocational and skills training centres do not always provide training at the required level. The formal sector will not be able to accommodate the incoming labour force. The government must reduce business obstacles. Research has been conducted to try to understand the impacts of urbanisation on other aspects, however it has not been completed and shared–it is still a work in progress. •• Is there any new way to make the government cooperate with the people? It seems that people have not grasped the government’s work process. They have many ‘languages’, while the government has one ‘language’. The government must be able to translate people’s ‘language’. It seems that people are overlooked because their ‘language’ is different from the government when they convey their aspirations. People must be involved, for example by actively reporting the government’s work results. •• Allow the introduction of a human approach to development in Indonesia as part of the ecosystem in urban development. For example, grey water management in Melbourne and disaster-proof public parks in Japan. It is necessary to make Indonesia adaptive to various conditions in the future.

INSPIRE

Keys to liveable and sustainable city development include: 1) strategic leadership; 2) inclusive, socially just and distributive fulfilment of public health and welfare; 3) environmentally friendly; and 4) active community life, including participation in planning and management of urban issues.

97 Graphic Recording

98 99 100 101 102 Inspire IV Gallery

103 INSPIRE V: Look to the East: The Future of Indonesia

Wednesday, 9 August, 14.45-16.15 Java Ballroom

Key questions: •• For the last three years, the government of Indonesia has been intensifying infrastructure development in the eastern part of Indonesia. Moreover, in the Nawacita program (Nine Priorities), President Joko Widodo has clearly specified Papua as one of the development priority areas. •• Why Eastern Indonesia? What happens there and what potential does it have? •• To what extent does inequality exist compared to other parts of Indonesia? What has been going wrong? •• Based on experience, how has this inequality issue been addressed and to what extent are people’s fundamental rights exercised to narrow the inequality gap? What are the innovations designed to address urban inequality and what is the extent of their contribution to address inequality in East Indonesia? •• To what extent do the results of research institutes support policy makers in East Indonesia? To what extent are they utilised? •• What are the innovations offered and to what extent do they inspire other areas?

104 Frans Lebu Raya, Governor of East Nusa Tenggara Development Policies in East Nusa Tenggara

Hermien Kleden, Executive Board TEMPO Media Group Let’s Go East

Noldy Tuerah, Eastern Indonesia Researchers Network (JiKTI) Go East: Build Indonesia from the East

Frans Lebu Raya: Development Policy in East Nusa Tenggara East Nusa Tenggara (NTT) has long been known as a poverty-stricken and disadvantaged area. Only one city in NTT is categorised non-disadvantaged. NTT adopts a village-based integrated development policy. Primary focus is given to the development of village potential. NTT is determined to become a ‘corn province’, ‘cattle province’, ‘marine and fishery province’, ‘tourism province’, and ‘cooperative province’.

•• It is necessary to find village-based solutions to problems in villages. •• Based on the concept, NTT developed a strategy called Village-Based Integrated Development, which means development based on village potential (flagship commodities). •• NTT was developed ensuring strong community institutions, which will automatically strengthen the community’s bargaining position. •• The spirit of ‘Anggur Merah’ (Budget for the People Heading to Welfare) is a program launched by the Governor of NTT to improve public self-reliance in fund management through business groups. Each village is given Rp 250 million to build a self-reliant and efficient village as a form of public trust in their independent fund management. The ‘Anggur Merah’ program has been conducted since 2011 (the Regional Budget was Rp 1.8 trillion) together with the assignment of one university graduate as village facilitator. •• In the ‘Anggur Merah’ scheme, funds may only be used for productive economic interest. Therefore, the most frequently emerging business group is the cattle business. The fund is managed in a revolving system within the group (fund recipients are expected to repay the loan to the group). •• There are around 4,000 cooperatives in NTT. The high number of cooperatives in NTT reflects a preference for establishing cooperatives over village-owned enterprises, aiming to uphold local ideology and wisdom on the basis of ‘mutual cooperation’. •• Regional government cooperates with local banks. •• The long-term goal is to establish NTT as a new tourist destination.

105 Hermien Kleden: Let’s Go East The UN has determined five kinds of literacy: reading, writing, financial, social and moral. Amartya Sen, a Nobel winner, says poverty is not merely about lack of food, but also lack of access to information.

•• High interest in reading among children in NTT can become a major asset for human development. However, it is not balanced with supporting infrastructure, for instance, there is still a scarcity of books in schools. •• Literacy may open up greater opportunities. Culture affects the structure of language, writing and thinking. Therefore, media plays a vital role in this era in bringing literacy to the grassroots level. Media defeats books when it is so much easier to access media than books. •• Media in literacy may replace the previous traditional role or relying on books to read. •• In the long run, media may play a role as the vanguard of free literacy education to build an anti-hoax generation. In NTT, information can trigger the growth of a small community.

Noldy Tuerah: Go East: Build Indonesia from the East Like a vessel, Indonesia tilts westward, therefore the right strategy is required to develop the eastern part of Indonesia. This may rest on the development of Special Economic Zones and Industrial Estates, an international hub port, a power plant and telecommunication network, human resource development, and the regional government’s active roles and innovations.

•• To develop the eastern part of Indonesia, joint efforts are required by involving different elements, starting from the central government, regional government and private sector. •• There are five major keys required to develop the eastern part of Indonesia: special economic zone (SEZ) and industrial estate (IE), international hub port, power plant and telecommunication network, human resource development, and the regional government’s active roles and innovations. •• Some challenges are found and may be identified as a series of efforts necessary to realise five principal keys: °° Establishment of SEZ and IE administration body to smooth the land acquittal process. Simplification of complicated regulations for private port administrator. °° Investment development and improvement in geothermal power plant and incentive for investors/private sector. °° Human resource development as well as minimum service standard development for education and health. The two activities may be conducted through development of vocational schools according to industrial and market demand, a community college to support SEZ/IE and logistics, and also implementation of vocational training. °° Promote active roles and innovation of regional governments and establish a land bank for infrastructure development. At the same time, to minimise obstacles in investment and regional regulations resulting in a high cost economy, it is necessary to implement e-government in public service.

106 •• The role of companies (private sector) in ‘investment’ in regions often results in sharper disparity/inequality, such as in some mining areas. Therefore, community engagement is vital to mitigate the problem. •• Conclusion: developing East Indonesia means developing Indonesia to address region-based inequalities, as this incorporates a development effort to ‘recover the vessel’s balance’.

INSPIRE

Development in East Indonesia is implemented through the right strategy, such as increasing information access, regional and infrastructure development, HR development, local potential development, including village-based development, and regional government innovation improvement.

107 Inspire V Gallery

108 INSPIRE VI: Combating Poverty and Inequality through the Provision of Basic Services

Wednesday, 9 August, 14.45-16.15 Retreat Lounge–Conversation Café

Key questions: •• Fulfillment of people’s fundamental rights remains the biggest challenge for the government of Indonesia today, at national and sub-national levels. •• Failure to fulfill people’s fundamental rights contributes to inequality. To what extent does it affect the inequality level in a region? •• What efforts are possibly made to increase the fulfillment of people’s fundamental rights in order to narrow the existing inequality gap? •• What are the innovations made and to what extent do they contribute to addressing inequality? •• To what extent do the results of research institutes support policy makers and are utilised? •• What are the innovations offered and to what extent may they be realised and inspire other areas?

Margareth Grosh, Lead Economist for Human Development, World Bank The Experiences of Some Countries in Fighting Poverty

Prof. M Niaz Asadullah, University of Malaya, Malaysia How Can Malaysia Reduce Inequality through Education?

Candice Vianna, the Embassy of Brazil Combating Poverty and Inequality through the Provision of Basic Services: the Case of Brazil

109 Margareth Grosh: The Experiences of Some Countries in Fighting Poverty Temporary unconditional cash transfers can alleviate poverty and, if managed properly, may address long-term inequality and poverty. Brazil’s experience shows that one of the requirements for successful temporary unconditional cash transfer is the adoption of ‘one data’ policy to support the cash transfer process.

•• Temporary unconditional cash transfers to poor people can reduce inequality. The controversy is that such cash transfers to poor people during their productive years will make them less productive. •• For adults, the impact of temporary unconditional cash transfers is more or less the same. However, for children, such cash transfers may reduce the demand to earn income, and thereby increase their opportunity to go to school. Some recipients of temporary unconditional cash transfers use the money to buy food. •• Temporary unconditional cash transfers for housewives are used for education, health, and household needs. Education and health can cut the poverty chain. This is a fundamental change, which can be further encouraged through temporary unconditional cash transfers to the right recipients. •• Poverty can be alleviated through a temporary unconditional cash transfer program, which is successfully executed in Brazil and Malaysia. •• The success of the temporary unconditional cash transfer program depends on the recipients and the community context. If the cash is given to the head of a family, it will usually be used to start a business. Cash for housewives is used for welfare expenses, namely their children’s health and education. Basically, such cash transfers are consistently monitored and supervised. •• In Cimahi (West Java), temporary unconditional cash transfers have not been effective. The grants have instead shifted to substitute programs, such as the Smart Indonesia Card, Health Indonesia Card, construction of sanitary facilities, etc.

Prof. M Niaz Asadullah: How Can Malaysia Reduce Inequality through Education? Lessons for Indonesia To address inequality, equal access to basic education must be followed by equal access to secondary education. In addition to education quality, human productivity increases must be constantly boosted. The keys to inequality reduction are expanding the ’middle class’ and investing in post-secondary education. Education is the strength that can promote equality, and education improvement is translated into all policy documents. Fund allocation for education is big in a long-term program.

•• A Pew survey shows that Malaysians are concerned about the increasing level of inequality. •• The first challenge in Malaysia is to address inequality in post-primary education. The number of post-secondary education graduates increased in the workforce (1990-2010), but is left behind in tertiary education (2012). Participation figures increase and inequality grows more

110 between groups with different incomes, than between ethnic groups. •• The second challenge is to increase learning levels and reduce inequality in education quality. The third challenge is to increase labour income and the growth rate of job opportunities. The fourth challenge is to reduce inequality in the allocation of skills, jobs and social opportunities. •• There are some lessons learned. First, merely equalising access to basic education is not sufficient to reduce economic inequality. Inequality of access to post-secondary education must also be addressed. Second, education quality improvement is required to increase human productivity. However, learning-level improvement and learning inequality are not merely about budget allocation. Third, increase the workforce portion of GDP by creating jobs with higher wages: prioritise jobs with knowledge and implement pro-labour policy reform. Fourth, affirmative policies may create new inequality, namely different access to jobs in the government, declining quality of public agencies, and regional inequality. •• Poverty alleviation is possible. In Brazil, a poverty alleviation program for 15 years has proved successful in reducing the number of poor people from 50 million to less than eight percent of the total population.

Candice Vianna: Combating Poverty and Inequality through the Provision of Basic Services: The Case of Brazil Economic growth may not alone reduce poverty and inequality. A temporary unconditional cash transfer program in Brazil is successful because it has three dimensions, namely direct poverty alleviation, public access openings to social rights (education and health), and a complementary program to address poverty traps. The supporting factors are integration of different social policies under a simple national program, unified registry, and decentralisation: the roles of federal, provincial and municipal governments.

•• The poverty alleviation program in Brazil is implemented in the following ways: 1) include poverty alleviation in the political agenda, which is further translated into policy formulation and budget preparation; 2) integrate the program within social policy; 3) apply a decentralisation policy; 4) encourage social participation–civil society plays its role in planning, review and implementation. •• In Brazil, cash transfers started in 2003 in different amounts between recipients based on several variables, like the number of children in one household. •• Bolsa Familia in Brazil is a program of direct income transfer. This program is successful because it has three dimensions, namely direct poverty, opening up access to education and health as public social rights, and different complementary programs to eliminate the poverty trap. •• There are other supporting factors behind the successful program: integration with different social policy under a simple national program, unified registry, and decentralisation encouraging the roles of federal, provincial and municipal governments in program implementation. •• The program’s beneficiaries are 13.5 million families. The real impact is drastic poverty reduction from a normal to an absolute level: 36 million people are freed from poverty. Other impacts are apparent in education and health and access to other social policies. People do

111 not find disincentive or obstacles to work. Budget for this program is Rp115 trillion per year, or around 0.5 percent of GDP.

INSPIRE

Keys to reducing inequality are: 1) expand the ‘middle class’ and invest in post-secondary education, 2) increase workforce productivity, and 3) integrate social aid supporting a ‘one data’ policy for aid distribution.

112 Graphic Recording

113 114 Inspire VI Gallery

115 INSPIRE VII: Inequality of Opportunities in Indonesia

Wednesday, 9 August, 14.45-16.15 Padang Room–World Cafe

Key questions: •• A continued weakening global economy affects domestic economy and is accompanied by more apparent inequality at the domestic level. •• It presents new challenges at the global and domestic levels in the form of threats to pluralism, stronger radicalisation issues and declining social inclusion. •• What can be offered to respond to these challenges? •• To what extent do the results of research institutes support policy makers in facing multi-dimensional challenges? To what extent are they utilised? •• What are the successful examples and to what extent can they inspire people to respond to the multi-dimensional challenges in Indonesia?

Arief Anshory Yusuf, Executive Director, Centre for Sustainable Development Goal Studies, University of Padjajaran, Bandung Equality of Opportunity in Indonesia

Sharon Bessell, Director of Research, Crawford School of Public Policy, Australian National University Multi-Dimensional Inequality: What the Individual Deprivation Measure Offers

Anna Margret Lumban Gaol, Senior Lecturer, Department of Political Science, University of Indonesia Affirmative Action as an Instrument to Correct Gender Inequality

116 Firman Witoelar, Director of Research, SurveyMETER Multi-dimensional Inequality: Evidence and Proposal

Arief Anshory Yusuf: Equality of Opportunity in Indonesia A study on the status and trends of equality of opportunity in Indonesia from 2000-2015 shows that inequality in opportunity primarily results in the emergence of a group of very poor. Our study observed the previous study on multi-dimensional poverty (1994-2014) and social policy effectiveness to reduce poverty and inequality.

•• SDGs can serve as an effective target for Indonesia among others because of the highly dynamic political condition and changing focus of the government’s development. •• Indonesia is still lagging behind in social spending, at around only one-third of Brazil. Indonesia has many successful initiatives and programs, but fails to pass the scaling-up phase. Best practices in regions, such as the actions taken by Mayor Rismain Surabaya, are successful efforts. Media can be used to ‘blow up’ success so that people will know. •• The results of the SDG Centre’s study on inequality of opportunity recorded findings in areas as follows: °° Education: in general, sub-indicators in education, which consist of literacy, enrolment, spending and consumption, for the past 15 years have improved, except for spending on education, which remains high but stagnant. °° Health: some indicators do not improve despite their importance, such as malnutrition and access to sanitation. In general, there is no improvement in the health sector. °° Job opportunities: access to formal jobs has not been improving since the economic crisis. Data shows that employment in the lower group is 50 percent higher because low-income children work after graduating from school. Access to formal employment does not improve. •• Gaps exist between disadvantaged groups, women and rural people. The research based on the data from 1994-2014 also shows multi-dimensional deprivation between regions. There is a skill gap of almost double between villages and cities, while Indonesia has been unsuccessful in closing the growth gap between Java and eastern Indonesia.

Sharon Bessell: Multi-dimensional Inequality: What the Individual Deprivation Measure Offers Inequality and poverty phenomena can be measured by using 15 indicators of deprivation, or absence of multi-dimensional access to analyse different conditions in a more comprehensive manner and to depict the actual reality onsite.

•• Indonesia has progressed in access to education. However, it is important to understand not just the number of children studying in school but also the quality of education. •• Efforts to measure deprivation or the absence of multi-dimensional access to see a poverty phenomenon should be designed based on a broad spectrum that includes politics, gender and different geographical regions. For example, a survey is conducted to ask not only

117 whether women can work or not, but more importantly, whether women may have equal opportunity as men to work. •• Our research identified 15 dimensions to measure the degree of material or non-material deprivation. For example, the right to vote: whether people, especially women, have the freedom to vote in the government, community and family. In terms of employment, it aims to understand whether equal access is open to different community groups to find jobs, etc. •• In highlighting multi-dimensional gap issues, gender is a sensitive issue. Tapping deeper into gender issues requires research in public and domestic/family domains. It is necessary because poverty must be seen not only from the capacity of the head of a family, but also from the capacity of all family members. •• This multi-dimensional approach is expected to become a more holistic method to see the inequality and poverty phenomena in a more comprehensive manner and to depict actual reality onsite.

Anna Margret Lumban Gaol: Affirmative Action as an Instrument to Correct Gender Inequality Affirmative policy is a starting point to increasing women’s participation. It may be realised substantially through increased women’s leadership in the bureaucracy, or ministries allowing women to fill high positions/Echelons I and II.

•• Gender must be understood not as a synonym for women, but as a relation between women and men, which in numerous dimensions is unequal. •• Affirmative policy aims to correct inequality and, specifically, to narrow the gender gapin equal opportunity. For example, Indonesia has adopted affirmative policy for women in recruitment of legislators (the General Election Law and Political Party Law) and members of the general election committee (the General Election Administrator Law). However, there is no affirmative policy on increasing the number of women civil servants, primarily to correct inequality in the small number of women civil servants achieving Echelon I and II positions. •• In bureaucracy, it is consistently recorded that there were only 40 to 45 percent female civil servants from 2014-2016. The number increases to 50 percent only in the Ministry of Health and Ministry of Child Empowerment and Protection. Only few women attain Echelon I-V positions in most ministries. •• Such low percentages of female civil servants are based on different factors. A study shows that some female civil servants reject promotions, despite their qualifications and eligibility, because they prioritise their families. Another reason is lack of support in the workplace; for example, their superiors say that women must remember their nature: prioritise family and stop pursuing a career. •• Lack of support for female civil servants to develop their career is in line with the glass ceiling theory, which in a simple way explains invisible obstacles such as glass ceilings that expressly hinder and prevent women’s efforts to maximise their careers. •• Further study is required to see whether there is any correlation between women’s participation and public service quality. The reason is that two ministries with the fewest promotions of female civil servants are also recorded as having the least public service integrity, according

118 to an annual integrity survey conducted by the Indonesian Corruption Eradication Commission (KPK). The two ministries are the Ministry of Religious Affairs and the Ministry of Transportation.

Firman Witoelar: Multi-dimensional Inequality: Evidence and Proposal A single index of multi-dimensional inequality is probably not the correct answer. SurveyMETER’s survey result shows that many households in the middle- to low-income classes consider themselves on the poverty line and vice versa.

•• Inequality is also multi-dimensional. It is not only in the financial sector, but also in other sectors, such as health and education. •• Poverty and inequality may be passed on between generations–children of low-income families have little education and health opportunities. Dwelling areas in the village or city may also influence this. •• Mobility between generations must be seen as part of an effort to reduce inequality. •• Limited resources of parents will result in limited futures for their children. •• Inequality should be observed as a multi-dimensional and between-generations issue.

Responses: •• There is a close relationship between inequality in income and in opportunity or access to services (education, health, etc.). Opportunity inequality exists due to limited access, discrimination or policy, which intentionally or unintentionally limits access. For example, paid clean water means poor people have no access to clean water. The solution to address inequality is to incorporate an economic approach and invite the role of the private sector. •• In terms of gender inequality in democracy, the glass ceiling theory opens a perspective that affirmative policy is significant as an initial step to correct inequality. A grassroots solution to inequality is a paradigm change, because a change of regulation only serves as a door opener. Facilities and infrastructure development may also function as a door opener.

INSPIRE

Inequality and poverty phenomena must be measured by using 15 indicators of deprivation, or absence of multi- dimensional access to analyse different conditions in a more comprehensive manner and to depict the actual reality onsite.

119 Graphic Recording

120 121 Inspire VII Gallery

122 INSPIRE VIII: Drivers and Policies to Address Multidimensional Inequalities

Wednesday, 9 August, 16.30-18.00 Padang–World Cafe

Key questions: •• How does inequality map in Asia? Where and how is the position in the global map? •• To what extent do the results of research institutes support policy makers in addressing inequality in Asian countries? To what extent are they utilised and what are the success stories? •• What are the key factors that contribute significantly and make knowledge production an effective investment in addressing inequality? •• To what extent does it inspire people to address inequality issues in Indonesia?

Amanda Robbins, Australia Indonesia Partnership for Economic Governance (AIPEG) Women and Work in Indonesia

Phillip O’Keefe, Regional Lead Economist for Social Protection and Labour Global Practice, World Bank Tax and Transfer Policy

123 Nguyen Thi Lan Huong, Institute of Labour, Science and Social Affairs, Vietnam Social Protection in Vietnam (2010-2030)

Prof. M Niaz Asadullah, University of Malaya, Malaysia How Can Malaysia Reduce Inequality through Education? Lessons for Indonesia

Amanda Robbins: Women and Work in Indonesia Investment in and spending on women’s empowerment have been huge, but the participation level of working women in recent years has been limited. To reduce gender inequality, systematic and comprehensive efforts are required to encourage women to advance as leaders, promote the adoption of policies supporting women, and create a friendly working environment for women.

•• Higher education has been accessible to women in Indonesia, but there is no increase in the number of working women. Based on available data, 67 percent of women in Indonesia work to financially support their families. •• Despite the huge investment in and spending on women’s empowerment, there is still limited participation by working women. •• To reduce gender inequality, systematic efforts are required, which at least include the following: 1) encourage women as leaders, 2) promote the adoption of policies supporting women, and 3) create friendlier working environments for women.

Phillip O’Keefe: Social Security: Ways to Improve Emphasis is put on tax and transfer policy as well as asset inequality. Levying high taxes on wealthy people and spending the tax distribution on poor people is a solution. Inequality in education quality is also a crucial issue. More children have education but the quality remains low.

•• There are different definitions of inequality between countries. •• Tax and transfer policies significantly affect inequality, for example in Malaysia and Sweden. Taxes are imposed on wealthy people, and the funds collected from the taxes are used to improve the welfare of poor people. •• Many countries increase access to opportunities, but access to public services, like health, tends to not increase. It means failure is found in the correction of the existing gap. •• Inequality in education quality is a crucial issue in many countries; many children have education but the quality remains low. •• Levying high taxes on wealthy people and spending the tax distribution on poor people may serve as a solution.

124 Nguyen Thi Lan Houng: Social Protection in Vietnam (2010-2030) A quite successful approach adopted by the Government of Vietnam to lift its people above the poverty line is a household and individual approach. The policy must be adjusted to people’s conditions and may not be generalised.

•• In the 1970s, 80 percent of people in Vietnam lived below the poverty line. However, the current poverty level is only 7 percent. One of the solutions reached by the government was taking a household approach in addition to an individual approach. •• The direct policy aimed at addressing inequality will indirectly affect revenue increases. •• Poor people cannot access financing due to lack of resources, like education. •• Policies must be adjusted to people’s conditions and may not be generalised. For example, a credit/loan policy to address poverty will discriminate villages. It does not benefit the minority, who mostly live in villages, because they cannot access the credit/loan. One policy is good for cities, but it works on the contrary in rural areas.

Prof. M Niaz Asadullah: How Can Malaysia Reduce Inequality through Education? Lessons for Indonesia Government spending must be balanced and not only focus on one sector because it may result in inequality in other sectors. The focus is on increasing job opportunities for women in order to be able to increase the country’s economy. With the high mobility of workers among ASEAN countries, more attention should be given to the level of labour vulnerability and its impacts on inequality.

•• It is expected that government spending should not focus only on one sector, but it must be balanced, for example between education and health. Spending on health in Malaysia is much lower than on education, which is predicted to result in inequality in the health sector. •• Early marriage based on social values held in some countries, like Bangladesh, Pakistan, and even Indonesia, affects income levels and eventually leads to economic inequality. With the increasing job opportunities for women, there is potential to grow a country’s economy. •• It is necessary to make efforts to close the gap in access to public services. This means the whole community must have equal opportunities to access public services. •• Mobility of workers among ASEAN countries is relatively high, but many of the workers are illegal because they do not have legal registration documents. This makes the workers vulnerable and may create inequality issues. •• Inequality in employment status also requires attention. There are too many temporary workers compared to permanent workers, which may worsen inequality.

Responses: •• Tax and retribution policy should not focus only on poor people, but also on people with disabilities. •• Women’s education is vital for Indonesia and ASEAN countries. The paradigm that poverty is

125 found in women and children must be changed. Access to formal and informal education must not be restricted. With skills and education, women tend to have more opportunity for financing.

INSPIRE

Education and provision of opportunities for women, household- and individual-based social protection, revenue distribution from tax for social protection, and education improvement serve as the policies to address multi- dimensional inequality.

126 Graphic Recording

127 Inspire VIII Gallery

128

IMAGINE I: Social Security: Ways to Improve

Wednesday, 9 August, 13.00-14.10 Yogyakarta Room–Conventional Theatre

Key questions: •• Social protection is more than an issue of access: What can we expect from social protection in the future? (Encourage, target and create quality productivity) •• Indonesia in the projection as imagined: What is the ideal pathway for Indonesia? What is the future context imagined from the existing evolution and projection? •• What, why and how is the context today?

Winda Yunita, Reckitt Benckiser Accelerating the Newly Implemented National Social Security System in Indonesia: A Diffusion of Innovation Theory Perspective

Alexander Anggono, Universitas Trunojoyo, Madura Roles of Operational Control Mechanisms to Support Implementation of The BPJS Health Insurance

Clara Siagian, Universitas Indonesia Improving Coverage of Universal Health Insurance: Health Workers’ Perception of Their Roles in the Civil Registration and Vital Statistics System (CRVS) and its Effect on Universal Health Coverage

Steven Koerniawan, World Vision Expanding Social Protection

130 Winda Yunita: Accelerating the Newly Implemented National Social Security System in Indonesia: A Diffusion of Innovation Theory Perspective Research shows that to increase the number of social security program participants, improvements are needed in services and communication. The required service improvements include the establishment of a call centre, satisfaction survey, and easy information access, including many medium options. Communication should target the younger generation and people with higher educational background, by promoting the relative advantages of the program. Respondents say that they need a program with real benefits and values similar to theirs.

•• An online survey involving 280 (self-selected) 20- to 60-year-old respondents (58 percent men and 42 percent women). •• Below are some interesting findings from this research: °° On average, respondents expressed their satisfaction with the service of BPJS Kesehatan (Health Security Program) compared to BPJS Ketenagakerjaan (Employment Security Program). This may be because they are more exposed to information on BPJS Kesehatan, whose benefits are more real and measured. °° Respondents say that they need a program with real benefits, in line with their values and beliefs. °° Traditional media has more positive impacts than social/online media. °° Social and demographic characteristics do not indicate any impacts on the application of a social security program. °° Older respondents with lower educational backgrounds participate more in the BPJS program. People with higher educational backgrounds probably have higher expectations and experience as private insurance customers, and therefore they use private insurance as their reference (benchmark). °° BPJS uses online media as a means of communication, but our study shows that not many respondents are aware of this. •• Based on the findings above, the following recommendations are made: °° Brand ambassadors or social media experts are elected to influence and educate the public and communicate the program effectively in order to increase public participation. °° BPJS must increase the number of participants and quality, among others by streamlining the complicated service procedures. °° BPJS must design and conduct a quality and periodic satisfaction survey. A participant satisfaction survey conducted by BPJS Ketenagakerjaan must be improved by using probability sampling. °° Increase call centre services by providing easily accessible and accurate information in order to convince the public to participate in this program. °° BPJS must promote the relative advantages of the program, namely accessibility and compatibility, especially to the younger generation, in order to respond to the needs of potential participants with higher educational backgrounds.

131 Alexander Anggono: Roles of Operational Control Mechanism to Support Implementation of BPJS Health Insurance Our research shows that in the BPJS Health Insurance program, financial fraud cases are found more often in Java than outside of Java. Meanwhile, operational fraud happens more often outside of Java than in Java. Outside of Java, it is found that the information system is not very effective in reducing potential fraud. In addition, to achieve the targeted universal coverage in 2019, completeness and accuracy of health data in Indonesia must be improved. The recommendation is that BPJS still needs to improve its supervision mechanism and to establish a supervisory team, although every hospital has a clinical pathway.

•• Research background: Janis (2013) indicates that in general, health services in Indonesia may be categorised into three models: self-treatment, traditional treatment and treatment by health professionals. In his study, Janis said that most Indonesians tend to prefer self- treatment, primarily for minor illnesses, without the supervision of health professionals, like doctors or nurses. This research attempts to respond to the question of whether this condition is persisting and how effective BPJS Health Insurance application is among the community. •• Research method: using macro data from the National Economic Survey (Susenas), metadata, results of previous researches, problem mapping, interview with the Association of Certified Fraud Examiners(ACFE) pertaining to financial fraud issue, and data for the last five years (2012-2017). •• The analysis method is simple descriptive analysis and causal model framework, including simple statistical inference to determine factors influencing the implementation of National Health Insurance. •• For a better national health insurance system, improvement in all layers and clusters of actors must be made in order to fulfil quality and fair access to health services for all people. In the application, supervision at the insurer, provider and beneficiary levels is required. •• Financial fraud happens more often in Java than outside of Java. Meanwhile, operational fraud is the other way around. This is probably due to the lack of application of an integrated information system. On the other hand, the current information system is more effectively applied in Java. •• Data from BPJS Health Insurance in 2015 shows that 49 percent of people have not participated in the national health insurance program. Achieving targeted universal coverage in 2019 will be a big undertaking. •• Urban versus rural issue: Data on BPJS user concentration and the 2014 financial report shows the balance of operational revenue and operational expenditure. However, in 2015, operational revenue only reached 0.1 percent. The question is, what factors are causing this low revenue? •• BPJS must improve its supervision mechanism. Interviews show that most attempts at fraud are committed during the confirmation process with the provider. Therefore, we suggest an implementation supervision team be appointed at hospital level, although each hospital has its own clinical pathway.

132 Clara Siagian: Improving Coverage of Universal Health Insurance: Health Workers’ Perception of Their Roles in the Civil Registration and Vital Statistics System (CRVS) and its Effect on Universal Health Coverage The solution to increasing National Health Insurance (JKN) coverage and maintaining universal coverage lies in the Civil Registration and Vital Statistic (CRVS) system. Health professionals may be involved and empowered to boost this strategy’s success and ensure CRVS is functioning. This strategy application in Indonesia needs strict regulations from the central to the regional level, as well as a standard operating procedure/manual describing clear processes, main functions and duties, equipped with: 1) capacity and incentive increase for health professionals to perform these additional duties, and 2) expansion of outreach and service of the civil registration office for coordination and communication.

•• Currently, National Health Insurance (JKN) has reached 70 percent of its target. However, there are still 70 million people without coverage, primarily poor and vulnerable people. Health workers play a vital role in expanding JKN coverage. Therefore, it is important to understand their perception of the role and their impacts on JKN coverage expansion. •• The key solution to increasing JKN coverage and universal coverage is improving the Civil Registry and Vital Statistics (CRVS) system in the form of a resident’s identity card, birth certificate, marriage certificate, etc. Without the national registration system, which provides unique ID numbers for residents, potential participants cannot register themselves in JKN. Therefore, they will face difficulties getting adequate health services. •• Health workers have developed awareness on the importance of having legal documents so that patients will receive adequate health services. Health workers are also familiar with helping patients prepare legal documents to allow them to access health services. For example, by helping parents register newborns to get birth certificates. Here, health workers play a vital role. •• The process above may encourage health service integration with the civil registration system. Based on the data obtained from interview results with health workers, including midwives in Aceh Barat, Pekalongan and Pangkajene Kepulauan (Pangkep), health workers who intensively interact with mothers can help the process of identifying children who do not have registration or identity documents. For example, a district health centre in Pangkep district helps prepare birth certificates and uses this as an incentive to encourage mothers to deliver their babies in the district health centre. •• Health workers understand the importance of their role, as mentioned above. However, to design a sustainable program, they need further support, as helping register people is not their main duty. The civil registration office must expand its coverage and services so that it will be easier for health workers to communicate and coordinate in this effort. •• According to respondents, for smooth program implementation, regulations from the central to the regional levels must be strict, primarily to regulate the division of main duties and functions. This regulation must be accompanied by an implementation guideline in the form of technical instructions and standard operating procedures (SOP) or a manual, which also provide instructions on capacity increases for health workers, reward/remuneration, and other incentives for additional duties related to civil registration.

133 •• The experiences of countries such as Ghana, the Philippines and Thailand demonstrate that incorporating the role of health workers in integrating health service programs with civil registration is effective in expanding the coverage of people registered in the health insurance program, and can reach vulnerable and hidden people.

Steven Koerniawan: Expanding Social Protection Social protection trends in Indonesia, from residual to institutional, are inversely proportionate to global trends. The main issues of social protection implementation are inaccurate data, lack of funding, massive corruption and unequal distribution. Practical solutions have not been found, but there is a possible solution, namely increasing state revenue from taxes to address lack of funding. For example, applying better tax collection mechanisms, tax amnesty, and so on. Stronger law enforcement and social sanction application are required.

•• The global trend shows that only targeted people are included in social security programs. On the other hand, in Indonesia, the trend moves towards coverage of all people. •• There are three main problems with coverage expansion, one of which is inaccurate program recipient data. Experience shows that, in temporary unconditional cash transfer programs, non-poor people receive cash transfers due to inaccurate data, lack of funding from the government, and corrupt practices (rice for the poor is sold for profit by irresponsible people). •• In certain cases, informal workers and poor people can only access the program when they pay bribes (administrative fee). •• To promote the success of this program, leaders must learn from past mistakes. A possible solution at present is to increase state revenue from taxes to address financing constraints. This may be conducted by expanding the number of taxpayers, better tax collection mechanisms, use of a tax amnesty, stricter law enforcement, and the application of social sanctions when a violation is committed.

IMAGINE INDONESIA 2045

In 2045, everybody (people with a disability, people with different sexual orientation, etc.) will have access to education and social security services. Social security will cover all, and all people will have a better quality of life. Establish infrastructure, financial and operational systems to reduce fraud risk. Consider the social and psychological factors in Indonesia.

134 Graphic Recording

135 136 Imagine I Gallery

137 IMAGINE II: Inequality in Its Context

Wednesday, 9 August, 14.40-15.50 Medan Room–Fish Bowl

Key questions: •• Inequality is a big problem in the world, not only in Indonesia. •• The world faces not only economic problems, but also different multi- dimensional issues, from which Indonesia is not excluded. •• What will equality look like? •• How is Indonesia imagined in the forecast? What is the ideal pathway for Indonesia? What kind of future is imagined from the existing evolution and forecast? •• What, why and how is the context now? •• To what extent can knowledge and experience inspire people to respond to the challenges of inequality issues for the future of Indonesia?

Agung Mahesa Himawan Darodjatoen, the University of Western Australia Path Dependence and Economic Growth: An Evolutionary Analysis of Regional Inequality in Indonesia

Ilmiawan Auwalin, Airlangga University Ethnic Social Norms and Female Labour Force Participation in Indonesia

Dewi Sukma Anggriyani, Institute for Economic and Social Research (LPEM), University of Indonesia Towards Indonesian Tension: Does Diversity or Inequality Matter for Conflict?

138 Mubariq Ahmad, Conservation Strategy Fund Seeing the Unseen: For whom is the Growth?

Agung Mahesa Himawan Darodjatoen: Path Dependence and Economic Growth: An Evolutionary Analysis of Regional Inequality in Indonesia The Gini ratio does not touch comparison between regions. Regional inequality in Indonesia has remained stagnant for 20 years. By using a tailed index, it is found that inequality between districts/municipalities in one province may be higher than between provinces.

•• Long-term policy must be reviewed and renewed every year. Understanding history is crucial and should be considered in the preparation of the future plan. •• Often, the inequality index only calculates gaps between individuals, but neglects gaps between regions. •• There are at least three aspects to seeing the gap between regions, namely socially prone to poverty, politically prone to conflict, and fund allocation from the central government resulting in constrained regional development. •• There must be economic growth diversification and efforts to maximise the leading sector by consistently developing sectors with potential development in the region. Accordingly, migration can be prevented as effectively as possible.

Ilmiawan Auwalin: Ethnic Social Norms and Female Labour Force Participation in Indonesia More than 50 percent of the world’s population is women, but women’s participation is far below 50 percent. If women’s participation is higher (education and employment), a country’s productivity will increase.

•• In Indonesia since the 1970s, since the oil boom period, there has been a significant increase in women’s participation. In 2012, data showed that men’s and women’s enrolment was equal. Fertility rates sharply decreased from five to two children. However, women’s participation rates in employment have been stagnant since the 1990s. The real minimum wage always increases. The increase in women’s wages is only 50 percent, while men’s wage increases reach 80 percent. •• A survey on ethnic identity and cultural diversity of patrilineal, matrilineal, and bilinear will provide additional data on the dynamic participation of women in employment in Indonesia. •• Women’s decision to work is also determined by ethnicity. Ethnic identity factors affect women’s ratio in the employment sector. •• In Indonesia, there are around 1,400 tribes and ethnic groups. However, a longitudinal survey conducted in Indonesia, the Family Live Survey, did not collect data by ethnic group. The only census covering ethnicity was conducted in 1930. Ethnicity was included in the census in 2000 and 2010. •• At least two aspects are identified that influence women in making a decision to work. First,

139 advice or a suggestion from their private surroundings, both nuclear and extended families. Second, advice and opinions from their ethnic group.

Dewi Sukma Anggriyani: Towards Indonesian Tension: Does Diversity or Inequality Matter for Conflict? Are conflicts caused by social aspects or income inequality? Our research shows that inequality can trigger conflict. It indicates a positive linear correlation between regions with the highest and lowest ratio of conflict. Greater inequality triggers potential conflict. On the other hand, less inequality may reduce the frequency of conflict. In other words, a region with marked inequality tends to be more prone to conflict.

•• An ethnic diversity index variable is included in a conflict study to check the conditions that cause conflict in regions with high diversity. •• The study also found that high unemployment rates and many informal jobs contribute to triggering conflicts. •• Based on the study, one of the efforts to reduce conflict is opening access to jobs. •• In traditional communities, women’s access to jobs remains limited, making their access to income limited and investment in children extremely low. Women’s access to formal jobs must be supported by more unrestricted benefits, such as maternity allowances or maternity leave.

Mubariq Ahmad: Seeing the Unseen: For whom is the Growth? Land has become the government’s main focus in addressing inequality, as the livelihoods of half the households in Indonesia still rely on agriculture, which depends on land. The National Land Agency (BPN) has records of 22,000 land disputes. Overlapping claims are a consequence of the government granting land entitlements, while government bodies do not coordinate to resolve land ownership disputes. Awareness of land inequality issues between stakeholders remains low and they tend to be reluctant to display land inequality data. Conflicts often result in population displacement.

•• Violent land conflicts often happen, for example in Papua in 2016. If a conflict happens, it usually relates to a government policy. •• Data on differences in Gross National Product and Gross Domestic Product needs special attention. For example, around 90 percent of revenue in East Kalimantan is brought from outside the province. •• In the present national development plan, the National Development Planning Agency (Bappenas) and Regional Development Planning Agency (Bappeda) seem not to know whose revenue will increase or needs an increase. •• The government contributes to environmental damage and unwanted/involuntary population displacement. •• Let us imagine that growth and inclusiveness in national development also covers the indicator of a high population that moves involuntarily for the sake of growth. •• In future, economic growth should not result in displacement or environmental damage.

140 •• Overlapping claims are a consequence of the process of granting land entitlements. Government bodies do not coordinate to resolve land ownership disputes. •• Awareness of land inequality between stakeholders remains low and they tend to be reluctant to display land inequality data. •• There is excitement among central and regional leaders over land entitlement grants to investors to accelerate economic growth, but they do not consider the land users.

Responses: •• There should be a moratorium on vast land ownership. We should measure ‘Gini wealth’, instead of ‘Gini income’ because the former also calculates the amount of assets. We invite economists to develop this calculation method. Certificates will not give significant benefit if vast and fertile land is not available for further development by the people. •• Scarce employment alternatives in regions contribute to stagnant, low wage levels. This becomes a disincentive for people to go to school. Investment in tourism requires prudence in determining tourist targets. Too many targeted tourists may potentially cause environmental damage, and the tourism sector does not always give significant added value.

IMAGINE INDONESIA 2045

Indonesia will be more just and equal in 2045. Lower-class people will also enjoy growth and incomes will increase faster to reduce inequality. Indonesia without conflict: to become a democratic country without conflict. Sources of problems, like inequality and land, must be immediately addressed. Participation of women in work must be increased to create excellent generations in the future, both women and men.

141 Graphic Recording

142 143 Imagine II Gallery

144 IMAGINE III: Affirmative Policy on Fiscal and Investment to Reduce Income Inequality

Wednesday, 9 August, 14.20-15.30 Yogyakarta Room–Conventional Theatre

Key questions: •• Inequality is the biggest problem in the world now, in addition to funding and maintaining efforts to address inequality. •• Bridge and ensure correlation between macro perspectives and micro issues. •• How can Indonesia move towards more inclusive economic growth

Mardhiah, University of Canberra, Australia Tax Policy Design and Taxpayers’ Perception of Fairness, Corruption and Complexity

Matondang Elsa Siburian, Waseda University, Japan A Quest for Regional Inequality in Diversity: Post Decentralisation Analysis in Indonesia

Ichsan Zulkarnaen, National Development Planning Agency of the Republic of Indonesia (Bappenas) The Study of Foreign Direct Investment and Income Inequality in Indonesia

Asri Yusrina, SMERU Research Institute Does Eliminating Gasoline Subsidy Reduce Inequality? A Lesson from Indonesia’s ‘Big Bang’ Fuel Subsidy Reform

145 Mardhiah: Tax Policy Design and Taxpayers’ Perception of Fairness, Corruption and Complexity Our research shows that among taxpayers who consider the taxation system to be fair, values and beliefs highly influence their behaviour in paying taxes. Respondents prefer a zakat mechanism to tax payment because they believe that zakat will be distributed to the appropriate beneficiaries and that tax is not advised, even prohibited, in their religion. In addition, they perceive that what they receive from the government is smaller than what they pay in taxes. It is also perceived that there is inconsistency in reward and punishment mechanisms for tax payment compliance and obedience.

•• The research background shows that taxpayers’ reluctance to pay taxes preserves inequality. Therefore, a tax policy which increases compliance needs to be developed by first understanding the characters of taxpayers. It is necessary to obtain data on taxpayers’ perceptions of the tax system and tax office authorities, and how this affects their level of belief in the tax system. •• Understanding taxpayers’ perceptions and characters may help formulate a tax policy that increases compliance. •• Data was collected through a survey of 500 taxpayers and interviews with some taxpayers, officials and staff of the tax authority. •• Initial findings on perceptions of fairness level: °° Procedural fairness: respondents consider that the tax system is fair enough. However, when connected with their personal beliefs, there are some perceptions comparing tax as a contribution to the country to zakat as a contribution determined in their religion. °° Distributive fairness: there is no exchange in equality. According to respondents, what they receive from the government (public facilities and services) is smaller than the taxes they pay. °° Retributive fairness: respondents feel a sense of unfairness in the implementation of the policy of the Directorate General of Tax in the reward and punishment mechanism. In the policy, compliant taxpayers seem to be consistently supervised by tax officers. It is considered a punishment for obedient taxpayers. •• Taxpayers disciplined to pay taxes are constantly supervised, while those failing to do so are ignored. In addition, some aspects are considered complicated, such as tax calculations, legal certainty (changing regulations), and complex data requested by the tax office. Annual tax return forms are not considered complicated.

146 Matondang Elsa Siburian: A Quest for Regional Inequality in Diversity: Post Decentralisation Analysis in Indonesia Our research shows that inequality exists not only between regions or provinces, but also within regions. For example, Mimika District in Papua has a very high gross domestic product (GDP), which does not happen in any other area in Papua. Decentralisation influences income inequality, where an average of only 45 percent of regional government spending is for public spending, and the rest is for salaries, etc. (inefficient spending). Gaps in resources and knowledge are the cause of this. Ineffective spending will not address inequality. Inequality comes from politics and policies. Affirmative policy must be carefully adopted because it may lead to other forms of discrimination.

•• 45 percent of average regional spending is for district government spending. In the decentralisation era, transfer capacity from the central government is required for equality. •• Transfer from central government may actually reduce inequality. However, ineffective spending will not address inequality. Inequality comes from politics and policies. Too many affirmative policies lead to discrimination. When connected with religious diversity, poor people generally follow the majority religion. •• Jobs with added value—mostly, Indonesia sells commodities, not products with added value. •• Personal capacity increase—gaps in resources and knowledge result in inefficient spending.

Ichsan Zulkarnaen: The Study of Income Inequality in Indonesia: The Case of Foreign Direct Investment (FDI) in Income Inequality at Provincial Level Although there is a general assumption that foreign direct investment (FDI) can boost economic growth, FDI can also increase income inequality because it tends to recruit highly skilled people. Meanwhile, highly skilled human resources are very few in Indonesia. Consequently, this results in income inequality. FDI is made in more extractive sectors, which require high skills. The government should select FDIs that will employ more human resources with high wages.

•• In the last 10 years, there has been increasing wage inequality in Indonesia. The impact is a decrease in people’s purchasing power, affecting the economy. This damages social cohesion due to the absence of trust among the community. •• FDI can also increase income inequality, as FDI tends to recruit highly skilled people. Meanwhile, highly skilled human resources are very few in Indonesia. Consequently, this results in income inequality. •• Policy recommendation: improve human resource quality to increase the productivity of Indonesian workers.

147 Asri Yusrina: Does Eliminating Gasoline Subsidy Reduce Inequality? A Lesson from Indonesia’s ‘Big Bang’ Fuel Subsidy Reform Fuel subsidy reform results in a decrease of inequality. The impact will be greater if supported by a temporary unconditional cash transfer program. However, the impact of such cash transfers is shorter than those of a fuel subsidy reform.

•• Our research was conducted on the fuel subsidy reform by the government in 2014 and its impacts on inequality levels in 2015. Data shows that inequality decreased to 0.042. •• Inequality simulation in September 2015, with and without fuel subsidy in November 2014, shows that fuel subsidy greatly contributed (17.52 percent) to the decrease in inequality from September 2014 to September 2015. •• Meanwhile, 50 percent of cash transfers (BLT) contributed to the decrease of inequality. •• The impact of fuel subsidy reform was greater on wealthier people than the lowest percentile group, therefore reducing inequality. •• Cash transfers can also contribute to reducing inequality, however not in the long-term.

Responses: •• In relation to FDI, the government must support micro, small and medium enterprises in regions adopting local resources or limiting FDI. Many FDIs are made in more extractive sectors, which require high skills and result in higher inequality. The government should select FDIs that will employ more human resources in Indonesia, with higher wages.

IMAGINE INDONESIA 2045

A world without gaps is based on high efficiency and increasing productivity, resulting in increasing income.

148 Graphic Recording

149 Imagine III Gallery

150 IMAGINE IV: The Future of Smallholder Farmers: Feeding the World and Sustainable Income

Wednesday, 9 August, 16.00-17.10 Medan Room–Fish Bowl

Key questions: •• What are the roles of small-scale industries and agriculture in addressing inequality? •• How do we improve community-based empowerment programs? •• How does Indonesia improve value chains from farmers to the market?

Sapta Putra Ginting, Ministry of Marine Affairs and Fisheries Coastal Community Development Project, Experience and Lessons Learned

Agus Mulyono, PT Japfa Comfeed Indonesia Tbk Partnerships between the Farmer and the Private Sector

Andy Hall, Commonwealth Scientific and Industrial Research Organisation, Australia Partnerships between the Private Sector and Research Institutes/ Universities

Sharon Suri, World Fish, Malaysia Financing Smallholder Aquaculture: A Case Study of the AAC and Smallholder Shrimp Farmers in Aceh, Indonesia

151 Sapta Putra Ginting: Coastal Community Development Project, Experience and Lessons Learned Fishermen’s income increases and asset ownership will undoubtedly increase their welfare and living standards, including improvements in health and education quality for their children. This effort is manifested through a coastal community development project with empowerment and supply chain streamlining so that fishermen can receive higher profit. The result shows that fishermen’s income can significantly increase, by up to 100 percent.

•• Coastal community development projects are implemented in 181 villages spread across 13 districts in the eastern part of Indonesia, aiming to guarantee coastal water productivity in supporting food resilience. •• Each village involved in the project conducts various activities, such as infrastructure construction and ecosystem conservation. In addition, empowerment of women (fishermen’s wives) is conducted to generate extra income for their families. •• Middlemen are reduced and people are educated to process the caught fish in order to gain added value and improve market access. •• Through business mentoring, fishermen are supported to streamline supply chains and are educated on marketing strategies. •• In 2016, the Ministry of Marine Affairs and Fishery made a comparison with a control group in 2013 on the supported coastal community. It was found that fishermen’s income increased by up to 100 percent with empowerment and supply chain streamlining, leading to fishermen receiving higher profits. Fishermen were taught to save their money and control their spending so that they would not return to middlemen and they would have their own assets. •• Increases in fishermen’s income and asset ownership lead to increases in their welfare and living standards, including improvements in health and education quality for their children. •• The project done by the ministry also encouraged ecosystem improvement. Women were agents of development. In some case studies, it was recorded that women were more disciplined at running a business and more committed to repaying their loans. •• By protecting the coastal ecosystem, such as mangrove forest rehabilitation, food resilience improved. In 2017, member fishermen started to access formal capital sources.

Agus Mulyono: Partnerships between the Farmer and the Private Sector This case study observed a partnership between the private sector (PT Japfa Comfeed) Indonesia and chicken farmers. The study aimed to explore factors influencing the success of a partnership model and how this model may be further developed to broaden coverage. The regional government instructs the Regional Development Bank to extend loans at an interest rate of 5 percent to farmers to build barns, under the supervision of PT Japfa. Farmers do not directly pay instalments. Loans are deducted from the provided incentive.

•• The partnership model of PT Japfa involved farmers in the supply chain. In 1998, Japfa’s core business was chicken feed. Due to an economic crisis, demand for chickens and eggs

152 decreased, making small farmers disappear from the business. Japfa Comfeed suffered a substantial loss, as the number of chicken feed buyers drastically decreased. •• Responding to such conditions, Japfa started to build partnerships with farmers under an outsourcing system. Farmers were entrusted with chickens for free. Meanwhile, in addition to buying sold chickens, PT Japfa helped find other buyers. Since the partnership, some farmers now have not only hundreds but thousands of chickens. •• For satisfactory results, farmers were also mentored. For example, they were provided with skills to build barns following standards. Japfa also provided bank loan security for farmers according to the agreement. Japfa will pay the loan extended by the bank in instalments. Japfa also bears the risk, but it needs a breakdown business method. Partnerships must basically be win-win between the private sector, banks and farmers. •• How can this model be further developed to reach new farmers who do not have barns? The regional government can urge the Regional Development Bank to extend loans at an interest rate of 5 percent to farmers to build barns (under the supervision of PT Japfa). Farmers do not directly pay instalments. Loans are deducted from the provided incentive. •• Is this model replicable? Japfa also has a cow farm business managed under a partnership with banks and farmers. Farmers can buy cows that are ready for delivery and have passed their critical period, so that success potential reaches almost 90 percent. After the cows deliver their calves, Japfa buys the calves and this cycle revolves.

Andy Hall: Partnerships between the Private Sector and Research Institutes/ Universities Partnerships between universities and the private sector can lead to innovation and research on consumers and markets, in order to further increase market share. There is no ideal blueprint for how to create a partnership. Successful partnership patterns can only be learned through case studies.

•• Partnerships can produce many things, from capacity building and expansion of innovation, to simplifying the supply chain. The willingness of the business sector to work with universities needs to be improved in order to expand the market and improve product quality. •• Cooperation between universities and the private sector has the potential to generate innovation and encourage research on consumers and markets to increase market share. This case required cooperation, which can also be activated through social networking. •• Partnerships include not only the process of providing money, but also building capacity.

Sharon Suri: Financing Smallholder Aquaculture: A Case Study of the AAC and Smallholder Shrimp Farmers in Aceh, Indonesia The Aceh Aquaculture Cooperative (AAC) is a sustainable and environmentally friendly aquaculture cultivation. It is market oriented but complies with the principle of cooperative economy and fairness.

•• AAC was established in 2013 with 32 members in Aceh, with the initial objective to breed

153 shrimp. Today, AAC has around 650 members. •• Previously, shrimp farmers did not have access to adequate information on the range of shrimp prices in the market, because their shrimp were directly bought by middlemen. •• Small farmers/fishermen disliked cooperatives because many cooperative administrators stole members’ money. However, they actually needed credit/loan cooperatives. •• In addition to poor information access, farmers did not have access to capital. Currently, AAC manages funding support from Rabobank Foundation of around Rp2 billion, which is distributed in the form of capital loans to farmers under AAC’s guidance. •• Cooperative members can enjoy several benefits, including productivity increases through training participation and access to wider markets. Their markets have expanded to export to Singaporean fine restaurants. Access to capital is also improved. Members can usethe cooperative’s warehouse and vehicles to reduce logistics cost. In other words, ACC managed to build a developing business group.

Responses: •• The problem is that our farmers are not very confident. For organic farmers, production yield/ harvest must be significant, and therefore an organisation like a cooperative is needed to allow price negotiations and direct access to the market. Private involvement is required. If organic products rely only on retail, it will be difficult to develop in a sustainable manner. The challenge is how to have farmers plant organic plants and produce enough food in an organised manner. We must be willing to support by opening market access for continuous production processes. •• Empowerment starts with collaboration, such as the triple helix model. In order to connect with the market, mentoring programs are necessary so that farmers are not cheated by middlemen. We must find private entities that focus not only to gaining profit. Farmers can be self-reliant over time. Based on experience, it takes five to six years for farmers to own their barns and become successful.

IMAGINE INDONESIA 2045

Partnerships between farmers and third parties, such as private entities and cooperatives, are based on practices benefiting all parties. Partnerships between universities and the private sector are established to foster innovation.

154 Graphic Recording

155 156 Imagine IV Gallery

157 IMAGINE V: Inequality Traps in Urban Dynamics

Wednesday, 9 August, 14.20-15.30 Yogyakarta Room–Conventional Theatre

Key questions: •• What is the current government’s plan for an inclusive city? •• What are the future trends in urbanisation? •• What is required to address a reversal in trends? •• If it is unpreventable, what are the risks?

Mahdaleny, East Kalimantan Provincial Government Environmental Conflicts in Balikpapan Bay, East Kalimantan: Questioning the Participatory Planning Process in Indonesia

Febrianto Wibowo, University of Gadjah Mada Scattered Slum Islands: Insurgent Citizenship Related to the Provision of Public Services in Wedi Kengser Settlement, Yogyakarta

Indrawan Prabaharyaka, Technische Universitat Munchen, Germany Planning, Design and Maintenance of Future Infrastructures

Luthfi Muhammad Iqbal, National Development Planning Agency of the Republic of Indonesia Power/Policy, Mismatch/Pressure: the Case of Bandung in Fighting Against Inequalities

158 Mahdaleny: Environmental Conflicts in Balikpapan Bay, East Kalimantan: Questioning the Participatory Planning Process in Indonesia Most conflicts in Balikpapan Bay result from the impacts of environmental damage. For too long, the local government has ignored environmental degradation and failed to plan for an ecologically sensitive area, which eventually triggers conflict. Partially, the government responds to the conflict and chooses conflict resolution through negotiation, mediation and public participation.

•• Urban planners in Indonesia devise their plans like they are planning a Sim City game. •• The municipal government of Balikpapan granted a multi-storey building construction permit in Balang Island of Balikpapan Bay. The government ignored the negative impacts on mangrove forest degradation. •• The municipal government of Balikpapan seems to be lacking knowledge on biodiversity and the importance of mangrove forests as a source of food for marine species. •• Participatory planning is applied to educate the regional government and give feedback on the importance of biodiversity in Balikpapan. •• The participatory planning process needs the commitment of all stakeholders. •• The regional government is not sensitive to environmental issues. Participatory planning applications become urgent and education programs are needed for regional government officers on the importance of biodiversity in Balikpapan.

Putu Ananda: Scattered Slum Islands: Insurgent Citizenship Related to the Provision of Public Services in Wedi Kengser Settlement, Yogyakarta This paper highlights the impacts of urbanisation in Yogyakarta, which creates illegal settlements and slums in villages along the riverbank of Gajah Wong. In the villages, it is difficult for people to receive public services as their fundamental rights. The community is closer to non-government organisations than the government.

•• The increasing urbanisation trend is evident in the following data: in 1950, 30 percent of the world population lived in urban areas; in 2014, the figure reached around 50 percent. •• People choose to live in cities to access decent facilities. •• To address urbanisation, the government needs to prepare the required facilities. As stated by Finance Minister Sri Mulyani, urbanisation is one of the ways to reach a higher economic level. Decent facilities for newcomers in urban destinations can increase the area’s economy. •• Ledhok and Gondolayu Lor are villages with illegal settlements along the riverbank of the Gajah Wong River, with around 170 occupants. There is no spatial plan along the riverbank. Non-government organisations (NGOs) take over the management of basic needs and support functions. The government plays a very minor role and does not consider the civil society as participants. •• The community makes its own funding sources to control and manage sanitation and waste. People’s right to receive their basic needs and facilities has not been fulfilled. In building their

159 environment, people are closer to NGOs than the government. Interaction between advocates means these areas have high conflict potential.

Indrawan Prabaharyaka: Three Movements: Planning, Design and Maintenance of Future Infrastructures Indonesia is a big laboratory where research on ‘technology of friendship’ is conducted. The research is not only to find tools, but also to create hope. This is about the invention of hope.

•• Inequality in urban areas is attributable to limited urban capacity development, which fails to balance population growth rates. For people in urban areas, talking about the following three things is considered taboo: sex, faeces and death. Therefore, it is difficult to obtain sanitation data, meaning data is based only on speculation. •• Until now, no planning process has been based on empirical experiences of people conducting urban maintenance. Empirical experience has not been the basis of urban planning or drafting regulations. Meanwhile, the saying goes, “it is not the innovator that turns the world around, it is the maintainers”. •• Social inequality in urban areas is evident from the fact that some people do not have access to sanitation facilities and septic tanks. •• Prototyping culture: it is more difficult to maintain than to build. •• Closing statement: cities may be designed as such to reduce inequality.

Luthfi Muhammad Iqbal: Power, Policy Mismatch and Pressure: the Story of Bandung in Fighting Against Inequality Bandung is recognised as a city that supports human rights, has urban spatial planning, and develops city parks. Ironically, evictions have been happening for the last five years and special treatment is given to buildings breaching regulations. ‘The powerful’ enjoy dispensation, while ‘the powerless’ are evicted.

•• The municipal government must provide space for the community. Policies should be made based on people’s needs. Inequality in the city exists due to an imbalance of community roles. •• A city consists of ‘the powerful’ and ‘the powerless’. Policies by and for the benefit of the powerful are formulated behind closed doors and usually result in a mismatch with the real condition. •• Special treatment is given by the regional government to buildings breaching regulations. The powerful enjoy dispensation, while the powerless are evicted. For example, the Pullman Hotel and street vendors along Punawarman Street. •• The powerless can gather force when united. The case of the village of Kolase in Bandung shows how an eviction targeted people expressing their rejection through a collage of pictures of their village. Despite this, they were eventually involuntarily resettled by the regional government to flats. The state grants privilege to the powerful and ignores the powerless, except if they organise themselves.

160 IMAGINE INDONESIA 2045

Urban people are entitled to legitimate identity as residents and to use various facilities provided by the government. They must contribute to the city’s development and advancement. Urban density must be managed, and therefore, commitment of all stakeholders is needed.

161 Graphic Recording

162 163 Imagine V Gallery

164 IMAGINE VI: Inclusive Economic Growth: How Should Indonesia Adapt?

Wednesday, 9 August, 15.40-16.50 Yogyakarta Room–Conventional Theatre

Key questions: •• What do you imagine in 2045? What will inclusive growth be like in Indonesia? •• Identify core elements of inclusive growth for the future of Indonesia. •• What policies are required by the government to reach inclusive growth? •• Does increasing global trade cause income inequality in Indonesia?

Agnes Vera Yanti Sitorus, Central Bureau of Statistics (BPS) Inclusive Growth: Another Economic View

Nugraha Pukuh, Central Bureau of Statistics (BPS) Inclusive Growth: Pro Poor Growth Analysis and Poverty Decomposition

Teguh Dartanto, University of Indonesia Two Decades of Structural Transformation and Dynamics of Income Inequality in Indonesia

Palupi Anggraeni, Griffith University, Australia The Contribution of Natural Resources to Economic Welfare in Indonesia

165 Agnes Vera Yanti Sitorus: Inclusive Growth: Another Economic View This presentation identifies the core elements of inclusive growth by using indicators of inclusive economy from the Asian Development Bank, World Economic Forum, and United Nations Development Programme as the standard. In general, inclusive economy develops well from 2010 until 2015 although some areas like Papua and East Nusa Tenggara do not experience any improvement.

•• Inclusive economy is an effort to boost growth focusing on inequality decreases and participation of all parties. •• The problem in regions is serious inequality. •• According to the data of the Asian Development Bank (ADB), from 2010-2015 all areas show improving economic growth, except Papua. •• Data of the World Economic Forum (WEF) does not use economic growth influence variables, with almost the same data as ADB. Papua and West Papua are still in poor condition. •• Based on UNDP indicators (Gini, unemployment and poverty), the UNDP index increases due to intensifying inequality. In addition, some areas have the most serious inequality due to a lack of change and innovation. •• Papua and East Nusa Tenggara have red or low scores in participation in education, infrastructure, access to electricity, and sanitation. •• Inequality may be observed from the condition of overall regional infrastructure and growth, starting from infrastructure development.

Nugraha Pukuh: Inclusive Growth: Pro Poor Growth Analysis and Poverty Decomposition Prosperity is a human right, and therefore one’s effort to be free from poverty is his or her human right. A hypothesis says that poor people get poorer, while rich people get richer. We will depict the inclusion level in Indonesia’s economic growth.

•• The inclusion level of Indonesia’s economic growth may be seen through data on the Growth Incidence Curve (GIC), Poverty Equivalent Growth Rate (PEGR), and Shapley Decomposition Curve. •• Growth Incidence Curve data observes and compares the west and east parts of Indonesia. From 2012-2014, there is an inclusive trend; that is, the number of middle- to lower-class people grow higher than middle- to upper-class people. In Sumatera and Kalimantan, 50 percent of the lowest class people grow higher than 50 percent of the highest class people. •• Poverty Equivalent Growth Rates have a positive value, where poor people enjoy growth, and a negative value with the growth of rich people. Data from 2012-2014 has a positive value, while it has a negative value from 2014-2016. From 2014-2016, the upper class people feel growth, except in the east part of Indonesia. •• Viewing the total effect, economic growth in Indonesia alleviates poverty. Based on wealth re-distribution, poverty increased from 2014-2016, although it is covered by the growth effect.

166 Teguh Dartanto: Two Decades of Structural Transformation and Dynamics of Income Inequality in Indonesia In the last three decades in Indonesia, social and economic changes occur together with structural changes. Poverty decreases but inequality increases. Most causes of inequality in Indonesia are unexplained, but inequality exists mainly within a sector, instead of between sectors.

•• In Indonesia, there is a leap of growth from agriculture to service, despite the ‘old’ industrial sector not yet reaching maturity. •• Manufacturing development decreases and is not supported by improvements in manpower quality, resulting in decreasing productivity in the manufacturing sector. •• By using the Theil Index, it may be identified that inequality in a sector varies highly. •• Inequality in Indonesia is unexplained if we look at the high inequality within a sector and low inequality between sectors. It shows high diversity in one sector. When the manufacturing growth rate increases, inequality will decrease. When service industry growth increases, inequality will also increase. The reason is that service is a sector with high inequality due to the existence of skilled and non-skilled workers. •• Will inequality at the beginning of development increase and then decrease? Data shows that strengthening the industrial sector is very important to reduce inequality. •• The Kuznets curve occurs in Indonesia, but the causes of inequality remain mysterious due to many unexplained components. •• Does inequality have to be zero? What is the level of optimum equality? There is no research on this. The feeling of inequality may be an incentive for people to increase living standards.

Palupi Anggraeni: The Contribution of Natural Resources to Economic Welfare in Indonesia Natural resources in Indonesia have not served to support welfare. Investment level, instruction quality, and public participation are predicted to increase correlation between natural resources and welfare in Indonesia.

•• There is no agreement on the impact of natural resources on welfare. •• Natural resources of a country are assets, but some perceive them as a ‘curse’. A country without natural resources can have high growth. •• Indonesia holds a positive perception of natural resources. Indonesia is only one of four countries (out of the total 65 countries with abundant natural resources) that manages to reach high long-term investment and economic growth. •• The influencing variables that support the positive correlation between natural resources and economic welfare are institutional quality, investment and public participation. •• Natural resources have not yet served as a factor supporting welfare in Indonesia.

IMAGINE INDONESIA 2045

In 2045, everyone is equal in terms of not only the economy but also law. Become a developed country with economic growth in line with equality in law enforcement.

167 Graphic Recording

168 Imagine VI Gallery

169 IMAGINE VII: Ending the Vicious Cycle of Corruption and Inequality

Wednesday, August 9, 05:20 pm-06:30 pm Yogyakarta Room–Conventional Theatre

Key questions: •• What is a scenario to prevent ‘Indonesia in Corruption Emergency’? •• What is the role of open data in eradicating corruption? •• How to balance effectiveness and accountability in economic growth? For example, infrastructure development.

Tengku Munawar Chalil, Osaka University, Japan Latent Effect of Corruption to Decentralisation Choice and Competitiveness Nexus

Abraham Wirotomo, Executive Office of the President (KSP) Exploring the Human Mental Map: Economic Inequality and Corruption

Glenn Maail, Web Foundation Connecting the Dots: Using Open Data to Fight Corruption in Indonesia

Noor Syaifudin, University of Western Sydney, Australia The Relationship between Sustainable Development and Corruption: An Empirical Study of Indonesia

170 Tengku Munawar Chalil: Latent Effect of Corruption to Decentralisation Choice and Competitiveness Nexus Decentralisation affects the competitiveness of a country in the category of corruption levels of its local governments. In countries with low-level corruption, increased decentralisation can lead to competitiveness. The central government can set its optimal level of corruption and see whether local governments are accountable.

•• This research attempts to answer whether decentralisation is needed and what its best form is. The next question is whether good governance leads to better prosperity in decentralisation. •• Decentralisation aims to improve the efficiency of public services. This research is based on the assumption that the central government, which is relatively clean from corruption, has become inefficient. Meanwhile, corruption still occurs in local governments. •• The higher the fiscal transfer for regions with low levels of corruption, the higher economic growth will increase. •• Implications for policy: findings of this research recommend that the government should assess levels of corruption. If the risk of corruption is high, it is better for the government to implement centralisation. If the levels of corruption are low, it is better to implement decentralisation for public services. •• The government should put its trust in local governments to manage their own regions independently, even though the levels of corruption remain high. Corruption will remain, but it is more important to minimise the practice.

Abraham Wirotomo: Exploring The Human Mental Map: Economic Inequality and Corruption To combat inequality, it is necessary to identify the type of inequality first in order to formulate the appropriate policy to overcome it. Corruption should be countered by increasing the government’s performance efficiency.

•• Inequality in Indonesia has tended to rise over the last 10 years. Although quite stable in the period of 1960-1990, inequality has again increased since the 1998 economic crisis. •• Research to formulate ideology and political narrative behind a policy is needed to make public understanding and its implementation easier. •• This research uses the Zaltman Metaphor Elicitation Technique (ZMET), which has not been widely used. In this method, participants are asked to choose 10 to 14 images that they think describe inequality. The results can provide a map of human mentality. This research seeks to examine the relationship between inequality and corruption. •• One finding shows that inequality can be seen as something either just or unjust. Inequality, as measured by clear indicators, can be accepted by the public. For example, the same salary for well-performing civil servants and poor-performing ones is unacceptable to the public. •• The limitation of this research lies in the use of a qualitative approach, where results cannot be used to determine whether this mental map applies equally to everyone.

171 Glenn Maail: Connecting the Dots: Using Open Data to Fight Corruption in Indonesia Open data can be a tool against corruption in Indonesia. However, the data must meet a number of prior conditions, i.e. they must be made available and followed up. Accordingly, there are four things to be developed: 1) open data policy, 2) quality assurance of open data, 3) data analysis capability, and 4) redress mechanism to follow up corruption findings.

•• Transparency International research in five G20 countries examines the relationship and what the open data movement should do to contribute positively to the fight against corruption. The issue of corruption is related to strengthening the integrity of public institutions. •• The issue of open data is community empowerment. Public participation is not limited to reporting. Continuous public engagement in the fight against corruption needs to be facilitated by providing accurate and complete data and information. •• There are 30 types of data sets regarding anti-corruption programs. Our research uses 10 types of data related to public institutions. For example, data on public officials, the government’s use of resources in budgets, and data on government actors. The data must meet certain standards. Indonesia already has action plans (Open Government Partnership and the National Strategy) to deal with corruption, but still needs to implement a comprehensive open data policy. •• With regard to the quality of open data, of the 10 data sets examined only three types are available for Indonesia in various formats, and not in accordance with the Open Data Charter standards. Data on budgets (general), companies and procurement of goods and services, as well as expenditure, are not yet available. By establishing regulations, data quality is expected to improve. •• The action plan to be implemented is the redress mechanism, which should be integrated with the complaint management system. With the available data, the information must be followed up in the handling of corruption. •• Open data can be a tool against corruption. However, there are other elements to make open data an effective tool, i.e. public participation, provision of data that meet standards, capability to analyse data, and establishment of a redress mechanism. The realisation of these four things requires cooperation of all parties. Collaboration is crucial to realising these key elements so that open data can be an effective tool in the fight against corruption.

Noor Syaifudin: The Relationship between Corruption and Sustainable Development: An Empirical study of Indonesia Research shows that there is a negative relationship between the level of sustainability and corruption. Population density also affects the level of sustainability. The more densely populated, the more the level of sustainability tends to decrease. Therefore, governance quality must be improved, as it will affect sustainability. Exploitation of natural resources should be carried out with caution. Productivity and values of human resource development must always be improved.

172 •• According to the World Commission on Environment and Development (WCED), sustainable development has economic, social, cultural and environmental aspects. Anything that current generations use should not interfere with the benefits to be received by future generations. The practice of corruption can reduce such values. •• Corruption at some level can be beneficial for the economy, especially for poorly administered economies, if it is an enabler. The question is whether corruption disrupts the economy or is neutral. •• Corruption in Indonesia becomes latent because of its very mild threat. If a person is arrested for corruption, the punishment is only to return no more than 30 percent of the amount stolen. •• The more sustainable a province, the lower the level of corruption. •• Population density can also have an effect. The higher the population density, the lower the level of sustainability. This indicates a problem in the quality of human resources. The problem also encourages us to think about population growth. •• No literature has yet to explicitly state the negative relationship between the level of sustainability and corruption. During the period of this research, a significant negative relationship between corruption and sustainability was found. •• Anti-corruption initiatives have begun to focus on improving the quality of governance, value promotion, and natural resource exploitation.

IMAGINE INDONESIA 2045

In countries with low level corruption, decentralisation can encourage competitiveness. Open government and open data are effective tools against corruption in Indonesia.

173 Graphic Recording

174 Imagine VII Gallery

175 IMAGINE VIII: Look to the East: The Future of Indonesia

Wednesday, August 9, 17.20-18.30 Medan Room–Fish Bowl

Key question: •• Creating a new narrative about Indonesia’s national development •• What alternatives can project growth to reduce inequality in eastern Indonesia? •• The theme of the Indonesia Development Forum 2018 is regional disparity. What do you think could contribute to the theme?

Nuzula Anggeraini, Regional Development Board of West Southeast Maluku District Quo Vadis Border Region Development? A comparative study of regional development of three border regions in Indonesia

Angreine Kewo, Denmark Technical University Low-Carbon Economy Region of Eastern Indonesia’s Green Growth

Sri Rezeki Widuri, The University of New South Wales, Australia Narrating Indigenous Wisdom for Children: Promising Local Initiatives in Indigenous Folktales, Books Development to Improve Papuan Children’s Reading Motivation

Rambu Luba Kata Respati, Wira Wacana Christian University, Sumba Savannah Economy: An Alternative Perspective to Understand Regional Development in East Nusa Tenggara

176 Nuzula Anggeraini: Quo Vadis Border Region Development? A comparative study of regional development of three border regions in Indonesia There are still many disparities in border regions. The disparities exist not only with the central region but also between border regions. This study compares three islands/districts that share the same sea border: Natuna, Talaud and West Southeast Maluku.

•• Border regions, which are still considered an obstacle, should be seen as an opportunity zone. In Western Europe and North America, border regions are developed for cooperation to achieve growth. •• The government has shown concern through the allocation of infrastructure and education budgets. However, many benefits have not been felt by the people in border regions. •• The imbalance between border regions in the east and the west is highly visible. For example, Natuna is much more developed than Talaud. It can be measured by the larger budget of Natuna than Talaud. •• The island of Saumlaki in Southeast Maluku is actually closer to the city of Darwin, Australia, than any other large city in Indonesia. With such geographical situation, cooperation with Darwin should be enhanced to achieve more rapid progress in Saumlaki. •• Border regions are very complex. In the past, the approach of border regions was based on defence and security. However, around the year 2010 government policies started to use a welfare approach. There needs to be interaction in border regions to optimise their potential to produce economic opportunities. •• In future, the government is expected to make regulations that change borders from being barriers to gateways of opportunity with potential for cooperation that encourages growth.

Angreine Kewo: Low-Carbon Economy Region of Eastern Indonesia’s Green Growth The use of low-carbon technologies in Eastern Indonesia is needed to create eco-friendly development in the region. This study proposes the importance of a partnership with the quadruple helix approach to develop low-carbon regions to achieve better green economic growth. This partnership with the quadruple helix approach involves government agencies, private sector/industry, research and higher education institutions, and non-governmental organisations to develop green projects.

•• In North Sulawesi and other parts of Eastern Indonesia, development with the principle of reducing the amount of carbon (green growth) is a solution for sustainable development. Green growth can be implemented by using local resources. •• A partnership with the quadruple helix approach for the development of low-carbon regions to achieve better green economic growth becomes very important, especially for Eastern Indonesia. •• The target of East Nusa Tenggara is to be the best corn producer in Indonesia, as well as the pilot province for the implementation of practices of green economic growth. For this, a quadruple helix approach is required.

177 •• The advantage of implementing an environment-based/low carbon economy is low carbon emissions in the development process, so that a better standard of living can be achieved without damaging the environment. •• Support of local communities is needed to sustain the green economic growth agenda.

Sri Rezeki Widuri: Narrating Indigenous Wisdom for Children: Promising Local Initiatives in Indigenous Folktales, Books Development to Improve Papuan Children’s Reading Motivation Local story narratives without negative stigma about Papuan children have the potential to motivate children to be more studious and aspiring. The stories contain education on gender equality, compassion and non-violence, which have been the negative stigma of Papuans. All stories have local educational content through a more positive understanding of behaviours. Development and improvement of welfare are no longer just a matter of building physical infrastructure, but also mental infrastructure.

•• The process of ‘importing culture’ is often inevitable. It is not automatically considered bad. Responding to such a situation, we should do something to maintain and use local wisdom. •• Local cultures need to be conserved in the face of incessant new cultures that enter the region. Therefore, it is important to provide local content education from the early years. •• A number of initiatives led by local residents have been done to develop local wisdom. •• The growing negative stigma about Papuans is a challenge that prevents children from understanding Papua positively. •• The process of exploring stories by plunging directly into the community and promoting the folklore of Papua in 18 books that motivate them is one form of education through narrative stories. •• Literacy processes should involve giving meaning, as this also relates to the issue of self- existence.

Rambu Luba Kata Respati: Savannah Economy: An Alternative Perspective to Understand Regional Development in East Nusa Tenggara East Nusa Tenggara has a unique ecology with an expanse of savannahs that have special characteristics in terms of nature and culture. This is influential in determining the economic behaviour of the community. Regional development in East Nusa Tenggara can work better if it includes the economic perspective of the savannah.

•• There is negative stigma around East Nusa Tenggara, which is among the poorest provinces in Indonesia. There are three opinions as to the causes of poverty in East Nusa Tenggara: wasteful and lazy East Nusa Tenggara people, lack of natural and human resources, and inappropriate government policies. •• The perception of East Nusa Tenggara should be changed by using the perspective of a ‘Savannah economy’, which in essence is that the economic behaviour of a society is not solely influenced by the dynamics of the local economy, but is also determined bythe

178 interaction of nature and culture. •• Economic resources not only include goods and services, but also the ability of the community to manage what is around them. •• For the people of Sumba, the land is interpreted as female and the sky as male. Therefore, the people believe when it rains conception occurs, producing life. •• The Sumbanese people can recognise a variety of soil conditions. Less fertile soils are used for settlements and shepherding. •• With the soil conditions in Sumba having a savannah character, the use of all land can be optimised. There is no sense that existing resources cannot be used. This is done by upholding the perspective of a savanna economy.

Responses: •• Indonesia has good programs, but lacks collaboration. Collaborations involving quadruple helix partnerships can be prerequisites for implementing development. Collaborations can also be done through small projects. Comprehensive solutions require local community initiatives, without waiting for regional or central government. Funding can be obtained by engaging the private sector. Each region must have a database containing a list of local experts who understand local conditions and potential, so that the potential can be maximised appropriately. •• Despite globalisation, those living in Western Indonesia lack information about Eastern Indonesia and how to maintain local wisdom, especially in border regions. They have no idea of ‘Imagine Indonesia 2045’. •• Local wisdom becomes a challenge for border regions. The government could facilitate customary institutions in border regions to maintain local wisdom.

IMAGINE INDONESIA 2045

Diversity should be seen as an asset, rather than a liability. Border regions offer potential for an optimised economy. The optimism of development in Eastern Indonesia is based on the optimisation of local wisdom, supported by strong research.

179 Graphic Recording

180 181 Imagine VIII Gallery

182 10 August 2017 IMAGINE PLENARY: Insights from the Ministers

Thursday, 10 August, 09:00 am-10:30 am Java Ballroom

Key questions •• How do you imagine Indonesia 2045 if your programs are successfully implemented? •• What is the road map from your ministries to get to 2045? •• What should be changed from the current state of the program being proclaimed?

Prof. Dr. Nila Djuwita F. Moeloek, Minister of Health, Republic of Indonesia Indonesian Experiences in Resolving the Inequality of Health

Basuki Hadimuljono, Minister of Public Works, Republic of Indonesia Indonesia’s Infrastructure Development

Prof. Yohana Yembise, Minister of Women’s Empowerment and Child Protection Gender Empowerment and Child Protection in Indonesia

Hadi Prabowo, Acting Secretary General, Ministry of Home Affairs, Republic of Indonesia Regional Development

184 Prof. Nila Djoewita F. Moeloek: Indonesian Experiences in Resolving the Inequality of Health Current health challenges in Indonesia include child health and nutrition. Collaboration must be cross-sectoral and cross-governmental, as well as with the community. Challenges in the health sector include unevenly distributed health workers, mainly concentrated in Sumatra and Java. Nutritional issues are still dominated by stunting. Prevalence of stunting in infants aged under 2 years has reached 21.7 percent.

•• Inequality components: infrastructure, manpower, financial capacity, governance capacity, access to health services, preparedness of health facilities, quality of health services, coverage of health services, public health interventions (promoting and preventive), health status, responsiveness, financial protection. •• Health development strategic plans in 2015-2019 include three pillars: 1) The health paradigm, namely mainstreaming health in development. Promotion and preventive activities as the main focus and community empowerment; 2) Strengthening health care by improving access, especially at the primary level, optimising referral systems, and improving quality and health- risk based interventions; and 3) National Health Insurance with benefits, the insurance financing system, mutual cooperation, quality control and cost control. •• One focus of the Ministry of Health is on the improvement of hospital facilities and the availability of family doctors. Nusantara Sehat determined to realise a healthy Indonesia from Sabang to Merauke. •• The Ministry of Health and the Ministry of Fisheries launched the ‘Eat Fish Movement’, while the Ministry of Home Affairs launched ‘The Movement for a Healthy Community’, and the Ministry of Agriculture launched ‘Let’s Eat Vegetables’. •• The Healthy Indonesia Program takes a family-based approach focusing on minimum service standards at district and provincial levels and the Movement for a Healthy Community program.

Prof. Yohana Yambise: Gender Empowerment and Child Protection in Indonesia Women and children are the future assets to realise a developed country. However, this can only be realised if women and children are placed on a secure line. In Indonesia, gender equality issues are increasingly important. A joint commitment is built to achieve the goal of ‘Planet 50-50’ by 2030. However, the prevalence of physical and sexual violence is still quite high in Indonesia, sparked by patriarchal culture and alcoholism.

•• The issue of gender equality has become an important one for the president since September 2016, when he stated that a country is not yet developed if it cannot put women on a ‘safe’ line. His goal is for Indonesia to reach ‘Planet 50-50’ in 2030 by overcoming its patriarchal culture. •• The joint commitment is done through the ‘men for women’ campaign. •• Indonesia’s best gender development index is in Jakarta and Yogyakarta. •• Today’s children are a reflection of us in the future.

185 •• In the SDGs, gender equality becomes one of the focuses to bring Indonesia to ‘Planet 50-50’. •• Women and children are the ‘obligatory matters’ for local governments (Law No. 23 of 2014). The real investment should be in children, for future generations to be better than now. •• The prevalence of physical and sexual violence is quite high in Indonesia. Triggers are the culture of patriarchy and alcohol. •• Law 17 of 2016 is an effort to combat child sexual violence.

Basuki Hadimulyo: Indonesia’s Infrastructure Development The focus of infrastructure development of the Ministry of Public Works and People’s Housing (PUPR) for 2015-2019 is an infrastructure that is a logical and strategic choice to improve Indonesia’s competitiveness. To bridge regional disparities, the PUPR program aims to integrate the 12 metropolitan area developments, 10 special economic zones, 10 strategic areas of national tourism, border areas, multimedia connectivity and more. Acceleration strategies include improved regulatory and legal frameworks for ease of licensing and land acquisition, innovative financing (private sector engagement) and the application of research and technology results.

•• The Ministry of Public Works and People’s Housing infrastructure development for 2015-2019 focuses on infrastructure development which is a logical and strategic choice to enhance Indonesia’s competitiveness. •• The ministry works with the concept of territoriality to integrate infrastructure programs, namely communications, transportation, housing, sanitation and water. This is divided into 35 regions. •• The strategy is a breakthrough/innovation for acceleration that includes: °° Regulation and law, especially ease of permits and land acquisition. °° Coordination among institutions. °° Innovative financing (private sector engagement). °° Detailed leadership with ‘money follows program’. Supervision and evaluation are inherent and more functional. °° Implementation of research and technology results. For example, the construction of the Antapani flyover in Bandung could be completed within four months. •• Build to shape and trigger new economic dots and regions. Fight imbalances and gaps.

Hadi Prabowo: Regional Development Regional development is linked to political stability and ease of investment. Thus, a number of measures have been taken to improve and accelerate regional development, in particular to achieve food sovereignty, energy, infrastructure and connectivity improvements, and facilitation for ease of business and investment in the region.

•• Number of governments: 34 provinces, 99 municipalities, 431 districts and 75,000 villages. Hence, for the alignment of the 2017 Regional Medium-Term Development Plan (RPJMD) and the National Medium-Term Development Plan (RPJMN), the following are required:

186 °° Ensuring the synergy of the main target of development and the direction of development policy set forth in the RPJMN is a priority in the RPJMD. °° Harmonisation of central-regional and inter-regional relations in order to achieve the basic goals of national development. °° Optimising the use of resources efficiently, effectively, equitably and sustainably. °° Adjustment of central and regional development budget allocations. •• The priorities of the use of Village Funds (Dana Desa) are: 1) infrastructure, 2) community empowerment, and 3) non-priority activities as long as the development and empowerment activity requirements are met. •• Allocation and absorption of Village Funds for the period of 2015-2017: °° 2015: Ceiling of Rp20.7 trillion with 74,093 villages. Realisation of 90.22 percent. °° 2016: Ceiling of Rp46.98 trillion with 74,754 villages. Realisation of 99.83 percent. °° 2017: Ceiling of Rp60 trillion with 74,910 villages. •• Development in border regions based on NawaCita aims to build Indonesia from the margins, by strengthening regions and villages within the framework of the unitary state. The strategies adopted are the settlement and affirmation of state borders as well as the construction of border areas, with priorities of 10 (of 26) Border Areas and 187 priority locations in 41 districts/ municipalities and 13 provinces. •• Details of border area development activities include food sovereignty, energy sovereignty, infrastructure and increased connectivity. •• Facilitation of ease of business or investing in regions is one of the development focuses, as are ease of obtaining loans, taxation, cross-regional trade, electricity availability and registration of assets.

IMAGINE INDONESIA 2045

Collaboration between sectors and between governments: the private sector and public sector are effective. Women and children are assets to Indonesia’s progress. Infrastructure development enhances Indonesia’s competitiveness. Political stability and ease of investment are key to successful regional development.

187 Galerry Imagine Plenary

188 IMAGINE IX: Technology and Inequality: Where Are We and Where We Will Be

Thursday, 10 August, 10:00 am-11:00 am Yogyakarta Room–Conventional Theatre

Key questions: •• Inspiration for the young (millennial generation) and the application of technology

Sarah Hobgen, Charles Darwin University, Australia Free Data and Open Source GIS Software: New Opportunities for Local Government to Map, Plan and Monitor Natural Resources

Diastika Rahwidiati, PulseLab Jakarta Tech for Drought Resilience

Indriaswati Dyah S., UNSW Law School, Australia The Development of Regulations Relating to pre-2008 Internet Content Law and the Implications of these Regulations

Sumekar Tanjung, Universitas Islam Indonesia ICT Literacy with Empowering ‘Model 8’ in Village Website Development in Tanah Bumbu District, South Kalimantan

189 Sarah Hobgen: Free Data and Open Source GIS Software: New Opportunities for Local Government to Map, Plan and Monitor Natural Resources This presentation describes the assistance that has been provided to open opportunities and empower local governments to process their own data through free data and open source Geographic Information System (GIS) software. This allows issues to be addressed more quickly and appropriately with the inclusion of local knowledge.

•• The initiative is based on experience in East Nusa Tenggara, where many consultants went, bringing and using inaccurate GIS data and maps. The village names are mixed up and, even worse, a village is seen to be located on the sea. It is, however, very difficult to question the accuracy of the contents of the map as it is already official. How can provincial and local governments process data by themselves? •• It is necessary to incorporate local knowledge and findings from the field into the map to check data accuracy. Many reports from the office are submitted in the form of global positioning system (GPS) points that are not based on maps. •• Success story: the creation of a forest coverage map in Central Timor District made by the staff of the Health Service in cooperation with Bappeda (Regional Development Planning Board). Map preparation is not difficult, but the problem is that maps can be considered unofficial or unimportant because they are not made by consultants or people whoare considered experts. The main objective of this program is the availability of data that can be processed at provincial and district levels. •• There are many links online that contain free material available in book or tutorial form, in video format and in English and Indonesian: °° www.sagagisindonesia.wordpress.com (Indonesian) °° www.sagatutorial.wordpress.com (English) °° Facebook Group: ‘Remote Sensing’ and ‘GIS with SAGA’ •• Various materials have been used in Universitas Nusa Cendana, Universitas Halu Oleo in Kendari, and Universitas Hasanudin in Makassar. On the Facebook group, pictures can be uploaded quickly so that it can be used to resolve various problems. GIS is now much more user-friendly. Video tutorials are available on YouTube. It is expected that district and provincial governments can manage their own data.

Diastika Rahwidiati: Tech for Drought Resilience The importance of the availability and analysis of data to be used as information should be followed by interpretation of data, in order to be the basis for decision making. The PulseLab project for Drought Resilience shows examples of data analysis practices and presentations. Therefore, relevant stakeholders can understand the meaning of the data and can follow up. The Presidential Staff Office (KSP) has adopted PulseLab as an early warning system. Sri Lanka has asked for help to develop the same technology.

•• PulseLab focuses on big data analysis and how humans understand and interpret data.

190 Analysing data requires not only coding skills, but also the ability to see the issues in the data and interpret them. There is a lot of data now available that can be used. •• Case in point: drought caused by El Nino affected the climate of 11 countries. This disaster affected agriculture in Indonesia, especially in the poor and remote areas. The analysis of this is not new. All that needs to be done now is to combine the many data sets and see interactions and patterns. •• The National Socioeconomic Survey data, rainfall data, surveys for vulnerable food areas, and the data vegetation health index, are examples of data that can be used. The next thing is to automate data analysis and make visualisations. Thus, the user can see the interactions between variables to see the level of impact. •• The data show rainfall vulnerability and anomalies throughout Indonesia–which areas are affected by drought and require government treatment. The results of the combined data will be viewed in map form, allowing the user to search for troubled areas. •• The use of this software has been adopted by the Executive Office of the President (KSP) as an early warning system. The World Food Programme has also introduced this to various country offices. Due to its utility, the program will be made open source so that it can be used more widely. •• Data for this program already exists, and is owned by the government. Furthermore, ease of access and ability to interpret it are required. How the platform to interpret data is available and can be accessed more easily by the public should be considered. •• Commemorating Technology Awakening Day, people must use it wisely, without becoming servants of the technology. Many innovations in the country can be used for the benefit of Indonesia. Therefore, community participation and readiness of more vigilant and active citizens is required.

Indriaswati Dyah S.: The Development of Regulations prior to the 2008 Electronic Transaction Law, and the Implications of These Regulations Rules related to the Internet should be part of the solution, not part of the problem. The paradigm of the 2008 Information and Electronic Transaction Law (IET Law) views the Internet as a threat and is cantered on the prosecution process. The process of formulating the law was dominated by technology practitioners, without involving views or input from internet users. As a result, the regulation does not mention any space for innovations that could encourage positive aspects of the internet and its benefits to society.

•• The Internet has become part of the lives of many people. A total of 130 million of Indonesia’s 250 million people are connected to it. On average, they spend four hours each day viewing electronic screens (gadgets, laptops or televisions). So much information is shared via the Internet. A law was formulated to allow for the Internet to be a useful forum for social development. •• The widespread use of the Internet is governed by the IET Law, which contains punishment rules, for example, Article 27 Paragraph 3. The research findings show that, although the Internet is used by so many people, in the process of formulating the law, only a few actors were involved. They were technological practitioners, and there was minimal public discussion

191 or involvement of Internet end users. As a result, the language used in the Law is highly technical and does not regulate the potential for Internet use innovation. •• Institut Teknologi Bandung (ITB) has initiated the procurement of Open BTS (base transceiver station) so that the wireless telecommunication network is not controlled only by big companies, such as XL and Telkomsel. It took seven years for ITB to obtain permission from the Ministry of Information, and even then, only permission for the pilot was obtained, not for the development. At the same time, the government gave Google permission to develop Project Loon. •• Another example of innovation is the online-based transport service, Go-Jek, which encourages job creation (driver) and benefits the users. But government policies do not support the existing potential. For example, the Ministry of Transportation issued a regulation that vehicles with black license plates should not be public vehicles. •• The public needs to pay attention to the development of Internet regulations. There must be a paradigm shift in viewing the Internet not as a threat, but as a potential for innovation. In addition, measures to open Internet access are required so that all people in Indonesia have access to the Internet. There is still a problem: of the 130 million Internet users in Indonesia, most are still concentrated in Western Indonesia.

Sumekar Tanjung: ICT Literacy using ‘Model 8’ in the Development of Village Web Sites in Tanah Bumbu District, South Kalimantan This study describes the empowerment plan of village officials through the improvement of information and communication technology literacy so that they can manage their own village websites. Community service would be more useful if the members of the community themselves were actively contributing.

•• Since 2012, Tanah Bumbu District in South Kalimantan has provided infrastructure and voluntary information and communication technology experts to create websites for 101 villages. In 2015, the district received an award associated with the village website. •• Internet management and use is under the authority of each village. Obstacles encountered include geographical factors, lack of knowledge and capacity of village apparatus, reluctance to run a website at the village level, and lack of ability to use computers for the Internet. •• In Tanah Bumbu, development is not only carried out physically but also non-physically, for example, with ICT literacy. Community service with the ‘Model 8’ empowerment model is suitable and flexible for Asian people, especially for Indonesia. Stages that must be passed include identification, exploration, selection, search, assessment, presentation, and so on.

Responses: •• Technology can be used in policy development for the public. How can technology improve accessibility for people with disabilities? Examples include distance lectures, which are accessible to people with disability. Second, technology can disseminate information on Sustainable Development Goals for people with visual impairments, including documents in braille or audio.

192 IMAGINE INDONESIA 2045

Indonesia Gold, a developed country from all aspects: social, economic and environmental. Transformation is done based on data, information and knowledge. The government and the public are passionate about sharing data, information and knowledge easily, freely and without limits. All for the sake of innovation and policy improvement.

193 Graphic Recording

194 195 Imagine IX Gallery

196 IMAGINE X: The Impact of Financial Inclusion and Social Entrepreneurship on Income Inequality

Thursday, 10 August, 11:20 am-12:30 pm Yogyakarta Room–Conventional Theatre

Key questions: •• What does it take to achieve more than access and to promote inclusive finance?

David Soukhasing, Angel Investment Network Indonesia (ANGIN), United Nations Development Programme (UNDP) Social Finance and Social Enterprises: A New Frontier for Development in Indonesia

Aluisius Hery Pratono, Surabaya University Credit Unions: The Social Cooperative Model for Financial Inclusion in Indonesia

Nika Pranata, Indonesian Institute of Sciences (LIPI) Is the Fishery Sector in Indonesia Financially Inclusive?

Ubaidillah Nugraha, University of Indonesia Strategy of Acceleration of Financial Literacy as a Tool of Public Policy in Achieving Inclusive Finance Industry

197 David Soukhasing: Social Finance and Social Enterprise: A New Frontier for Development in Indonesia A study of the development of social enterprises in Indonesia reveals a gap between social enterprises, investors and enablers. The gap occurs in financing, financing instruments and competencies. This study recommends exploring the use of blended finance models to address issues surrounding the enterprise social life cycle, such as agro- market links, SDG funds and Indonesia’s blended finance for agricultural value chains.

•• The three main actors in the social finance landscape are social enterprises, investors and enablers. •• In 2016, the number of social enterprises in Indonesia was over 300, covering agriculture, health, education and financial services. But as many as 70 percent of them were not yet ready to be funded, while 20 percent were ready with support and 10 percent were ready with investment. The number of female entrepreneurs has increased (25 percent). •• Interest in investing is rising among investors. Total investment over the past two years was US$20 million. There are 30 active investors in Indonesia, most of whom are foreign investors and 25 of whom are prospective investors. •• Challenges in social enterprise development include: about 70 percent of social enterprises are not ready to be funded, largely due to low potential to be enlarged. About 70 percent of social enterprises are trapped in pre-seed and seed stages. They seek funding of US$10,000 to US$100,000. The impact investors have is in the range of funds of US$1 million. In the early stages, access to capital is limited. Scalable business models are limited, and there is a lack of competence/expertise in various aspects of business, such as financial management. •• Most of the investors came from abroad and only three investors were from Indonesia (YCAB Ventures, Kinara and ANGIN). The disparities in financing, a legal framework that remains a barrier to investment, limited access to information and reliable services such as legal services, are a challenge for investors. •• For enablers, the challenge is the inadequate number of those working specifically in particular sectors, lack of mentors with specific and tailored expertise, limited connections to social investors, and weak key performance indicators (KPIs) to measure success. •• Challenges related to financing instruments are that social enterprise is more comfortable working with debt instruments, while impact investors work in equity. •• Blended finance is an initiative that combines public and private capitals to finance social enterprises to achieve the goals of the SDGs and enhance the financing effects of international development agencies. •• In June 2017 an online platform was launched to help raise funds for entrepreneurs: www. connector.id.

198 Aluisius Hari Pratono: Credit Unions: the Social Cooperative Model for Financial Inclusion in Indonesia This study aims to offer a model of social cooperative typology as a tentative model for Indonesia. The governance of the social cooperative model should be built by building consensus, beginning with capacity building and financial literacy to build a common consensus in the face of malignant agents, attractive products, and large loan credit needs. The decision-making process is based on a general assembly with equal voting power. Social cooperatives must also be independent from legal, financial, management and governance perspectives.

•• The research identifies social enterprise models in 200 countries around the world. •• In Indonesia there are four social enterprise models: 1) social non-profit organisations or non- profit social organisations, 2) entrepreneurial non-profit businesses, 3) community social enterprises, and 4) social cooperatives. •• The goal of establishing a social enterprise is to achieve financial inclusion: providing financial access for the poor. To achieve this goal requires financial education, which begins with financial literacy. •• To fulfil the common good, this form of enterprise returns to cooperative principles. The common interest is an agreement among members to become financially independent. •• The entrepreneurship orientation includes microfinance products: the annual interest is4 percent, even though profit is not the ultimate goal; proactive: networking with local communities by building trust; taking risks: investing resources in social capital; innovative: combining modern financial systems with local values; autonomy: organisations are encouraged to be independent in financing.

Nika Pranata: Is the Fishery Sector in Indonesia Financially Inclusive? The fishery sector in Indonesia is not yet financially inclusive. The distribution of fishery credit is only 0.3 percent of the total national credit. This study shows that about 90 percent of actors in the fishery sector have never applied for credit for fear of not being able to pay the instalments, having no collateral, and not understanding the application procedures. Several recommendations are proposed, particularly with regard to the use of fishing boats as collateral for credit applications, assistance to crew members who do not meet credit requirements at all, and empowerment of rural banks (BPR) to lend.

•• Despite Indonesia being a maritime nation, the contribution of the fishery sector to GDP is only 2.5 percent. The distribution of fishery credit is only 0.3 percent of the total national credit. •• Opportunities in applying for and obtaining credit depend on the ratio of income over expenses: income levels are important to determine eligibility in obtaining credit. The next factor is the type of job, the length of work (accumulation of wealth and experience), and the number of dependent family members. •• Among several types of business actors in the fishery sector, aquaculture farmers have the greatest opportunity to obtain credit because they have a credible collateral in the form of an

199 aquaculture certificate. Fishermen have the lowest chance due to bad saving behaviour and carelessness in using money. They also have no collateral. They usually use the money to buy tools or small boats, not other assets. •• Approximately 90 percent of fishermen never apply for credit for fear of being unable to pay the instalments, having no collateral, and not understanding the credit application procedures, as described above. •• Other obstacles are the level of risk that makes banks reluctant to finance the marine sector and low financial literacy. •• The research results conclude that the fisheries sector is not inclusive, and is still below the agricultural sector. •• Research produces a number of policy recommendations, including: °° Policymakers set up special regulations that stipulate that ship certificates can be used as collateral, but the bank does not want to accept this collateral because of the high risk, i.e. the ship can be sold without a certificate. °° The Ministry of Marine Affairs and Fisheries (KKP) program to record the fishing boats and issue certificates needs to be accelerated. °° A third party guarantee is required to mitigate the risk. °° Ship ownership regulations should be like land motor vehicles, in order to become collateral to comply with banking prudential principles. °° It is almost impossible for crew members to get credit so there needs to be some kind of social assistance to help them. °° The government should give more roles to rural development banks (BPR). Data show that the credit distribution of BPR is better than commercial banks.

Ubaidillah Nugraha: Strategy of Acceleration of Financial Literacy as a Tool of Public Policy in Achieving Inclusive Financial Industry In recent years, financial literacy has played an important role in global financial reform and has become one of the key tools of financial sector policy in the world. Good practices and lessons from several countries (Brazil, Australia and Singapore) have become references, such as political commitment, form of collaboration, and clear targets. There are also specialised organisations, integration into the curriculum of education, strong financial sector integrity, and the use of financial platforms, segmentation and responsibility sharing, and the existence of policy networks in shaping an inclusive financial industry.

•• In the last 30 years Indonesia has lost the momentum to become a developed country, from the oil boom era of the 1970s and the ‘Asian miracle’ of the 1990s. This is due to poor governance, corrupt practices and unpreparedness for the financial crisis. The 2015-2030 era will be the third chance for Indonesia to experience a demographic dividend, with young residents who will be the subject of this momentum. •• One of the indicators that influence these ratings is access to education and literacy. One part of literacy is financial literacy. •• Financial education is needed for early prevention of financial crime. Brazil is one of the countries that succeeded in revolutionising education and finance. To overcome the lag in the

200 field, Brazil has revolutionised both fields in the last five years. The experience of financial literacy and inequality in Brazil is interesting to learn from. •• Challenges to social enterprise include: °° The need for strong political commitment from the highest authority in campaigning for a comprehensive financial literacy strategy, with a choice of actors ranging from presidents, the finance ministry, financial services authorities, and educational institutions. °° Collaboration between fellow stakeholders in financial education: financial authorities, the private sector, the education sector, media and law enforcement agencies. °° The importance of having clear targets and organisations that specialise in social enterprises, with sustainable structures and programs. Similarly, the establishment of a special unit under the Indonesian Financial Services Authority (OJK). °° Integration of financial education into the overall education curriculum by considering the level of education and the material. °° Responding to ignorance in the integrity of the financial sector. Ethical induction and integrity through financial literacy are important. °° The digital platform as a main tool in financial literacy. °° Segmentation of financial education approaches across industries (no one size fits all). °° The division of responsibilities among market participants in order to educate the community with a persuasive step to grow the market. °° Engage in international cooperation (policy network). °° Conduct ongoing reviews and supervision of all financial literacy initiatives.

IMAGINE INDONESIA 2045

Banks in 2045: motivation not to seek profit, but for the common good. Bank for the poor, bank with the poor, bank of the poor. People feel they own the bank. The hope is that in 2045 bank accounts are 100 percent inclusive.

201 Graphic Recording

202 Imagine X Gallery

203

INNOVATE I: The Role of Development Partners in Addressing Inequality

Thursday, 10 August, 11:00 am-12:15 pm Java Ballroom

Key questions: •• Present key innovations from your program related to inequality in Indonesia. •• In your view, how can we be serious about the development partnership? What is needed to make that happen? •• How to deal with the scenario of middle-income trap in Indonesia in terms of programs with development partners? •• What do you think the new development paradigm of Indonesia is?

Chris Tinning, Chief Economist–Development, Department of Foreign Affairs and Trade, Australia The Importance of Knowledge Sharing

Perin Saint Ange, Associate Vice President, International Fund for Agriculture Development (IFAD) The Role of IFAD in Supporting Indonesia’s Agricultural Sector

Rolande Simone Pryce, Operations Manager Indonesia and Timor Leste, the World Bank Engaging the Private Sector in Development

Winfried F. Wicklein, Country Director – Indonesia, Asian Development Bank Public-Private Partnership

206 Ibrahim Ali Shoukry, Resident Representative, Islamic Development Bank-CGO Indonesia Islamic Development Bank’s Partnerships in Indonesia

Chris Tinning: The Importance of Knowledge Sharing Development partners can contribute to encouraging the flow of information, exchange experiences, and learn international best practices that may be applicable in Indonesia.

•• The role of the private sector becomes important in providing support and sharing of experience on development financing strategies. Governments and the private sector can work together to mobilise financing to achieve development targets. Governments and communities alike have an important role to play. •• The process of learning about experience and good practice in the international environment can be used as a reference for development in Indonesia. For example, the importance of evidence-based policymaking. The use of advanced technological systems needs to be developed to assist government tasks. •• Problems of middle-income countries are very complex and involve multi-sectoral issues. This requires many comprehensive solutions that include the right decision-making and availability of financing. In addition to Indonesia, many countries are caught in middle-income traps.

Perin Saint Ange: The Role of IFAD in Supporting Indonesia’s Agricultural Sector The International Fund for Agricultural Development (IFAD) as one of the development partners applies gender mainstreaming in its programs. The special focus is on support for the sustainability of the agricultural sector by taking into account the value chain, as well as opening and creating an enabling environment conducive to sustainable development.

•• IFAD as an international financial organisation that serves as a resource provider tohelp address issues of inequality in Indonesia, which is also a global concern. •• Rural communities have access to sanitation, production and capital in their daily lives. The task of IFAD is to mobilise diverse resources and invest in the rural poor to get out of poverty. •• There is a large leakage of agricultural yield that can be harvested and distributed. Food is wasted when in storage, distribution or packaging, and there is insufficient effort to reduce this leak. •• The private sector also expects public sector involvement to be able to assume investment risks together. Conducive enabling environment conditions will undoubtedly trigger the private sector to become involved and work efficiently.

207 Rolande Simone Pryce: Engaging the Private Sector in Development The private sector and civil society organisations can work together. The involvement of the private sector in development, particularly infrastructure development, requires the creation of a conducive atmosphere–an atmosphere that supports the acceleration of growth, as implied in the phrase ‘getting rich before the elderly’.

•• The World Bank has a working team that focuses on raising cooperation with the private sector; its main goal is to alleviate poverty and improve welfare. Currently, inequality is an issue of great concern. Cooperation with the Indonesian government is established through the provision of technical assistance, implementation of development, sharing of experience from abroad, and financing in the form of support systems in order to implement the program and achieve the goal. •• In a publication on issues of inequality in Indonesia from 2015, it was noted that children in Indonesia had difficulty accessing education due to inherent birth defects, for example because of malnutrition in absolute poverty conditions, or stunting. For this purpose, a supportive and collaborative action plan is established to support Indonesia. •• One of the things that need to be addressed to overcome the problem of inequality is the workforce. Indonesia faces the problem of cheap but uneducated wage labour. Increasing the quality of labour, especially the younger generation, is important to note. Relevance and skill enhancement are important for populations that are not shock-resilient (deaths of family members, inflation, lay offs), for example through Program Keluarga Harapan (PKH). Here the role of the World Bank is to help Indonesia expand and enlarge the scale of PKH coverage. •• Fiscal policy has an impact on inequality, but transfers from the Ministry of Finance actually have an insignificant effect on increasing GDP. The precise placement of financing inthe program should be done on programs that have the greatest impact. •• The private sector needs to be encouraged to participate further. If Indonesia wants to be a developed country, acceleration in economic growth is needed. One feasible way is to broaden the involvement of the private sector more intensively. It is also necessary to create a framework/program to attract private sector interests to invest, for example in infrastructure.

Winfried F. Wicklein: Public-Private Partnership Financing strategies are important in the effort to involve the private sector, such as public private partnership (PPP) schemes. Involvement of the private sector and civil society organisations requires an appropriate formulation of innovation.

•• Indonesia is one of the Asian Development Bank’s largest clients, providing a wealth of financial resources in human resource development (skills), economic governance (technical assistance program implementation) and infrastructure. The principle of inclusiveness is always taken into account in the work of these three areas. •• Financing strategies need to be given attention in an effort to involve the private sector, in which case PPP schemes are important. Appropriate formulation of innovation is needed in the involvement of the private sector and civil society organisations.

208 •• The Asian Development Bank is working with the Ministry of Public Works and Public Housing to innovate in the procurement of irrigation. A number of new technologies are available in the market. There is an opportunity for Indonesia to make the leap by relying on technology and innovation in increasing productivity. •• In terms of innovation and technology for development partners, ADB hopes Indonesia can adapt and overcome its lack of progress, as the systems used are often incompatible with those available in developing countries. •• For development partners, working in Jakarta is easier than in other areas. This is a challenge because it contributes to deepening the gap between the centre and the regions.

Ibrahim Ali Shoukry: Islamic Development Bank’s Partnerships in Indonesia In Indonesia, the Islamic Development Bank works in partnership networks through cooperation in infrastructure and financial inclusion. Success stories in Indonesia, for example in water management, are replicated by IDB member countries. The proposal for Indonesia is to open itself to IDB members, which can be done through PPP schemes.

•• IDB provides financing for member countries. In Indonesia, IDB works in partnership networks, through infrastructure and financial inclusion. Both of these fields have a significant role in overcoming inequality problems. •• In the field of education, IDB works with 30 universities for capacity building to encourage innovative products. •• Suggestion that Indonesia consider opening up for IDB members through PPP schemes.

Responses •• Challenges and limitations are not only access to land, but also access to clean water, sanitation, technology and others. This issue is so complex that it requires hard work, involving various sectors. The government and development partners can work together to find mechanisms for accessing land for the people.

INNOVATE

The exchange of information, experience and learning best practices in local, national, and international areas is paramount to reducing inequality. Sustainable development is supported by the attention of the value chain, as well as opening and creating and ‘enabling environment’.

209 Innovate I Gallery

210 INNOVATE II: Affirmative Policy on Fiscal and Investment to Reduce Income Inequality

Thursday, 10 August, 11:00 am-12:15 pm Padang Room–World Cafe

Key question: . Who determines a policy and who implements it?

Yustinus Prastowo, Executive Director of the Centre for Indonesian Taxation Analysis (CITA) Tax Policies in Reducing Income Gaps

Edimon Ginting, Director of Economic Analysis and Operational Support Division, Asian Development Bank Addressing Inequality

Anggito Abimanyu, Member of the Executive Board of Hajj Financial Management (BPKH) Asset Ownership as an Investment Factor

Anton Hermanto Gunawan, Executive Director, Mandiri Institute Financial Inclusion in the Agricultural Sector

Tung Desem Waringin, Expert on Marketing and Investment Tax as a Policy to Overcome Inequality

211 Yustinus Prastowo: Tax Policies in Reducing Income Gaps Tax challenges in Indonesia: how to build better systems for tax identification and tax compliance, and make taxes a redistribution tool. Recommendations to overcome these challenges are to apply inheritance taxes, as in Japan, and maximise taxes on transactions and excise duties.

•• In Indonesia, taxes have not been able to become a redistribution tool. According to statistical data, tax revenues increase, but inequality also increases. •• The challenge is how to revise the tax structure so that people who can afford to pay higher taxes pay more than those who cannot afford it. In addition, how to build good systems for tax identification. •• The problem is that there is no way to reach people who do not pay taxes, and there is an unintegrated information system for tax amnesty. •• Based on OECD data, countries with high redistribution are able to decrease inequality more effectively. •• The recommendation is to focus on ‘the top 1 percent’ by taxing inheritance (up to 60 percent). For example, inheritance tax in Japan is 60 percent, to be distributed to the needy. Then, expand the tax percentage for the middle-income community compared to low-income, transaction tax, and excise tax.

Edimon Ginting: Addressing Inequality There have been many policies to address inequality in Indonesia, but they are still constrained in implementation. To address inequality in Indonesia, the focus should be shifted to education, which contributes to inequality. We must also pay attention to the development of technology and learning cycles by utilising evaluation results for policy improvement.

•• Inequality occurs because upper-class earnings have increased very rapidly and are not taxed effectively. The imbalance of asset ownership, inequality of opportunity, and disparity of service are other contributing factors. •• Policies to tackle inequality are numerous but are still constrained in implementation. Examples of policies implemented are ‘one stop policy’, special economic zones and export incentives. But such policies are not progressive enough to reduce inequality. •• Innovations that can be implemented related to the lack of job opportunities include encouraging special economic zones by creating strong backward and forward links. •• Education contributes to inequality; this can be seen from the lower socioeconomic community’s ability to enter universities, at 10 percent less. In addition, education is not just a matter of years of education. For example, in Thailand years of education and income levels increased, as they were accompanied by expanding employment and improvements in the quality of education. •• Innovation and technological development are also needed. There must be a willingness to learn from mistakes and a process to encourage the knowledge cycle, with supervision and evaluation, as well as efforts to utilise the evaluation results for future improvements.

212 Anggito Abimanyu: Access Ownership as Investment Factor Ownership of assets such as land, property, technology and others is monopolised by a handful of people, but the population is large. Unchanged over the past 30 years, this indicates that inequality has not changed. Overcoming this concentration of ownership cannot be done through fiscal policies alone. We must also pay attention to racial/ethnic- based inequalities that are growing and can be dangerous.

•• In Indonesia, the asset holdings are few, but the population is large. Property becomes a source of economic ownership, and a source of inequality. •• Land and property ownership is monopolised. ICT assets and properties are held by just a few of the same names. This becomes a source of inequality. For 30 years, there have been no new players: those who rule the assets are the same. •• Inequality has not changed since the New Order; only its concentration has changed. The current concentration is on retail companies and large companies whose shares are owned by foreigners. •• To address the concentration of business ownership by large foreign companies requires fiscal policies that are strong enough to overcome inequality. •• Racial/ethnic-based inequality is actually more dangerous. Earlier it was only indigenous and non-indigenous, now it has become more primitive with the growing strength of identity politics and the manipulation of primordial issues in the political sphere.

Anton Hermanto Gunawan: Financial Inclusion in the Agricultural Sector Financing constraints faced by farmers should be handled in order to realise financial inclusion. One way to make this happen is access to credit. However, banks face difficulties accessing the lower socioeconomic community, as farmers are still heavily dependent on landlords in matters of lending. One of the efforts to overcome inequality is to support Indonesia’s developing capital market.

•• The issue of financial inclusion in the agricultural sector lies in the financing constraints faced by farmers. This is influenced by information gaps and beliefs. •• Kredit Usaha Rakyat (small business credit) still cannot reach the poorest. •• Banks still have difficulties penetrating poor communities. Instead, people depend on village elites for financing. Farmers are highly dependent on landlords (consumption, loans, etc.). This chain is difficult to break. •• Financial deepening for pro-poor investment: most incoming funds are short term, but financial donations are longer. The bank interest rate is high. •• Financing for infrastructure development should be supported. •• Corporate bonds have not been developed and have not focused on financing projects. To overcome inequality, Indonesia’s capital market must develop.

213 Tung Desem Waringin: Tax as a Policy to Overcome Inequality Refusal to pay taxes departs from ignorance, incompetence and unwillingness. Therefore, innovations that should be undertaken include sector-by-sector tax collection, special divisions for audits and improvements, whistle blower incentives, and higher taxes for investment or foreign ownership. In addition, financial literacy education should be provided in schools to encourage investment by individuals. There should be government assistance for consulting business development and financial management.

•• The reasons people do not obey and pay taxes are that they do not know, cannot (because of low income), or do not want to. •• Proposed innovations that could be done: °° Taxes must be collected per sector, taught, and guided. °° Whistle blowers should earn revenue share. °° There should be a special section of the tax division to find out the current errors and take corrective action. °° Foreign investment may enter but should be subject to higher taxes. Foreign investment is encouraged to build subsidised homes. •• Inequality occurs because of unequal education and courage. To overcome this there are a number of steps: 1) financial literacy education at the school level (for investments), 2) rules governing 5 percent human resources for employee education, 3) incentives from Program Keluarga Harapan (PKH) should not be given sustainably as they must be evaluated, and assistance stopped when the family economy improves, and 4) government assistance for consultations to grow business and manage finances.

Responses: •• The tax ratio in Indonesia is still low. The solutions are to revise the law on taxation and raise the level of non-taxable income for non-productive age. There should also be a policy of how to prevent ‘free riders’: all taxpayers pay their taxes. •• Class-based policy approach. For the poor, there needs to be a financial management system that allows the transfer of funds from the central government to villages. The middle class needs ease of access. The upper class needs to comply with rules and a progressive tax system. •• Social spending (subsidies) must have a limit, for example, only until income increases, for a maximum of two years. Invest in research and spread the results across the community. •• Public policies must be flexible and adopt experiences to be used to create innovative policies.

INNOVATE

Fiscal policies to reduce inequality can be focused on improving taxation systems and making taxes a redistribution tool. In addition to fiscal policies, focusing on education, financial literacy and government assistance to grow businesses and manage finances is a strategy to reduce inequality.

214 Graphic Recording

215 216 217 218 Innovate II Gallery

219 INNOVATE III: Combating Poverty and Inequality through the Provision of Basic Services

Thursday, 10 August, 11.00-12.30 Medan Room–Fish Bowl

Key question: •• Determine a poverty reducation agenda that goes beyond basic services.

Prof. Rema Hanna, Scientific Director, Abdul Latif Jameel Poverty Action Lab (J-PAL) Southeast Asia Social Protection in Indonesia

Sherria Ayuandini, University of Amsterdam Hidden Affluence and Perverse Consequences of Conditionality - Insights on PKH

Annisa Sabrina Hartoto, University of Melbourne, Australia Civil Registration and Inequality

Santoso, Article 33 Access Inequality of the Poor to Quality Education

Diandra Pratami, World Food Programme Cost of the Diet Study in Indonesia

220 Prof. Rema Hanna: Social Protection in Indonesia A social protection program is integral to the alleviation of poverty and inequality. However, it is important to understand that different programs have different impacts. It is also important to understand that various means could be used to design a program to ensure that, with limited budget and resources, poverty alleviation programs can reach beneficiaries who need it most.

•• Poverty is still a problem in Indonesia, a problem compounded by worsening inequality. How should the government address poverty and inequality issues? •• We should work with policy makers by using the current experimental techniques to provide for evidence-based policies, in particular on a social protection policy. Evaluation is necessary for various social protection programs, conditional cash transfers (Program Keluarga Harapan), rice for the poor (Raskin), etc. •• A social protection program is integral to the alleviation of poverty and inequality. However, it is important to understand that different programs have different impacts. It is also important to understand various means that could be used to design a program in order to ensure that with limited budget and resources, the poverty alleviation program would reach the beneficiaries who need it most.

Sherria Ayuandini: ‘Hidden Affluence’ and Perverse Consequences and Conditionality –Insights on Program Keluarga Harapan Recommendations related to the Program Keluarga Harapan aim to increase our understanding about the program, to use simple and unambiguous terms for the existing schemes, and to better utilise TV stations’ prime time. Better targeting could be achieved through a review of poverty classification in the integrated database. Furthermore, regular checking and updates on family status is needed. A prompt and affordable process to issue official documents is needed to eliminate access constraints and to provide easy access for those who have physical barriers. To design a more relevant program, we need to make cash transfers to fewer beneficiaries and focus on families that need them most.

•• The Reality Check Approach method is needed to assist in maintaining the accuracy of studies, not only based on data but also on the context and priorities. •• Much social assistance is not used as a productive asset. Poor people have no sustainable income and will be trapped in poverty. Beneficiary communities’ needs must be assessed to ensure that individual beneficiaries are receiving better welfare. •• The poverty unified database (UDB) should constantly be updated to obtain precise information that could be used as a strategic reference for poverty alleviation. •• Social assistance should prioritise children’s education.

221 Santoso: Access Inequality of the Poor to Quality Education Low quality education contributes to a perpetual poverty trap. In general, poor students will enrol in poor-quality schools. Innovation is needed so that poor people can access better quality education. Models from other countries, for example China, show that high- quality schools offer assistance to low-quality schools. A charter school model in several countries uses random selection of new students, rather than basing selection solely on academic rank. Alongside selection of new students, professional management and high- quality infrastructure are needed. These efforts have started showing significant results.

•• Poor students mostly enrol in low quality schools. This is due to a lack of education services and selection of new students being based on academic achievement. The gap in education is represented by scores; if students are poor, they will not obtain good scores. Consequently, poor students will go to schools with poor infrastructure and lower learning quality. This creates an endless poverty cycle. •• Inequality could be viewed by examining scores of rural and urban students, or developing and underdeveloped regions. Students from rural areas tend to have lower examination scores, as do students from underdeveloped regions. Thus, they either do not continue to higher education, or they enrol in low quality higher education institutes. •• Low education quality contributes to the poverty trap. Innovation is needed so that poor people can access better quality higher education. •• The government needs to develop a clear roadmap to equalise education quality, including education infrastructure and teacher quality. The government should identify a number of innovative breakthroughs to improve education quality. Good practice from China (Shanghai) shows that high-quality schools offer assistance to low-quality schools. •• Quota programs for poor students are positive and need further improvement, particularly in school and teacher preparation. Selection based on rank cannot be the only mechanism. Several countries are using the charter school model, where new students are selected randomly. They also implement professional management and high-quality infrastructure. Many charter schools with a large number of poor students show significant results.

Annisa Sabrina Hartoto: Civil Registration and Inequality Data shows that less than 50 percent of children in Indonesia have birth certificates. The high cost of issuing registration documents causes many people to forego registration, leaving them without access to the basic services offered by the government. Population registration in Indonesia does not support indigenous communities and people living in remote areas. The government should create a universal civil registration system to meet the basic rights of its people.

•• Poverty in remote areas is caused by the fact that people there do not have population registration documents, thus they have difficulties accessing basic services. •• Legal identity poses a threat towards ethnic identity — there are more than 400 ethnic- linguistic groups in Indonesia. The government must change its perspective, because the ID

222 card (KTP) ‘changes’ a person’s identity and deletes his/her ethnic identity. The right to legal identity should be seen as a human right. The system must recognise ethnic identity by including all ethnic and minority groups as part of legal identity. •• The population registration system in Indonesia does not support indigenous people and people in remote areas to have official recognition of their identity. The government should develop population registration innovations in order to meet the basic rights of its people.

Diandra Pratami: Cost of the Diet Study in Indonesia Recommendations from our study of food patterns are that voucher values must be adjusted for each region. A voucher to the value of IDR 110,000 could provide an extra ration of rice, egg and vegetable. If the value is augmented around 50 percent, with more varieties of foodstuffs and extra meals for breastfeeding mothers–complementary meals for infants aged 6 to 23 months–it could improve the level of nutrition and reduce stunting.

•• Approximately 62 percent of households in Indonesia can fulfil their nutrition requirements. The other 38 percent can not meet the requirement. •• Data shows that one out of three infants in Indonesia suffer from stunting. Poor people have a 50 percent higher risk of having children who suffer from stunting. The reform of the welfare rice program or Rastra (BPNT) is facing many constraints regarding its effectiveness. Distribution of rice for the poor (Raskin) is still inefficient and does not improve the nutritional requirement. •• The study on the cost of diet analysed whether each poor individual met his/her nutrition requirement. The study used Susenas (National Socio-Economic Survey) data from 2016 and a market survey at 33 markets in eight provinces. •• The study finds that it takes, at the minimum, IDR 1.2 million per month per household to meet the nutrition requirement–even higher in Papua, at around IDR 1.7 million.

Responses: •• Poverty conditions vary from region to region and require different approaches. Regions with better welfare should accommodate other regions–assimilate the weaker ones. •• Mainstreaming the success story of the local government in alleviating poverty should be more intensive, so other regional leaders will be motivated to alleviate poverty in their regions. •• Many people with disabilities do not have population registration documents. There should be a campaign to reach people with disabilities so they can have population registration documents to access basic government services. Affordable access to education for people with disabilities can be improved to reduce inequality. •• Law Number 6 of 2014 on Village should be seen as an opportunity to improve village infrastructure and basic services. How to optimise the village budget to alleviate poverty? The village budget is now focused on infrastructure development, yet its allocation should also cover the fulfilment of social needs. •• Lack of synchronised data between national and local governments, as well as between agencies, creates confusion in poverty alleviation strategies. Data instruments are still centralised. The national government does not understand poverty conditions in the regions

223 and thus introduces poverty alleviation strategies that do not fit with local conditions. The most important matter is to listen to ideas from poor people and try to find the best solution to address the problems. Then they can be conveyed to the government. •• We need a scheme that allows community participation in poverty alleviation. For example, a herbal plants project that will help provide affordable herbal medicine and food, as well as extra income, for poor people.

INNOVATE

Social protection programs and education innovation are integral to efforts to alleviate poverty and inequality. The government should introduce civil registration innovation to fulfil the basic needs of its people.

224 Graphic Recording

225 226 Innovate III Gallery

227 INNOVATE IV: Inequality and Its Context

Thursday, 10 August, 11.00-12.30 Retreat Lounge–Conversation Café

Key question: •• Determine the agenda for multi-sectoral collaboration to reduce inequality

Prof. Armida Alisyahbana, Faculty of Economy and Business, Padjajaran University, Bandung Business Model for Innovation and Digital Economy, to Create Jobs and Reduce Poverty and Inequality

Robert Endi Jaweng, Director, Regional Autonomy Watch (KPPOD) Breaking Down Inequality through Local Economic Governance

Alessandra Heinemann, Co-ordinator, OECD Development Centre Inequality and Social Protection

Armida Alisyahbana: Business Model for Innovation and Digital Economy, to Create Jobs and Reduce Poverty and Inequality A poverty alleviation program will be successful when development is carried out in synergy, from programs (government, private sector, NGO, CSR) to facilitators, while also paying attention to gender. The probability of any household escaping poverty will be larger if women participate actively in their communities.

•• Poverty alleviation can be conducted directly or indirectly. Directly, for instance, through job creation and cash transfer programs, and indirectly through developing basic infrastructure,

228 such as education. With interventions, groups of low-income people have the opportunity to escape poverty. •• Poverty alleviation can be carried out by encouraging different groups to actively participate in communities. It will open up the way towards external networks, thus giving the community an opportunity to escape poverty when its basic needs are fulfilled. •• In order to alleviate poverty, the government has introduced conditional cash transfer (PKH) and health insurance programs. But why do poverty levels remain stagnant? This situation can be explained by the fact that many programs are implemented independently and lack coordination with other programs. •• We need to recognise that inequality does exist and the government is willing to reform itself by opening access to information. •• Policies in favour of women at the village level are a smart strategy to reduce inequality. We need reform champions and solutions.

Robert Endi Jaweng: Breaking Down Inequality through Local Economic Governance KPPOD’s study examines inequality between micro/small enterprises and medium/large enterprises. Micro/small enterprises face many difficulties in accessing permits and public services as compared to medium/large enterprises. There is an asymmetry of information between business actors, and generally, certain groups that have good access to information. Therefore, information should be open and transparent.

•• The local government should recognise problems of inequality in doing business based on the size of micro/small enterprises and medium/large enterprises. Such inequality could be traced back to permit/access bureaucracy, transaction costs and local regulations. •• The local government should undertake governance reforms to reduce poverty in its region and provide access to micro/small enterprises. •• Governance reforms should cover policy design, service design and institutional design. Though it looks simple, such practice could answer the needs or demands for public services based on the real needs of the community. •• Are government programs relevant and affirmative? The smaller the enterprise, the more difficult it is to access local government. The smaller the enterprise, the bigger the burden it has to pay for local charges. Access to government policy is mostly used by large enterprises; it is not accessible by small/medium enterprises. Such conditions can trigger inequality or create enabling conditions for institutionalised inequality. •• Problems have also been identified in the asymmetry of information in the business sector. Only certain groups can obtain information. That is why information should be open and transparent. •• We need improvements and simplification of business permits, as permits are fundamental to business activities. Micro and small companies do not receive necessary support from government/or favourability from local government. Poor people and small companies often have land and business units, they only need supportive policies from local government to have business capital.

229 Alessandra Heinemann: Inequality and Social Protection There should be revision/re-design of taxation and social security systems that focus on early childhood development and improve the dynamics of the business sector, especially for young entrepreneurs and small and medium-sized enterprises (SMEs).

•• The macro perspective of OECD countries has experienced significant decline over the last 10 years. Although unemployment rates have reduced significantly in this period, the Gini ratio remains high. Inequality of income remains high due to taxation policy. This can be attributed to the ineffectiveness of cash transfers and redistribution policies. •• We need to prioritise the following policies: °° Redesign taxation and social security systems to reduce inequality and encourage inclusive development °° Early childhood development °° Improve the dynamics of the business sector, especially for young entrepreneurs and SMEs.

Responses: •• We need to have ease of doing business, access to permits and information. We need to ensure government involvement to facilitate micro and nano enterprises. We need to ensure that micro and small enterprises have access to information on government policy in order to have business sustainability. We also need to ensure that small business actors always have access to information. Intersectoral/government agency integration is needed in the implementation of programs through information technology. •• We need to have partnerships between the government, the private sector and the community. We need to strengthen local business: to improve existing business instead of appointing a new business model from the top level. We also need to establish and facilitate different types of networks. We need to improve public private partnership and to provide incentives to private actors for their cooperation with micro, small and medium enterprises.

INNOVATE

The probability of households escaping poverty will be higher and faster if women have active participation in their community. We also need to revise/re-design taxation and social security systems that focus on early childhood development and improve the dynamics of the business sector.

230 Graphic Recording

231 232 233 Innovate IV Gallery

234 INNOVATE V: Social Security: Ways to Improve

Thursday, 10 August, 13.30-15.00 Java Ballroom

Key question: •• Determine the agenda to improve social security in Indonesia.

Prof. Rema Hanna, Scientific Director, Abdul Latif Jameel Poverty Action Lab (J-PAL) Southeast Asia Social Insurance

Phillip O’Keefe, Regional Lead Economist for Social Protection and Labour Global Practice, World Bank Social Security: Ways to Improve

Nguyen Thi Lan Huong, Institute of Labour, Science and Social Affairs, Vietnam Social Protection in Vietnam (2010-2030)

Bambang Widianto, Deputy Secretary at the Vice President’s Office of People’s Welfare and Poverty, Republic of Indonesia Strategy for the Implementation of the Social Assistance Program of the National Team for the Acceleration of Poverty Reduction (TNP2K)

235 Prof. Rema Hanna: Social Insurance We need to encourage people to register for health security programs. BPJS Health Insurance membership should be a precondition to obtain administrative documents for other programs. A campaign and assistance to register will not automatically increase interest in participating. Subsidies could potentially increase participation, but on the other side could deplete government funds. We need in-depth research to determine the right strategy to increase participation in the health security program.

•• The government must be involved in providing social security as part of a systematic effort to anticipate disturbance, market failure, and to assist in market facilitation, for instance through insurance during unemployment. •• Social security is not only a challenge for developing countries. Even the United States faces challenges to encouraging people to apply for health insurance. •• Insurance subsidies could encourage more people to register. More participants means premiums will be cheaper and more profitable for those who invest. •• Research should be conducted to check whether the on-going program is suitable and could address the problem. •• Social security program designs related to health insurance are not perfect yet. Thus, social security policy implementation has the potential to bring different results from the preliminary hypothesis.

Phillip O’Keefe: Social Security: Ways to Improve Efforts to improve participation in retirement security programs require innovation in the form of simplified programs and the utilisation of communication technology combined in one attractive and comprehensive social security system. The number of distribution agents must be expanded. Technology could be used to address the problem of distance. Subsidies as a form of incentive/financial protection could balance a contributor and non-contributor approach. Good practice on this could be learned from China.

•• There are challenges to increasing participation in retirement security programs due to informalities. Global experience shows that expanding retirement programs is difficult. •• The following are approaches that Indonesia could adopt: °° Have a simple program innovation and use communication technology combined in one social security system that is attractive and comprehensive. °° To expand distribution agent coverage, technology could be used to address challenges due to distance. •• Subsidies as an incentive/financial protection could be considered as a way to balance contributor and non-contributor approaches. Good practice on this could be learned from China. •• Increase the awareness and commitment of the young generation to save for retirement.

236 Nguyen Thi Lan Houng: Social Protection in Vietnam (2010-2030) The Government of Vietnam is committed to strengthening its social protection system. Big challenges in the implementation of social security include massive unemployment, underdeveloped rural areas, a large informal sector, and sharp discrepancy of wages. Strategies to address issues related to the implementation of a social security system include: increased participation through policy reform to expand the coverage of various social security programs and to increase benefits; better targeting, especially for vulnerable and priority beneficiaries; improved quality and accessibility of services; and strengthened program monitoring and evaluation through inter-ministerial coordination and exchange of data.

•• Initiatives of the Government of Vietnam to strengthen its social security system include the enactment of a new law on manpower, job opportunities, social security and health security. The 2013 Constitution stipulated a rights-based approach for social protection. In addition, Vietnam has formulated a Social Protection Strategy for 2012-2020. •• The main principle of the implementation of social protection in Vietnam is based on three pillars: social security, social assistance, and social service. The development of a social protection system is implemented in conjunction with economic development. •• In principle, the approach selected by Vietnam is trying to combine the rights-based approach and directed efforts, so gradually it will cover everything. •• In 2020, Vietnam’s target is to achieve social security for all people; to ensure standards for minimum income, education, housing, clean water, and information that contribute to increased income; and to ensure people have secure living standards and happiness. •• Priority will be given to communities in the most difficult conditions, including poor people, ethnic minorities, people in remote mountainous areas or with difficult access, workers in rural areas and the informal sector, unemployed people, people with disabilities, children, the elderly and the sick, people affected by natural disasters, people with economic difficulties, and those vulnerable to social risks. Government efforts to realise social protection include education, manpower, sanitation, accessibility for those who live in remote and inaccessible areas, and insurance for those who are unemployed or terminated from their work. •• The government plays the main role in social policy development and implementation. In addition, the government mobilises community participation and international cooperation. •• The challenge to implement social protection remains high, due to massive unemployment, underdeveloped rural areas, a very large informal sector, and sharp increases of wage discrepancies. •• A financing strategy includes efforts to increase government income through economic stability, GNP growth, taxation, expansion of social protection, banking structure reform, and fiscal space. •• A social security initiative for the informal sector will never come from the informal sector itself. The system design should minimise target ‘contributions’, as the informal sector tends to demand different benefits based on spending.

Bambang Widianto: Strategy for the Implementation of a Social Assistance Program of the National Team for the Acceleration of Poverty Reduction (TNP2K) To ensure accurate implementation of the social assistance program, TNP2K runs a number of strategies as a result of program evaluation. One of the main strategies is to assess the beneficiaries to ensure that assistance is delivered to the right people. Targeting mechanisms should be improved to increase program effectiveness. The right evaluation could assist in formulating the right solution to ensure program effectiveness.

237 •• Economic growth at the highest decile keeps developing. But it also contributes to inequality. The government has limited capacity to address this. The challenge lies in ‘selecting’ a strategy for the most appropriate beneficiaries. •• In a social assistance program, the government has limited funds and therefore must be careful in deciding appropriate beneficiaries. Thus, the targeting system must be designed in a comprehensive manner, for instance by including all the targeting dimensions below: 1. Means testing 2. Geographical targeting 3. Community-based targeting 4. Vulnerable category 5. Self-targeting •• To achieve precise targeting, TNP2K tries different methods. This approach is carried out to determine the number of people above the poverty line that must be reached as a means to increase the accuracy of assistance delivery. •• The government uses data and addresses 40 percent of the poorest of the poor. DPR gives its approval for the lowest 25 percent (close to the poverty line) by including the risk of inclusion error (those who are entitled but have not been included or vice versa). This will result in 25 percent of the poorest receiving a Smart Indonesia Card (KIP) and Healthy Indonesia Card (KIS), and 35 percent receiving Social Safety Net assistance (JKN). •• Currently, unified data in Indonesia covers 40 percent of the poorest people. •• The reform of distribution mechanisms could be observed through the Poor Student Assistance Program (BSM). Initially, school committees were authorised to determine BSM beneficiaries, but this practice changed. Determination of BSM beneficiaries is now based on household data. This method requires new dissemination and data updates. Ever since this new method was implemented, there has been a rise in the number of BSM beneficiaries, from 2 percent to 25.5 percent. •• Other issues related to education include the number of teachers. We need to consider incentive innovation for teachers. Half of the current education budget is allocated for teacher salaries (budget allocation of approximately US$ 15.15 billion). •• One innovation could be to regulate incentives/benefits, and only give them based on evidence of attendance. We need to have an effective method for incentive disbursement that is linked to the level of performance. For example, by enacting local regulations, stating that if a teacher did not go to school to teach, his/her salary would be reduced. Performance appraisals should be based on attendance and teaching methods. Alternatively, teacher performance could be assessed by students. This innovation has proven successful, as seen by improvements in student achievements based on data gathered from 31 pilot villages in three districts in Indonesia.

INNOVATE Increased participation in social security programs requires innovation, simpler programs and support by using communication technology to integrate the existing system to be more comprehensive.

238 Innovate V Gallery

239 INNOVATE VI: Inclusive Economic Growth: How Should Indonesia Adapt to It?

Thursday, 10 August, 13.30-15.00 Padang Room–World Cafe

Key question: •• Determine the agenda for inclusive economic growth.

Steven Tabor, Economist Inclusive Economic Growth: How Should Indonesia Adapt to It?

Riatu Mariatul Qibthiyyah, Head of Institute of Economy and Social Research/ LPEM, University of Indonesia Inclusive Economic Growth in Decentralized Context

Adoracion M Navarro, Undersecretary for Regional Development NEDA The Philippines Inclusive Growth Challenge: Sharing Our Story with Indonesia

Jesus Felipe, Economic and Research Department, Asian Development Bank (ADB) Macroeconomic Aspects of Inclusive Growth in Indonesia

240 Steven Tabor: Inclusive Economic Growth: How Should Indonesia Adapt to It? Addressing inequality requires policy that focuses on increasing income diversification, governance, productivity and job opportunities, supported by a poverty alleviation policy, involvement of other development stakeholders, and improvements in policy implementation.

•• In Indonesia today, economic growth of the rich is twice as fast as the working class. If we keep allowing such conditions, inequality will grow–the rich will keep growing while the poor cannot join the growth. •• There is no equality in the growth of income in the community due to massive corruption, collusion and nepotism (KKN); the service sector has low productivity despite its industrial transformation; tax distribution in not optimum; and traditional values keep women out of the workforce. •• Equality should be integrated with policies that focus on: °° Diversification of products and sources of income. °° Good governance. °° Increased productivity. °° Creation of formal job opportunities. •• To address these issues, many innovations are required, including: °° Inclusive policy (alleviate poverty to reduce inequality). °° All groups should participate in the process of inclusive growth. °° Macro, structural and sectoral policies should contribute to equality. °° Determine target priorities at each level–one of them is through various quick wins.

Ratu Marital Qibthiyyah: Inclusive Economic Growth in a Decentralised Context Distributive policy covers the role of provincial and local governments. A negative impact of the central government’s transfer scheme could cause lack of effectiveness of programs. Limited autonomy could cause lack of fiscal correspondence at the local level in providing public services.

•• Growth has the potential to reduce poverty and inequality, but it will not happen automatically. •• Decentralisation policy might be good, but we cannot use the same approach for all regions, as each region has different characteristics. For example, DKI Jakarta in 2015 had high income per capita with a low percentage of poor people. Papua had low income per capita with a high poverty rate. New provinces tend to have high poverty rates. Therefore, it is important for policy makers to consider local context. •• Attention should be given to contexts such as population, the economy and the global context. We can learn from other countries with similar conditions to Indonesia–not only from success stories but also from failures. •• One of the solutions to reducing inequality is through multi-level financing, but incomes from the central government are still dominant.

241 Adoracion M Navarro: The Philippines Inclusive Growth Challenge: Sharing Our Story with Indonesia The pursuit of inclusive growth is a common challenge for both Indonesia and the Philippines. However, Indonesia shows better recent progress.

•• The Philippines has high poverty rates, though its GNP keeps increasing. •• Poor infrastructure, natural disasters, corruption, collusion and nepotism, and problems within the government, as well as limited investment in human resource development, have increased poverty and inequality in the Philippines. •• The Philippines prefers to implement policies that increase inclusive financing, improve good governance and increase resilience to natural disasters, as well as policies in education, healthcare services, and human resource capacity development.

Jesus Felipe: Macroeconomic Aspects of Inclusive Growth in Indonesia To address poverty and inequality, Indonesia could use an approach towards marginal groups (small action) and big action by creating and implementing policies to reach full employment through agricultural modernisation; investment in infrastructure that creates job opportunities and provides basic services; industrialisation to improve productivity; adoption of structural changes through diversification and distribution of resources, development of new sectors and public-private partnerships; and better monetary and fiscal policies that support growth.

•• In development, real market economies are not distributed equally. •• Indonesia should apply land reform. •• Indonesia needs to increase its potential growth rate by increasing productivity growth. •• As potential increases, then increase actual growth through, e.g. fiscal policy. •• Indonesia could learn from Japan and Korea to ensure equality.

Responses: •• Poverty and inequality reduction should be a bottom-up approach, instead of top-down. If you pressure the elite, they might just go abroad. You need to encourage the working class through empowerment and by boosting entrepreneurship. Once the lower level has been empowered, you need to guarantee their connectivity to infrastructure and technology. Macroeconomic indicators cannot be based on material aspects only, but also immaterial aspects. For instance, freedom from fear. In the past, people were not afraid to be poor, but now people are afraid of not receiving welfare. •• Land reform is difficult because the majority of land is under the possession of private actors. One of the alternatives is through a land bank. We need to increase agricultural sector productivity through land productivity. •• Industrial and service sectors have to be developed in rural areas. One way is through strengthening connections at the rural level.

242 •• We need to develop ‘socialpreneurship’ to increase care of the surrounding environment. Economic growth must be accompanied by the development of well-planned industrial zones and technology-savvy human resources. •• Job creation policy could be implemented through agricultural modernisation, infrastructure investment, industrialisation facilitation, increased resource diversification and distribution, development of new sectors, increased public-private partnerships and improved monetary and fiscal policies.

INNOVATE

Addressing inequality requires policies that focus on increasing income diversification, governance, productivity and job opportunities, supported by poverty alleviation policies, involvement of other development stakeholders, and improved policy implementation.

243 Graphic Recording

244 245 246 Innovate VI Gallery

247

IDEAS AND INNOVATION MARKETPLACE Ideas and Innovation Marketplace

Mini Stage A

Cici Wanita, Teaching and Learning Officer, INOVASI Program Co-Designing Local Solutions for a Stronger Education Sector in Indonesia

Sunaji Zamroni, Director, Institute for Research and Empowerment (IRE) Yogyakarta Reviving Democracy and Local Economy

Acep Muslim, Researcher from AKATIGA Bandung Economic Mediation to Reduce Poverty and Inequality

I Wayan Gede Eka Sudiartha, Director of Nyambu Ecotourism Village (DWE) Nyambu Ecotourism

Jeff Kristianto, Business and Export Development Organisation (BEDO) Bali Export Development Organisation: Together we can Make a Difference

Kania Mezariani, Researcher from ELSAM Business and Human Rights

250 Cici Wanita: Co-Designing Local Solutions for a Stronger Education Sector in Indonesia INOVASI aims to look for solutions to more innovative classroom sessions. It starts from the fact that school participation is increasing, but the quality of learning remains the same. INOVASI uses a problem-driven iterative adaptation (PDIA) approach. The PDIA approach emphasises the process of empowering local stakeholders so they will be equipped with the skills, data and information needed to adopt a more effective approach to increase learning quality. It creates different solutions for different areas that are adjusted with each context and challenge.

•• The PDIA approach focuses on efforts to address problems of performance and challenges faced by local stakeholders, to encourage experiments and innovation, to ensure that such experiments can give feedback for learning processes, as well as to involve relevant stakeholders in ensuring that the solution offered is applicable, relevant and supported. •• PDIA implementation could be done through collaboration with local government and local stakeholders, whereas the process itself could improve local capacity. Together with the local government, INOVASI studies problems and challenges faced by local government. Collaboratively, all stakeholders and relevant local government analyse the local context to address the problem. As a result, each region will have different pilot activities based on its particular context. •• Through such a process, stakeholders will be equipped with data and information on effective approaches to improve learning quality. •• Currently, the INOVASI program is trying to improve the learning process. Together with teachers, the program identifies special needs in learning.

Sunaji Zamroni: Reviving Democracy and Local Economy The Institute for Research and Empowerment (IRE) actively encourages the institutionalisation of village-owned enterprises (BUMDes) as a form for strengthening democracy in Indonesia, with a bottom-up approach. It could answer many problems in the village through deliberative democracy.

•• Instead of bringing welfare to the people, today’s democracy is a ‘hijacked democracy’. •• Law Number 6 of 2014 on Villages is a chance for the return of democracy and the development of the local economy. We must be part of the actors who encourage the revival of democracy and the local economy. •• The Law on Villages gives us an opportunity to institutionalise and develop the local economy, not just implement a foreign economic system, but really implement principles and values of local democracy. •• As stipulated in the Law on Villages, there should be at least two village deliberations annually that put primacy on consensus (deliberative democracy) to discuss village issues. •• By referring to the Law on Villages, IRE recommends efforts to institutionalise village-owned enterprises (BUMDes) that will not only seek profit, but also strengthen local democratisation

251 processes through bottom-up practices when looking for solutions to community problems. •• We need to place the village-owned enterprise as a unique social institution and not simply as a business unit. If it does not uphold the principle as a means to strengthen the local economy, village-owned enterprises tend to be developed for profit-seeking purposes only. There is no problem with a saving-loan program, but we need to understand whether the village has social rather than economic problems. Local democracy that is using the principle of deliberative democracy will map the village’s core social-economic problems. Therefore, when village-owned enterprises are being developed, their purpose is to transform the old system to economic activity that benefits all villagers. •• One of the challenges faced by IRE in facilitating village-owned enterprises is the stakeholders’ lack of consistency. They tend to rush to see the result. Village-owned enterprises are treated by government as a mandatory requirement that must be developed as soon as possible. Village elites do not want to invite people to be involved, so the community does not understand that it is entitled to participate. •• Village-owned enterprises could respond to the elite through political education for village people. State and non-state actors must change their ways by directly going to the field and educating the community.

Acep Muslim: Economic Mediation to Reduce Poverty and Inequality Economic mediation is not just to connect small producers to bigger markets. Mediation here is not an institution, but governance from all relevant parties. The process to connect those parties should be complemented by increasing the role and capacity of relevant parties, so they could adjust production and other prerequisites to increase the selling power of a particular local product.

•• How could we increase the income of the poor and micro and small business owners? What government programs can encourage and assist micro and small business development in Indonesia? •• Non-governmental mediators could encourage access to a fair market with a fair price. The value chain is neither monopolised nor controlled. This practice requires access to land, zoning, and affordable, fair land prices. We need to have production, information and market systems that can create decent working opportunities for the young and the poor. •• Good practices in Flores have helped hundreds of farmers who own coffee plantations. When global business players need coffee beans, they inform the farmers about the type of coffee beans they need. At the same time, they interact with the government to explore and discuss transition and capacity building programs. This practice has successfully connected local farmers with the outside market. •• Mediation here is not only about having an institution, but more a governance process that involves roles from different parties. •• Collaboration between civil society and the government is needed to facilitate smallholders in acquiring access to land without threatening big farmers.

252 •• It is not that the youth does not want to farm, but they think agriculture is no longer profitable. One solution is to make the business sector at the village level profitable and attractive for youth.

I Wayan Gede Eka Sudiartha: Nyambu Ecotourism Experiences from the Nyambu Ecotourism Village in Bali include program development and implementation that aim to raise community awareness and willingness to preserve their cultural heritage and the environment. The young generation has started to return to their local culture. The approach in this program emphasises joint management.

•• In the village of Nyambu, Tabanan District, Bali, land use has shifted from agriculture to tourism. As a consequence, the amount of plastic trash is mounting. The young generation started to abandon their cultural heritage. •• The approach used to manage natural resources is known as ‘Bali Dwe’, which means something sacred that is owned or managed together. This approach is implemented by preparing a village map, then formulating village strategic plans for the next 12 years. The village-owned enterprise that has been established since 1986 manages four business activities, including ecotourism. •• The packages offered to tourists are a paddy field trail package (paddy field and traditional irrigation) and traditional rituals related to agriculture, from planting to harvesting. A cultural trail package involves a trip to historical sites from ancient Bali, while a bicycle trail package is a trip around the village ending with sunset at Tanah Lot. In addition, tourists can book homestays in local residents’ houses, instead of staying at hotels. This initiative was launched on 29 April 2016 by the district head. •• The people feel the benefit, for example awareness of preserving the environment and traditional culture is rising. Young people have returned to their cultural heritage. The community earns extra income, as eco-tourism can be done without leaving their primary jobs. •• The people in Bali have Subak, which is an organisation of landowner farmers, and other community institutions. These institutions are working together in synergy. Impacts are discussed with the community and dividend is given back to the community. A farmer who is working in the field and has to entertain guests will receive a small incentive.

253 Jeff Kristianto: Bali Export Development Organisation (BEDO): Together we Can Make a Difference BEDO is a community of entrepreneurs established after ‘the second Bali bombing’ tragedy. This community is based on the principle of ‘from member to member’ and its main focus is on capacity building. BEDO’s vision is to realise sustainable economic growth for SMEs and entrepreneurs in Bali (and more recently broadly in Indonesia) while being socially and environmentally responsible. Its mission is to empower SMEs to reach international quality standard through training, information and capacity building.

•• BEDO business coaches are trained to provide training and workshops in design, marketing, exhibitions and display, product development, export and company development. •• The method and approach used is sustaining competitive and responsible enterprises (SCORE), which has been implemented in nine countries. •• One of the changes seen by businesses that join BEDO is visible in better-organised storage areas and more punctual delivery. The coaches are also entrepreneurs themselves.

Kania Mezariani: Business and Human Rights From 17,768 complaints on human rights violations that have been received to date by the National Human Rights Commission (KomnasHAM), around 3,500 are complaints against corporations and state-owned enterprises. Based on this, ELSAM believes in the importance of mainstreaming human rights in business practices.

•• Human rights violations keep occurring. Data shows that there are 17,768 complaints filed with KomnasHAM. Of those, around 3,500 are against corporations and state-owned enterprises, and 5,763 are complaints against the police. •• At the international level, there is the United Nations Guiding Principles on Business and Human Rights (UNGP), a global standard to prevent and address adverse human rights impacts caused by business activities. •• According to the UNGP there are three pillars: protection (government obligation), respect (business responsibility), and remedy (joint task of the state and the corporation). •• For human rights violations that happened after a corporation obtained its business permit, the government ought to consider rescinding the permit. The community should play a role as a supervisor to ensure that the government is doing what it is supposed to do. Once an incident has occurred, the government should ensure that remedies are available.

254 Mini Stage B

Betta Anagram Setiani, Researcher from the National Secretary of FITRA, Jakarta Budget Data Transparency

Karlina Octaviany, Indonesia Voice of Woman Empowerment 2.0: The Social Media Role for Rural Development in Indonesia

Torry Kuswardono, Director of PIKUL Foundation, NTT Clan-based Water Conservation in Village Spatial Planning

Boedi Reza, Researcher from the Local Autonomy Monitoring Committee (KPPOD), Jakarta Local Economic Governance to Address Inequality

Jeffri Yosep Simanjorang, Selingkar Oelbinose: The Forgotten Brothers

Yohana Ratrin Hestyanti, Atma Jaya Catholic University Towards a Disaster Resilient Jakarta: Lessons Learned from Jatinegara and Rawa Buaya Municipalities

Betta Anugrah Setiani: Budget Data Transparency The budget internet portal info-anggaran.com provides information and analysis on budgets of central and local governments that are updated on a quarterly basis.

•• The budget portal info-anggaran.com provides information and analysis on budgets of central and local governments that are updated on a quarterly basis. •• Village and regional information system (including control of village budget disbursement, and the role and function of the Local Development Bank (BPD) at the village level). •• Everybody has the right to valid information as a way to strengthen public participation to optimise public control of development.

Karlina Octaviany: Empowerment 2.0: The Social Media Role for Rural Development in Indonesia Social media can be used to reduce inequality. In the ‘Village Develops Movement’, midwives use social media in remote villages for consultations to overcome the problem of long distances, or the need for immediate action while waiting for medical assistance to arrive.

•• What is the role of social media in reducing inequality? Through digital training and learning, the most basic lessons such as the difference between browsers, Facebook, and WhatsApp. •• Information distribution on websites for people with limited visibility by using screen readers.

255 •• Media literacy for primary school students to teach them about how computer games could damage their physical and mental health.

Torry Kuswardono: Clan-based Water Conservation in Village Spatial Planning PIKUL supports clan-based water conservation and local wisdom in East Nusa Tenggara.

•• Issues related to water supply in East Nusa Tenggara include declining water quality, as nobody addresses the issue, and water sources that are still controlled by clans and not the community. •• Water conservation efforts have just begun for several water resources in Kupang and need to be developed for water resources in other areas. •• The process done by Pikul is still limited to identification. Next, we are planning to encourage clan recognition in village spatial planning, which eventually will guarantee the sustainability of water resources quality.

Budi Reza: Local Economic Governance to Address Inequality KPPOD is an independent NGO that monitors the application of local autonomy. It was established based on the application of local autonomy since the enactment of Law Number 22/1999 on Local Government and Law Number 25/1999 on Fiscal Balance between central and local governments. Local autonomy, including local economic governance, needs to be scrutinised continuously to realise fairness and prosperity for the people, based on their potential and diversity, without ignoring the principle of national unity.

•• KPPOD has created an online library of 30,000 local regulations that have been enacted. One of the resources is the Legal Data and Information Network. KPPOD uploads local regulations that have not been included in the network once they have been enacted and deemed ‘not problematic’. •• KPPOD will follow up problematic regulations with the central government (relevant ministries) and the local government that enacted the regulations. •• KPPOD focuses more on local regulations related to business, for example regulations related to levies and loans. •• A study conducted by KPPOD shows that regulation governance in many areas in eastern Indonesia has been improving. •• Local autonomy should accelerate the process to reduce inequality. However, leadership factors play a significant role in implementing programs and policies.

256 Jeffri Yosep Simanjorang: Oelbinose: The Forgotten Brothers This presentation describes community life in East Nusa Tenggara (NTT) that has not been reached by basic facility development by either the central or local government of Indonesia.

•• The Selingkar Organisation tries to capture conditions in the peripheral or most remote parts of Indonesia. •• One of the videos that Selingkar made and presented is about Oelbinose in East Nusa Tenggara. •• It portrays the state of school buildings and healthcare facilities. Students are very eager to study but they have not been ‘served’ well, with the absence of teachers. There are seldom healthcare workers and equipment.

Yohana Ratrin Hestyanti: Towards Disaster Resilient Jakarta: Lessons Learned from Jatinegara and Rawa Buaya Municipalities Jakarta is prone to disasters, for example flooding. However, together with 20 other regions in Indonesia, Jakarta has joined the global campaign to Create a Resilient City— My City is Ready When Facing Disaster! This campaign calls for 10 fundamental steps applicable to create a resilient city. Our study draws lessons learned from Bukit Duri and Rawa Buaya municipalities in Jakarta when facing flooding.

•• According to the guidelines for local government to create a resilient city in the face of disaster, issued by the National Disaster Management Agency (BNPB) in cooperation with a UN agency, there are 10 fundamental steps for a city to be more resilient: 1. Organisation and coordination 2. Decision on the budget 3. Formulate risk assessment 4. Invest in infrastructure important to mitigate disaster risks 5. Assess the safety of education and healthcare facilities 6. Enforce building codes and urban spatial planning principles that are realistic and risk- based 7. Ensure the availability of disaster risk mitigation training and education programs 8. Protect the ecosystem and natural buffers, and adapt to climate change 9. Establish an early warning system and emergency management capacity 10. Ensure that the needs and participation of affected populations become the centre of all efforts •• Research in Rawa Buaya and Bukit Duri municipalities shows that there are five prominent steps out of the 10 fundamental steps above: Steps 1, 4, 7, 9 and 10. •• Recommendation based on our research: an integrated mechanism is needed that involves all stakeholders and that facilitates cooperation between the community and business sectors.

257 Mini Stage C

Susli Lie, Head of Investments, YCAB Ventures Yayasan Cinta Anak Bangsa (YCAB)

Helga J. N. Ndun, Nusa Cendana University Latrine Access in Indonesia: A Story from Dodaek Village

Iqbal Damanik, Researcher from Article 33 Jakarta Addressing Inequality in the Local Government

Raditia Wahyu Supriyanto, Universitas Indonesia Development of Integrated Service and Referral System in the Fulfilment of Basic Needs of the Poor

Siti Fatimah, Researcher from Bandung Institute of Governance Studies (BIGS), Bandung Data Revolution: Strengthening Data to carry out SDG Monitoring Based on Community Participation

Yohanes Rahail, Institut Pengembangan dan Pemberdayaan Masyarakat (IPPM) Integrated Village Schools Based on Local Wisdom

Susli Lie: Yayasan Cinta Anak Bangsa (YCAB) YCAB provides youth development in healthy life style, education and economic empowerment, including access to financing through micro-loans in Indonesia and six other countries, (Myanmar, Afghanistan, Pakistan, Mongolia, Laos and Uganda).

•• YCAB works as a social entrepreneur with other corporations and assists them in re- investing their profit for youth development. •• YCAB manages micro-credit associations for mothers of the targeted youth. •• Its long-term impact on household welfare could be linked to goods and services (measurable metrics). •• More than 42,000 students and indirect beneficiaries have been sponsored.

Helga J.N. Ndun: Latrine Access in Indonesia: A Story from Dodaek Village Latrine access in Dodaek village, East Nusa Tenggara (NTT) has increased from 40 percent to 100 percent in the last five to six years. Latrine communal saving and gathering is successful because all the villagers care about it.

•• This can be achieved because the villagers are saving communally to build latrines. It started by gathering village people who decided the amount of saving for each participant. The money

258 collected from the gathering was used to purchase latrines and cement to build toilets in houses that did not have one. •• This program is successful because all the villagers care about it.

Iqbal Damanik: Addressing Inequality in the Local Government Local government expenditure on education is considered off target. Quite often, many local governments have similar annual work plans from one year to the next. We need to have equal distribution of facilities to reduce inequality. Article 33 on cooperation with a local government signed a memorandum of understanding (MoU) to improve public expenditure in education. Before we signed the MoU, the local budget (APBD), especially for the education sector, was first analysed in detail by using a simple application (Excel- based) to ensure that the local government really used the funds more effectively.

•• We need to have equal distribution of facilities in order to reduce inequality. •• To reduce inequality, we need to know existing education facilities and expenditure. •• Article 33 developed a simple application using Excel spreadsheets so the local government could better spend its education budget.

Raditia Wahyu Supriyanto: Development of Integrated Service and Referral System in the Fulfilment of Basic Needs of the Poor The Integrated Service and Referral System supports the basic needs of the poor by using existing systems: the Healthy Indonesia Card and the Smart Indonesia Card. Village facilitators are used to respond to local needs.

•• Integrated Service and Referral System (SLRT) is carried out by not creating a new application. Instead, it optimises the existing systems, the Healthy Indonesia Card and Smart Indonesia Card, so the people can immediately enjoy the result. •• SLRT is a systematic effort to provide an integrated unit from several Local Government Agencies (SKPD), and enables the community to know where to file their complains and obtain solutions for their problems. •• One of the ways, for instance, is by contacting the village facilitator. The objective is to be more responsive and to respond appropriately according to their needs. •• At present, SLRT has been on-going in several regions, including Sragen, Sleman, Bantaeng, West Bandung and Bandung.

259 Siti Fatimah: Data Revolution: Strengthening Data to carry out SDG Monitoring based on Community Participation Timely, updated and actual data can be used for policy making and to run a more efficient process by eliminating middlemen. Pilot activities that have been implemented utilise village facilitators to collect data by using existing gadgets, such as mobile phones. In future, the community could participate in data collection, reporting and validation processes.

•• The data revolution aimed to fulfil an efficient working principle, by eliminating any brokers. •• BIGS studies how real-time data can be used for effective and efficient policy making. A small pilot project has been carried out in several villages in Bojonegoro, Kendal and Pekalongan. •• A data revolution project is implemented through training a number of village facilitators on data collection through mobile phone application. For example, taking photos of houses in their village, then uploading them together with demographic data. •• In future, it is expected that the community could update its own data. •• Data collected by facilitators and updated by the community will be complemented with information on who submitted the last update for data validation.

Yohanes Rahail: Integrated Village Schools Based on Local Wisdom Many children in Papua were initially not interested in going to school. However, village schools have made children confident and believe that their future lies at school. Encouraging children to study at a village school required a comprehensive approach to all stakeholders that reached traditional leaders, religious leaders, women leaders and youth leaders who were willing to motivate children to go to the village school. After the village school program ran for some time, many parents realised their children considered school important.

•• A comprehensive approach was adopted by our village schools. At first, the school invited traditional leaders, religious leaders, women leaders and youth leaders in each village for discussion, so they would be willing to motivate the children to study at village schools. •• The idea of village schools was first received with apprehension because there were no official teachers or buildings. Some even thought that the school was ill-intentioned. •• After the program ran for a time, parents started to realise that their children considered school an important matter. •• At the village school, children are taught about Papuan nature and local language, and the school uses exhibition tools made of materials found in their surroundings so the children will enjoy studying. •• Villages where the schools are located receive various awards, two of which are on the MDGs.

260 Mini Stage D

Hastuti, Researcher, SMERU Research Institute Solutions to Realise Development that is Inclusive for People with Disabilities

Fariz Panghegar, Researcher from Cakra Wikara Indonesia (CWI), Jakarta Survey by the Community: Participatory Planning to Address Inequality

Noory Okthariza, Researcher, Centre for Strategic and International Studies (CSIS), Jakarta The Dynamics of Local Politics and Inequality

I Nengah Latra, PUSPADI, Bali Realising Independence for People with Disabilities

Endahing Noor Suryanti, CEO Pelangi Nusantara Foundation (Pelanusa) Act Together with Pelanusa for a Better Life

Gary Seah, Mentor Foundation Teaching the Basics of Saving to Make Incomes Last Longer

Hastuti: Solutions to Realise Development that is Inclusive for People with Disabilities There are many challenges to realising inclusive development, particularly related to people with disabilities. One challenge is the lack of single data that could serve as a reference in policy making or in formulating the correct program intervention. There are problems with access, funding support, and legal frameworks that do not favour inclusive development. Many stakeholders lack understanding when formulating and implementing appropriate and correct programs to realise inclusive development.

•• Challenges to inclusive development include people with disabilities not being empowered, limited access, minimum budget allocation for people with disabilities, data is varied and uses different concepts, and ineffective legislation formulation processes. •• In order to respond to these challenges, SMERU Research Institute has studied a number of solutions to empower people with disabilities so they are aware of their rights; to ensure access for people with disabilities to various public services, including efforts to build disability- friendly infrastructure; to introduce disability concepts to the public; to formulate legislation and implement regulations for the 2016 Law on Persons with Disability; and to synchronise sectoral laws related to the Law on Disability. •• Efforts to realise inclusive development for people with disabilities require a strong institutions to prevent intervention. Single data from a reliable source, as well as public spaces for people with disabilities to participate are crucial and require collaboration between multiple parties.

261 Fariz Panghegar: Survey by the Community: Participatory Planning to Address Inequality CWI carried out a survey with villagers as a form of community engagement in the process of village development, from the stage of planning and budgeting to monitoring. This study responded to the real needs of villagers on the ground. Villagers will acquire ownership of development due to their joint participation with the government apparatus in various stages of development.

•• Based on data of September 2016, 62 percent of poor Indonesian people live in the countryside. However, many programs do not correspond to the needs of villagers. For example, equipment from the central government to a village was unused and neglected, due to development planning that implemented a top-down approach without engaging villagers. •• CWI has piloted an innovative idea, carrying out participative village development by having villagers themselves conduct a survey on their needs. It has been done in three villages, Noelbaki in Kupang, Belabori in Gowa, and Sidomulyo in Batu. The respondents were selected according to the methodology. •• The villagers’ survey was successfully done with the support of two principles, the education and organisation of the villagers. Villagers have for too long remained a passive audience. Alternative data that was collected and processed by the villagers was quantified and used to draft village development plans, budget allocations and monitoring tools. •• The villagers need to ensure the importance of monitoring so that policies will correspond to their needs. Data may raise villagers’ awareness of the real conditions in their neighbourhood. •• The success story of this initiative comes from Kupang. At the beginning, only a few men were involved–the participants were mostly women. But at the end the survey succeeded in reaching a wider community, including public figures, religious figures, and village government apparatus. Problems involving integrated community health posts (posyandu) which were usually ignored, began to be noticed and heard. •• The role of CWI is delivering knowledge and raising villagers’ awareness so that they can carry on by themselves. The participatory survey piloted by CWI could be financed by the village itself, using village funds.

Noory Okthariza: The Dynamics of Local Politics and Inequality If local authorities are not distributed equally, the inequality index will increase.

•• The decline of the Gini ratio in Indonesia is the result of decreasing prices in global markets. The highest inequality occurred because large cities progress while most remote districts, especially those in the eastern part of Indonesia, develop slowly. •• It is thought that there is unequal separation of authority in the regions, worsened by political divisions between the executive and legislative at the regional level. •• Another challenge arising from the political system is that, when the head of a district is elected, his power cannot actually last for five years, as people are usually ‘more loyal’ to their patron. This is apparent in most political systems.

262 I Nengah Latra: Realising Independence for People with Disabilities The focus of PUSPADI’s activities in Bali is to meet the needs of people with a disability, especially those living in villages. The support provided is in the form of education, institutionalisation for empowerment, and equipment, such as wheelchairs.

•• The activities carried out by PUSPADI include visits to villages and directly interacting with villagers to identify their needs. The support delivered includes equipment, such as wheelchairs. •• Assembling wheelchairs was done by people with disabilities. The equipment provided corresponds to their needs. •• In addition, PUSPADI provided education in public schools, as well as training for adults with disabilities. •• Currently there are 4,500 people receiving support, including prosthetic legs, wheelchairs and education. •• Client numbers grow every year. There were 662 new clients, as cooperation with villagers is very helpful. PUSPADI built houses according to the needs of people with disabilities, and volunteers are recruited from all over the world. •• 36 percent of the beneficiaries of these activities are women. As long as the supporting equipment is still needed, PUSPADI will continue to help. The annual budget is around Rp5 billion, with 85 percent of the funds derived from international donors. The local government was engaged in discussions and has drafted a Local Regulation on disability. It is not directly affecting institutions.

Endahing Noor Suryanti: Act Together with Pelanusa for a Better Life Pelanusa works to empower marginalised women, such as former overseas female workers, teenage married couples, and girls of reproductive age who have dropped out of school, in order to increase family income by promoting self-reliance and social businesses. Their products have penetrated Japanese markets and will continue to work towards penetrating global markets in future. The social impact of this activity, apart from increasing incomes, is the change of mindset and utilisation of second-hand goods/junk as saleable and value-added products.

•• The members of Pelanusa are 90 percent women. The vision of the institution is to establish an independent social business. Products have succeeded in penetrating the Japanese market. The mission of the institution is to penetrate America. Pelanusa is supported by several national export agencies. •• Members are former overseas female workers and teenage married couples–where there are no local institutions that want to take them as students–and groups of women who have dropped out of school. •• The visible social impact includes a change of mindset, increasing family income, and even a branding campaign, ‘from junk to income’.

263 Gary Seah: Teaching the Basics of Saving to Make Incomes Last Longer The Mentor Foundation focuses on teaching students to save money. Saving is done across different accounts and people allocate 10 percent to 20 percent of their income.

•• The Mentor Foundation teaches people how to save, thus their income will last longer. Various activities were conducted, including seminars, education and coaching, and personal financial management. •• Constant challenges faced by the local community include prioritising spending due to limited income and lack of discipline. •• One program is the ‘e-learning’ platform, a MentorHub that is accessible by other NGOs and communities. •• The focus of 2016 was to teach high school students to save money. Saving is done across different accounts and people allocate 10 percent to 20 percent of their income.

Mini Stage E

Teresa Birks, Director, Education and Society, British Council Indonesia British Council’s Programs to Support Social Enterprises in Indonesia

Aria Widyanto, Vice President, Amartha Fintek Re-inventing Micro-payments: ‘Financial Technology’ in ‘Microfinance’ as an Inclusive Financial Strategy

Poppy Savitri, Director of Education, Creative Economy Agency (BeKraf) IKKON Program

Lisa Peterskovsky, GIZ-ISED Program Inclusive Sustainable Economic Development

Ihsan Maulana, Researcher, Sajogyo Institute The Portrait of Rural Areas and Agrarian Resources in Indonesia

Siti Maryam Rodja, Founder, Baraka Nusantara Baraka Nusantara

Andy Nurhanjayani, DPRD member Parepare and MAMPU Program Participatory Parliament Recess

Aldi Mardikanto, Ministry of National Development Planning/National Development Planning Agency (Bappenas) Boosting the Nation’s Productivity through Sanitation Development

264 Nurul Saadah, Director, Disabled Women and Children’s Advocacy Centre (SAPDA) and AIPJ2 Program Disability-Friendly Public Services: Building Inclusive City Initiatives

Rais Nur Latifah, Institut Teknologi Bandung (ITB) Village School Household Industry Centre, ‘Jagorawi’ (Authentic Javanese Jamu Gendong) as the Mobiliser of ‘Women Entrepreneurs’ in Wonorejo Village, Karanganyar

Teresa Birks: British Council’s Programs to Support Social Enterprises in Indonesia Social enterprise is a concept where part of a business addresses social and environmental issues. Social enterprises generate income just like other businesses, but re-invest some of their profit in their social mission. Social enterprises have the potential tocreate employment, reduce inequality, promote behavioural change to take responsibility for business, and integrate entrepreneurship skills of the private sector with public service values.

•• The British Council in Jakarta has created a program of skills for social entrepreneurs (SSE). There are many people who would like to do business, but are not capable of managing finances. The British Council helps to formulate their business model. •• The beneficiaries of this SSE program include practitioners of social enterprises, NGOs, community leaders, construction workers, and young people. The content of the program covers skills training, professional coaching, access to experts from England, global peer networks, and funding opportunities that enable social entrepreneurs to build successful social enterprises. •• In several years, social enterprises in Indonesia are expected to conduct diversification of business resources, not only relying on banks but also on crowd funding or other resources.

Aria Widyanto: Re-inventing Micro-payments: ‘Financial Technology’ in ‘Microfinance’ as an Inclusive Financial Strategy Amartha Fintech started as a micro-finance institution with the objective of connecting entrepreneurs in rural areas who have limited access to capital support. Amartha has modernised micro-finance by building peer-to-peer lending (P2P) platforms equipped with a credit scoring system to analyse the feasibility of potential lenders. Through P2P, Amartha connects micro-entrepreneurs in the informal economy sector directly with investors. Amartha Fintech believes that everyone should have equal opportunities to start and develop businesses, including those with limited assets or who find it difficult to gain access to banking services.

•• Based on research in rural areas of Bogor, the needs of poor communities include access to affordable financial services. The right technology and management can potentially ease the

265 banking process to make it more efficient and reachable. Amartha’s clients are mothers who live in rural areas with limited access to financial services. Only 40 percent have cell phones. •• Regular banks hesitate to channel financial aid to the microbusiness sector, as it is viewed as high risk and low return. •• The project in Bogor involved a community of 15 to 20 people per group. They were taught about financial literacy before receiving credit, and had regular coaching. The work resulted in engaging around 3,000 creditors by using an Android system on a cell phone, where transactions are paperless and more efficient than conventional banking. •• The Amartha Fintech activities are safe, as they are supervised by the Financial Services Authority (OJK). Amartha Fintech participated in building a platform for investors to measure the performance of creditors working in the micro sector and rural areas. Amartha Fintech does not open branch offices. The investment activities are carried out by assigning agents to circulate the rural areas, collecting funds from villagers and channelling credit. •• In future, Amartha Fintech plans to include the informal sector and reach 65 million people who do not have access to the regular banking system, bringing them onto the radar of the financial system, where they could access banking services.

Poppy Savitri: IKKON Program The ‘Innovative and Creative Program through Collaboration across the Archipelago’ (IKKON) is a government program that places an individual or group of creative people in a region of Indonesia with the objective of encouraging and supporting the development of a potential local creative economy.

•• Bekraf’s IKKON Program has the potential to open up formal employment, develop tourism regions and promote culture. The program works by employing local people who work in a creative economy to gain greater benefits than previously available. •• The IKKON Program has designers and artists, and engages the media as mentors. This program develops the various potential of local economies in order to open up new sources of income. •• This year’s program is being conducted in five regions. The government of Sawahlunto, for instance, has organised 25 festivals over the year. In collaboration with the IKKON program, the festivals are economic opportunities, as they require souvenirs and accommodation for many people. Efforts were taken to ensure that the preferred accommodation was homestay rather than hotels. •• A curator from Italy assists batik makers in Salem village, Brebes district. •• The IKKON Program provides technical skills assistance, such as design training, to create new handicrafts that will become the hallmark of that region. Villagers’ skills are aimed at creating new products, combined with current trending products. •• Coaching is believed to improve creativity through collaboration between the mentor and the crafter, who is educated but lacks experience. •• If the region does not yet have a program, the local government can work with the craft community and the city government to coordinate setting up a blueprint of a creative economy.

266 Bekraf can help bring together local craftspeople, curators and designers so that craftspeople can develop products.

Lisa Peterskovsky: Inclusive Sustainable Economic Development Anyone can do inclusive business using any business model. An inclusive business aims to establish a community as the foundation of an economic pyramid of a business value chain. Inclusive enterprises could include suppliers, distributors, retailers and customers.

•• Inclusive business provides commercial-based goods, services and livelihoods for the poorest communities. •• Inclusive business can be done by anyone, using any business model, from macro to micro scale, thus everyone can enjoy the impact. •• GIZ’s Innovation and Investment for Inclusive and Sustainable Economic Development (ISED) supports inclusive business models that create formal employment by building a connection between the private sector and communities. These include cashew farmers in Bali, quality fruit producers in Hanoi and drinking water management in metro Manila.

Ihsan Maulana: The Portrait of Rural Areas and Agrarian Resources in Indonesia The Sajogyo Institute (SAINS) helps agrarian reformers conduct studies and implement research results.

•• Data shows the Gini coefficient of Indonesian land ownership reaches 0,58; 1 percent of the richest Indonesians have control over 59 percent of agrarian, land and spacial resources. •• This is a reflection of the gravity of the issues faced by the poorest Indonesians in terms of difficulties accessing land. •• The Sajogyo Institute supports the advocacy process for villagers to fight for land titles.

Siti Maryam Rodja: Baraka Nusantara Baraka Nusantara is a community movement at the foot of Rinjani Volcano, Lombok, West Nusa Tenggara that works to help coffee farmers.

•• For coffee farmers in Lombok, the presence of middlemen and loan sharks has worsened their economic situation. Many children drop out of school because they need to help their parents harvest coffee. •• Baraka Nusantara gathered donations by raising funds from a small part of the total coffee yield to build ‘learning houses’ – informal schools. Baraka Nusantara provides skills and advocacy training on people’s rights, in addition to marketing the coffee for consumers. The marketing is carried out by relying on assistance from colleagues in Jakarta and people who have studied abroad, and by organising a ‘charity brew’; brewing coffee for charity in Jakarta and overseas. The funds raised were used to build the learning houses.

267 •• The quality of Arabica coffee from Lombok is very high, thus making the marketing easy and potentially making the farmers more prosperous. •• The coffee farming process has become more environmentally friendly and fair for farmers. Baraka Nusantara expects to replicate the business model in other places in Indonesia once the project in Lombok can truly operate independently.

Andy Nurhanjayani: Participatory Parliament Recess The coaching for constituents group during recess time of the Regional House of Representatives (DPRD) is supported by the DFAT MAMPU program.

•• The main idea is to use the DPRD recess to engage the participation of communities, drawing information on various issues faced by the people on the ground. As a member of DPRD in Parepare, the speaker shared how she used her recess time to invite people with interesting ideas. This was conducted after training by MAMPU, and together they initiated the participatory recess program. There were also focus group discussions, where DPRD members identified issues such as sanitation and domestic violence. With support from MAMPU and the Parepare government, DPRD members organised training on community empowerment, especially for women. •• Based on findings from those meetings, regional regulations were developed by the DPRD. The results of discussions provided direction for the government on how to resolve issues, for example local regulations to address violence against women and children. •• Previously, the recess period had never been incorporated in the local government work plan (RKPD). Through the implementation of participatory recess, people’s aspirations have been accommodated and stipulated in the RKPD document. During the participative recess, people’s voices could be directly conveyed to the DPRD members through texts, phone calls, and so on. The inputs may be general or technical. The technical inputs may be followed up by the DPRD.

Aldi Mardikanto: Boosting the Nation’s Productivity Through Sanitation Development In 2007, around 2.3 percent of GDP was wasted due to poor sanitation. The figure was based on the loss of productive time spent accessing clean water and increasing medical costs due to illness deriving from poor sanitation. The calculation estimated that each individual suffered a Rp1.2 million loss per year due to poor sanitation.

•• Sanitation conditions are improving–the increase is around 2 percent per year. Out of the ‘100 percent Sanitation’ target, only around 76 percent has been realised. This is alarming, as it puts Indonesia as the second worst country among other G-20 states in terms of sanitation. Indonesia is also ranked second in the world as the country that dumps water arbitrarily. •• People need to be educated on using good sanitation to improve their health. •• The Public Bath, Wash Place and Toilet (MCK) Program is considered ineffective as it

268 consumed too much funding and resulted in low outcomes. Rp5 million is enough to build a communal toilet for many families.

Nurul Saadah: Disability-Friendly Public Services: Building Inclusive City Initiatives A disability-friendly public service concept is an inclusive city. SAPDA has supported inputs and suggestions to develop a city that is friendly towards people with disabilities.

•• The inclusive city program is an effort by SAPDA to establish a friendly city for children, women and people with disabilities–no discrimination and justice for all. Every building and piece of infrastructure is built to be used by every member of society. •• The community must participate in creating facilities that are accessible for all. Inclusiveness should be taken into account in drafting development plans. Building developers must construct facilities that are accessible by people with disabilities. •• City disability profile: °° Development of inclusive city road map °° Development of inclusive city indicators °° Certification of public service and inclusive city °° A massive promotion for inclusive city

Rais Nur Latifah: Village School Household Industry Centre ‘Jagorawi’ (Authentic Javanese Jamu Gendong) as the Mobiliser of ‘Women Entrepreneurs’ in Wonorejo Village, Karanganyar By exercising local wisdom and efforts to strengthen entrepreneurship, the women’s group in Wonorejo village took the initiative to develop a household industry, ‘Jagorawi’. This industry is an effort to create added value from spices yielded in the Karanganyar area by producing medicinal herbs, namely ‘Jagorawi’ (authentic Javanese Jamu Gendong).

•• The event was promoted by using a stand during a car-free day, using social media, and by word of mouth. •• The production process was assisted by ITB students and collaborated with the BPLT branch of Central Java. The business continues to grow and factory capacity is increasing. •• With a more modern jamu (medicinal herb) production process, it is expected that there will be an added value from spice harvest yields. The product is presented in an appealing package.

269 Mini Stage F

Yulistina Riyadi, Research Associate, PulseLab, Jakarta Better Understanding of TransJakarta Passengers’ Travel Behaviour Using Data Analysis

Veronica Christamia Juniarmi, BRAILLE’IANT, Indonesia The Mutualism between Technology and People with Vision Disabilities: Mass Audiobook

Teguh Dartanto, Akademi Ilmuwan Muda, Indonesia SAINS45: Indonesian Science Agenda towards a Century of Independence

Gamal Albinsaid, CEO Indonesia, Medika New Era of Social Entrepreneurship in Healthcare

Bambang Suharmoko Sjahrir, Poverty and Equity Team of the World Bank Sub-National Poverty Assessment (SNAPA)

Siti Hasanah, Senior Project Officer for Urban Development, Asian Development Bank (ADB) Neighbourhood Upgrading and Shelter Project

Didi Diarsa, Co-Founder Code Margonda Code Margonda: Depok Can Be the Centre of Technology Development in Indonesia: Making an Impact at Global Level

Ermina Sokou, Social Affairs Officer, United Nations ESCAP (UNESCAP) Inequality in Asia and the Pacific

Lynley Mannell, Team Leader, SAFIRA Program Strengthening Agricultural Finance in Rural Areas of Eastern Indonesia

Yusran Laitupa, Executive Director of the Eastern Indonesia Knowledge Exchange (BaKTI) Smart Practices for Indonesia

270 Yulistina Riyadi: Better Understanding of TransJakarta Passengers’ Travel Behaviour Using Data Analysis The research conducted by PulseLab is a baseline study that aims to find a solution to transportation problems in Jakarta by using an analysis of TransJakarta passengers’ behaviour.

•• Our research hypothesis is formulated as: there is no correlation between the number of passengers at a bus stop and the passing bus. •• The observation unit in this research covers the behaviour of TransJakarta users, and the result is expected to provide a description for the Jakarta provincial government in improving the effectiveness and service of TransJakarta. •• The research was carried out on workdays, from Monday to Friday, at several bus stops packed with passengers waiting a long time.

Veronica Christamia Juniarmi: The Mutualism between Technology and People with Vision Disabilities: Mass Audiobook The development of the mass audiobook was conducted by using technology to support people with vision disabilities. The voice recording was done by volunteers, with beneficiary targets, including people with vision disabilities and people who are illiterate. This innovation is viewed as highly efficient due to its benefits and convenience of use.

•• The audiobook aims to facilitate people with reading impairments who do not have access to laptops. The plan is to distribute it to schools for children with disabilities. •• Program implementation started by recording around 20 books, with a number of volunteers. Each volunteer recorded around 15 to 20 pages. Afterwards, the recording was uploaded. The information on audiobook availability will be conveyed to schools for children with disabilities. Copyright is not applicable, as long as usage is intended for people with disabilities. Uploading is done using a password.

Teguh Dartanto: SAINS45: Indonesian Science Agenda towards a Century of Independence The Indonesian Academy of Sciences (AIPI) published a book, Sains45: Indonesian Science Agenda Towards a Century of Independence. It contains a series of ideas, visions and dreams to advance Indonesia fairly, and to prosper by 2045. This coincides with the 100th anniversary of Indonesia’s Independence.

•• In 2016, the Indonesian Academy of Sciences (AIPI) published a book, Sains45: Indonesian Science Agenda towards a Century of Independence. •• The publishing of this book is considered special as it was distributed for free. It contains a series of ideas, visions and dreams to advance Indonesia fairly, and to prosper by 2045. This

271 coincides with the 100th anniversary of Indonesia’s Independence. •• The main keys of development are the youth and knowledge. The book was written by 17 young scientists of various disciplines. •• The book’s chapters are divided into eight themes: 1. Identity, diversity and culture 2. Archipelago, maritime and natural resources 3. Life, health and nutrition 4. Water, food and energy 5. Earth, climate and the universe 6. Disaster, and community resilience against disaster 7. Material and computational sciences 8. Economy, community and governance

Gamal Albinsaid: New Era of Social Entrepreneurship in Healthcare Indonesia Medika is an organisation whose scope covers collaboration in the scientific sector for innovation of health products. Indonesia Medika implements the results of relevant research in its work and opens up services for healthcare.

•• Data shows that the gap in Indonesia is widening, with only around 20 percent of people enjoying economic growth. •• Projects carried out by Indonesia Medika include: °° Waste micro-insurance (mobilise the community to collect garbage and provide them with healthcare in return) °° Launching the siapapeduli.id website to open up healthcare access for disadvantaged patients that allows them to sign up on the website °° Home Medika, a service that brings doctors and nurses using a cross-subsidised system between advantaged and disadvantaged people °° Audio therapy on pregnancies, health financing systems and digital health.

Bambang Suharmoko Sjahrir: Sub-National Poverty Assessment (SNAPA) The Sub-National Poverty Assessment Application (SNAPA) aims to support local government in analysing poverty. A breakthrough is needed to empower district governments, allowing them to conduct self-diagnosis for innovation.

•• SNAPA can be seen at demo.snapa.id. This application uses data from the National Work Force Survey (Sakernas), the Unified Database (BDT) and a series of maps and village potential data (Podes). •• The challenge in using the SNAPA application is that it is not ready to be used for research, as the data is still at the simulation stage. Data can be presented in PPT and PDF format. •• The SNAPA application team has worked together with Bappenas so that the data available can be utilised for planning and budgeting processes.

272 Siti Hasanah: Neighbourhood Upgrading and Shelter Project Slum upgrading is a cooperative initiative with the Ministry of Public Works and People’s Housing to address issues of residents in slum areas.

•• The initiative is carried out through capacity building and infrastructure construction in slum areas. •• The collaboration is conducted by engaging various stakeholders, and relocating people from slum areas to new locations. •• The intervention locations include Kendari, Palopo and Bima city.

Didi Diarsa: Code Margonda: Depok Can Be the Centre of Technology Development in Indonesia: Making an Impact at Global Level Code Margonda is a creative hub aimed at increasing access for young people to be creative and encouraging them to speak up on the global stage.

•• The district of Depok, a suburb of Jakarta, can become a hub for technology developers in Indonesia, which may have impacts at the global level. •• Code Margonda is established to be a creative hub in Depok aiming to open-up access for young people to be creative and encouraging them to perform on the global stage. •• Code Margonda will become the incubation hub for several (start-up) companies. Currently, Code Margonda has produced 10 start-up companies in Depok.

Ermina Sokou: Social Inequality The study on inequality involves not only economic and social gaps, but is multi- dimensional.

•• Inequality is multi-dimensional. However, it could become an opportunity, for example to gain access to subsidised electricity. •• Assessing inequality in Indonesia involves assessments outside Java and rural areas. •• In Indonesia, there are opportunities to overcome inequality, but the process is slow, especially in rural areas and outside Java. Women are mostly involved in vulnerable work. •• There are some positive trends around increased spending for social protection.

273 Lynley Mannell: Strengthening Agricultural Finance in Rural Areas of Eastern Indonesia (SAFIRA) SAFIRA aims to strengthen agricultural finance in rural areas, as well as strengthening farmers by increasing income and improving welfare.

•• Modern financial practices are generally unfit for small-scale agriculture loans. •• SAFIRA looks at intangible assets utilisation, where small farmers should be provided with suitable credit facilities while improving their agriculture productivity. •• Data shows that the Government of Indonesia supports financing in the agricultural sector through banks or Village Unit Cooperatives (KUD).

Yusran Laitupa: Smart Practices for Indonesia Smart Practices for Indonesia is a local initiative to gain inputs from the people for various solutions to respond to the challenges of development in the region.

•• The Smart Practices for Indonesia initiative is conducted by building partnerships together with local and national media networks, documenting smart practices implementation. •• Replication is carried out by opening a discussion. •• Smart Practices for Indonesia relies heavily on local potential. For example, encouraging the initiative of a local community to help the government in drafting policies that correspond to problems, for a relatively low cost.

274 Market Gallery Of Ideas And Innovation

275 276 277 Art, Science and Development Thursday, August 10, 15.15-15.45 Java Ballroom

Eko SupriyantoThe “Cry Jailolo”Brand Identity Guidelines

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KASTUDIO www.suka.studio istinguished ladies and gentlemen: Assalamualaikum warahmatullahi wabarakatuh. May peace be with us. Om swastiastu and shalom. D First of all, thank you for the opportunity given to me, an artist from rural Magelang. I now live in Solo. I’m a lecturer at the Indonesian Art Institute of Surakarta, and I feel honoured to be here. Please allow me to speak on behalf of other artists who couldn’t be here this afternoon, to transmit the spirit and tell you that as artists we also have strong awareness of our beloved motherland. We may have different paths, but the opportunities given to us as creative people, especially for me in dancing, are very important to voice. It is important for the children of the nation to voice their creativity and work, so we can be heard, be talked about, and so our tradition of arts in Indonesia, of 17,000 islands, is unrivalled. Ladies and gentlemen, I will begin this presentation with economic facts. The easiest thing to measure is the growth index of our nation. In 2016, our country generated its highest income in tourism–Rp172.8 trillion–and the third highest

278 after oil, gas and other extractive industries. ASEAN Cultural Council and UCLA to study at This means that for non-oil revenues, the first University of California, Los Angeles. My title place is taken by tourism. With the amount of is quite something: MFA, Master of Fine Arts. I revenue exceeding the target, Indonesia ranks obtained a Fulbright scholarship to continue highest as a country with the largest income my doctoral degree in the United States, but I from tourism in ASEAN. This fact leads us to a did not pass because I had to read and write, question, what interests the tourists to visit and my body was somewhat isolated because Indonesia? Certainly it is nature, arts and I could not dance again and could not move. culture. Remembering how old this earth is, is So I decided to come back and, alhamdulillah, it wise to rely on industrial profits and nature I could continue to study at Universitas Gajah exploitation for our main income? Because no Mada. I am a UGM graduate, graduating in matter how big our income is from oil and gas, 2014 from Performance and Fine Arts. And the amount that we need to pay for repairing now I have to take my doctoral degree again the damage arising from it is also high. It is because to become a professor, I must have different with a sector that relies on the beauty three international publications. This is the of nature and diversity of culture; it is not to be challenge. But it does not trouble me, although exploited but to be appreciated and preserved. my rank is still IIIB. In my opinion, even though My father is Dayak and my mother is the minister is a professor, I am the expert. So Javanese, which was peculiar. I was already I stand proud with my IIIB level. Then I met the peculiar when I was a kid, when I was forced top American singer, Madonna. I became one by my grandfather to learn silat and dance, but of Madonna’s ten selected dancers. I hold a then I was also interested in njatil. Njatil is folk Republic of Indonesia’s passport. So, I was art in Magelang, using kuda lumping. When I one of Madonna’s dancers and I was a dance was possessed, I ate uncooked chicken, I ate consultant for the Lion King Production in a coconut and broke the shell with my teeth, Broadway, in Los Angeles and in New York. I ate glass splinters, and so on. And when I also worked with the greatest opera director, came home, my father beat me up with his Peter Sellars, and with John Adams on his last belt, and he told me, “koe kui penari Jowo, music composition. penari kraton, ora iso njoget koyo gitu” (“You In 2001, after my mother passed away, I are not a folk dancer but you are a court dancer came back to Indonesia. When I was in the from Surakarta which means you are not US, I learned a lot, I earned the tempting allowed to dance in these kinds of dirty folk dollars, gained so many opportunities. When I dances.”). But it convinced me that a dancer’s almost became a lecturer in Ohio State body must be possessed by extraordinary University, I decided to go back, because things from various dances. when I was in America, I thought I was the best I graduated from SMEA in Magelang, Javanese dancer, the coolest Indonesian majoring in finance because I wanted to be a dancer. But once I was in back in Indonesia, it banker. Then I continued my study in Sekolah was the other way around. I felt that I had yet Tinggi Seni Indonesia in Surakarta or STSI– to understand many things about Indonesia. now ISI. And afterwards, thank God, I obtained What I knew was limited to Java, Sumatera a scholarship from the Ford Foundation, the and Bali. Finally, with the blessing of God, I

279 was called and invited by the former West above the sea that measured 50x60 meters. Halmahera District Head, Pak Namto Hui So it was massive. Roba, in Jailolo, to come and work on the From then on, the kids opened up and I Jailolo Bay Festival, which he created in 2007. tried, because I’m Javanese, but I live in Solo I feel that I am Javanese, with an obscure now, [close friend] of Pak Jokowi. I feel that the descent, from Dayak and Java, to West Javanese are ‘invading’ every place. They are Halmahera. My body is a farmer’s body. My everywhere. Even in Jailolo they have Warung dance potential is agrarian dance, but I have Soto Solo. That is an extreme expression, we to understand maritime nuance. I told Pak don’t invade, but we can be found everywhere. Namto, “Sir, I will take it, as long as I am given Finally, I did not give any Java or Jatilan dance the chance to do research for a year or one lessons to them, or ballet, or any modern and half years.” He granted my wish. “Wis, dance. Instead I explored their local potential, sekarepmu, kamu mau ngapain.” (“It’s up to which made them love their own art, their own you; whatever you want.”). traditions. Alhamdulillah, it worked and the So I did my research there for one-and-a- new District Head, Pak Danny Missy, maybe half years. I cried watching Legu Salai dance he’s here today, he continued the efforts and and I cried watching Sara Dabi-Dabi dance, was very supportive of me as an artist. With impersonating fish on the ground, dying. I had full trust, with unrivalled support, the District never seen a dance as beautiful. And it was Head of West Halmahera, Pak Danny only three hours from Jakarta to Ternate, and continued. He understood that preserving 40 minutes to Jailolo. Compared to my journey tradition, preserving the potential of West to America where I had to learn ballet, which Halmahera children is more important than had to be like this...my butt should be like that anything else. at all times. At last, I agreed to take this job. I Finally in 2013, based on their performance concluded that in West Halmahera if I want to in that festival, I chose seven child dancers. see children dance their traditional dance, I Handsome boys, Portuguese descent, the must meet with child dancers aged 12 years Sahu’s kids. If we talked to them, they give no old or above 35 years. The youth gap did not other answer but (making a gesture with his exist. So it forced me, and the District Head as eyebrows) have you eaten? (Making a gesture well, to say, “I want to work, I want to create a with his eyebrows) like that. Oh, I want to fight, great musical piece about West Halmahera, invite to eat and pick a fight. These kids are but the dancers should be teenagers of amazing, they taught me how to climb coconut secondary or high school.” Usually, boys trees. Jump from one coconut tree to another. dream of being a military or police officer and They climb it every day, maybe 50 to 60 girls want to be midwives or civil employees. coconut trees. In the afternoon, they dive the There is nothing else if they cannot do this; sea, looking for fish. Physically, they are they would have to work at the plantation or as already composed. There is one kid, my fisherman. I insisted. I finally got 450 kids from dancer, name Noveldi, he lost his father, West Halmahera, creating a grand and crazy mother and siblings during the violence. musical piece. The Jailolo District Head was Another kid, my dancer, whose parents were with me in this craziness and he built a stage divorced, was left alone with his brother and a

280 neighbour fed them. There were so many always said the motherland of Indonesia, 80 internal, personal and psychological conflicts, percent of it is water. Diving, then. When I but I chose them anyway for their strengths. came up, I said to the District Head, “Sir, I want Be it their physical, discipline, willingness or to create a contemporary dance based on insight. Finally, I created a work named ‘Cry tradition.” Because Indonesian contemporary Jailolo’. It was not a cry as in crying, but it is a dance–again I emphasise, because my scream. It is an expression, an expression of dissertation is about Indonesian contemporary tremendous spirit of the West Halmahera dance–is unlike any other contemporary children to show their optimism. dance in the world. We always have a secure I was forced by the District Head to dive, foothold, which is traditional in our dance arts. and now I’m a PADI-licensed diver, a professional diver. If I’m not favoured as a dancer anymore, I will dive! And it turns out that one of the coral reefs, the central, according to one of the LIPI professors who happened to be diving with me some time ago, is located in Jailolo, in West Halmahera, because the water circulation from Philippines, from Papua, and from everywhere, goes there and it refreshes continuously. He even said that the coral reefs in West Halmahera are 50 to 60 centimetres in diameter, and there are almost 50 colonies of reefs–compared to other I will create a contemporary creation with one countries that only have 30 maximum. When I small group and I promise to bring it on a world dived, I realised that every district head and tour to showcase my creation. I can now tell local government now holds a big festival. you that ‘Cry Jailolo’ has been performed in Using the term PESONA (charm), there should Europe, Japan, Taiwan and China. And we be charm. Big and massive festival, and spend almost got to perform in Palestine to represent a lot of money. And it worked, and it shows that Indonesia–that never has been done before. our tourism is amazing. But when I dive, I am For contemporary dance, it is Singapore, being inspired, an artist must continue to have Indonesia, Taiwan, Germany, Belgium, imagination, must be crazy, cuckoo, otherwise Switzerland, Netherlands and France, and it they are not an artist. It has to be madness. has been viewed by an audience of 15,000. Until the moment I dive and feel extraordinary And my work, ‘Cry Jailolo’, will continue the silence, a fascinating peace, as if one said that tour until 2019 in very prestigious places. This the world is beautiful, but never went into the year we will participate in the ‘Europalia’ sea, then he lies! Trust me! Please trust me program. Thank you to the Ministry of and please be a diver. Education and Culture! West Halmahera, This is what my grandfather said, “Pak Jailolo, will be the representative in 17 venues Karno is mbiyen, has no idea about Indonesia.” with three creations on West Halmahera. After That was Javanese language. Pak Karno ‘Cry Jailolo’ in 2015, I made a new creation

281 with women. With five female dancers, we just as well as ‘Balabala’. This proves that local performed in Graha Bakti Budaya in Taman governments have potential. As this is the Ismail Marzuki. And we just came back three Indonesia Development Forum, where there is days ago from Paris. So I’m still jet lagged also Bappenas, I hope that art and culture are actually. And it is too hot here for me now. taken into account. Based on my experience, Although I wore my jacket back there, freezing, what people know about Indonesian dance, is while it was too hot in Paris. only Java, Bali and Sumatera. Maybe Papua, ‘Balabala’ will also perform another tour or Kalimantan, but not many know about until 2020. We plan to have a tour to the United eastern Indonesia. Thus it was so ‘sexy’ when States in 2020. And lastly, I’m now preparing I brought the children to dance ‘Cry Jailolo’. my solo work on my seven years of reflection You will see how ‘sexy’ they are here. in West Halmahera, entitled ‘Salt’. It was not That revolution of development cannot walk because the water is salty in Jailolo. But alone. I, as an artist, need funds to create. All

because of my physical process from jatilan artists are poor; no one is rich. But with support dance to Soya dance; from silat to cakalele. from local governments, I could do it. Such From dancing on the stage, gravity and cooperation needs to be announced. underwater, diving, with anti-gravity. And Alhamdulillah, with ‘Cry Jailolo’, the Local Alhamdulillah, with 17 venues, three creations Government of West Halmahera gave full of West Halmahera will represent Indonesia support. With ‘Balabala’, Alhamdulillah, I want for ‘Europalia’ later from October until January to speak with the minister, and maybe later in Belgium, France and Germany. ‘Cry Jailolo’, with other ministries. I have spoken with Pak as I mentioned, is supported by the Local Arief Yahya about when I made the second Government of West Halmahera. This is ‘Balabala’. I did not receive support from the important, please remember. The artist is Government of Indonesia. I finally stopped granted trust, without intervention, to create in receiving support from the West Halmahera madness. I fulfilled my promise that ‘Cry government because I already had seven co- Jailolo’, my contemporary dance, has been productions. After the success of ‘Cry Jailolo’, touring the world in prestigious festival venues, friends from festivals, presenters, programmers

282 and directors in all of our links or networks the kids of ‘Cry Jailolo’ later. After three months asked me, “Eko, what’s next?” I made another touring, they can buy four cows, and bentor creation with Jailolo because there were still (motorcycle rickshaw). Novaldi can rebuild his so many things to do in Jailolo–with the damaged house. It’s not that I want to brag women, with the girls. So I got my co- about myself, but one person came back with production from TPAM, Yokohama Performing almost tens of millions, it excluded the per Arts Meeting in Japan, the National Theatre in diem, they spent their per diem for Nike shoes, Taiwan, Taipei. And then, Musonturm in bought a cool jacket, speakers, and so on, Frankfurt, de Singel Antwerpen in Belgium, souvenirs of course. And they are all in Asia Topa in Melbourne, the Sydney Festival, university now. Some of them want to be a and Teater Salihara in Indonesia. They provide librarian, weird right. A Jailolo kid wants to be not only money, which is quite a lot, 10,000 a librarian. No longer wants to be military or euro to 15,000 euro per co-production. So police personnel anymore. Some go to the imagine this, ladies and gentlemen, that as an state administrative college to become a civil artist, I no longer ask for help from the local servant, and the like. Thanks to the support of government, but there are international the West Halmahera government, and the institutions that provided me with money to Bupati, Pak Danny Missy, they granted make a creation for one and a half years, the scholarships for the ‘Cry Jailolo’ and ‘Balabala’ ‘Balabala’ process until the end. Plus, they kids to complete undergraduate degrees. I

invited us to do a tour until 2020, we already hope I can teach them to be leaders and they have our complete schedule. turn out as leaders in their respective regions. To the community, the government, both So, this balance is important, to be seen from national and local, please do something so an arts and culture context. Not only the that there will be more artists like me that can development of buildings, but the development be supported by the local government and the of arts and culture is also important to be central government. Academicians (because considered. I’m also a lecturer) and business, you can ask Okay, now I will present my dance, ‘Cry

283 Jailolo’ performed by seven local kids from their land, introducing their region, representing West Halmahera, high school graduates, Indonesia with its Unity in Diversity, its some are in university now, in the third Pancasila (the five tenets of Indonesia), with semester. But they are the children of West its tremendous diversity, and to feel proud of Halmahera who are optimistic about building their mountain, sea, parents and their traditional houses. Enjoy the performance.

284 INNOVATE PLENARY: The Way Forward: How to Develop a More Equal Indonesia

Thursday, August 10, 15.45-16.45 Java Ballroom

Key questions: •• Five main takeaways from the Indonesia Development Forum 2017, and the link with the theme of the 2018 Indonesia Development Forum, “Regional Disparity”. •• The summary of key outputs and broad outlines of the Indonesia Development Forum 2017 sessions. •• After the Indonesia Development Forum 2017, which direction to go based on the discussion? From rhetorical to reality consistently: setting up the agenda for RKP 2019 and the RPJMN draft 2020-2024.

Prof. Bambang P.S. Brodjonegoro, Ph.D, Minister of National Development Planning/Head of the National Development Planning Agency of the Republic of Indonesia

Inia Batikot Seruiratu, Minister of Agriculture, the Republic of Fiji

Prof. Martin Ravallion, Georgetown University

Sugiyanto Sabran, Governor of Central Kalimantan

Sutarmidji, Mayor of Pontianak, West Kalimantan

285 Prof. Bambang P.S. Brodjonegoro, Ph.D

“I am very happy with the proceedings over these two days, as everybody has been participating actively. Although we have had so many break-out sessions, participants in all the sessions have been enthusiastic about how to contribute to the policies or possible actions in reducing inequality in Indonesia. Of course there are a lot of ideas. There are a lot of innovations, and in this innovation plenary I would like to bring up some important points. The first one, of course, is that we understand that the main attention or the priority should be on the lowest 40 percent of the income group in Indonesia. Meaning that government has to be more aggressive in reducing absolute poverty for the lowest 40 percent of the income group in Indonesia. How can we do that? Of course, there are a lot of things. You already know about the type of government interventions to the 40 percent poorest. But the point that we have obtained from the discussions and ideas during the two-day forum is that we need participation from outside the government. Inequality is not only for the government to deal with. Let us remind ourselves that although the government is responsible for reducing inequality, it cannot do it on its own. It takes support and collaboration from all parties to solve and find solutions to the poverty problems: the community, NGOs, academia and local governments. At the end of the day, we know that everybody will help each other in order to reduce inequality itself. So, the awareness that this is a multi-stakeholder effort is already understood by the majority of the participants in this forum. The second big issue that I would like to raise with you is that we know that inequality is a global issue. Inequality is not just about poverty. So, I would like to pay attention to the idea of how to share the economic pie between big business, small and medium enterprises, and micro businesses. Of course, we know that we need growth; without growth it is hard to promote equality. So, to promote growth we need to have a good investment climate, we need to attract Foreign Direct Investment and we need to have room for big companies, for big company owners to expand their businesses in Indonesia. But at the same time we need to pay attention to vertical integration. In Indonesia, I think, we need to follow what Japan, Korea, and to some extent Taiwan have been doing quite well. Of course, we know there are many big companies, multi-national companies from those countries. But at the same time, we can see that their small and medium enterprises have been growing rapidly and have been doing very well. And they have contributed to reducing inequality in those countries. How can they do that? One of the things is that the big companies bring the small and medium enterprises to be part of their supply chain and value chain. One good example that actually has been done in Indonesia is in the automotive industry. Of course, the automotive industry is a high-tech industry, it is capital intensive and only big companies can run profitable automotive businesses. But they cannot work alone. These big companies will need the participation of small and medium enterprises by including them, by involving them in the supply chain of the automotive industry. So, they might work on the bigger part of, say, an automotive body, but then all the spare parts, all the smaller parts will be made and produced by small and medium enterprises. I think this model is very good in not only promoting small and medium enterprises, but more importantly reducing inequality. So the second point that has been part of the discussion is that it is important to pay attention to vertical integration.

286 My third point is the financial sector. Access to finance is still very important, especially micro finance. Micro finance for every group of people is critical to promote entrepreneurship. Why entrepreneurship? Indonesia will only be an advanced country, and an advanced economy or developed country if we have more entrepreneurs, not just in terms of numbers but also in terms of quality. But, first things first, we need to increase the number of entrepreneurs and the way to increase entrepreneurs, of course, number one is access to finance. But access to finance itself is not enough. We need more in order to make them graduate from a micro level to medium – micro to small, small to medium and hopefully medium to become large companies. Aside from finance, of course, the so-called venture capitalists, I think are critical. They need not only to have good financial access, but also good market access. They need to know how to use more advanced technology in their production and, in the end they need to know how to be good managers of their companies. So, this kind of venture capitalist or kind of assistance, let us say from bigger companies, I think would be critical in order to create more entrepreneurs. More importantly, we need more entrepreneurs. The other thing is social entrepreneurship. Social entrepreneurship has become modern in Indonesia. So, they are not looking for just profit, but they are also looking to empower the community in which they work. I think we need to increase the number of social entrepreneurs in every part of Indonesia in order to promote more community empowerment, especially in their economic life, in agriculture and in fisheries, because most poor people in Indonesia are either in agriculture or in fisheries, farmers or fishermen. So, again, social entrepreneurship is needed in those areas. Last but not least, I would like to emphasise the eastern part of Indonesia. Although we are talking about income inequality generally, we have to pay more attention to the eastern parts of Indonesia; this is critical. Regional disparity will be the topic for next year’s Indonesia Development Forum. We can see in many provinces in eastern Indonesia, they might have a relatively low Gini ratio but unfortunately they have a relatively high poverty rate. So, this means there is equality of poverty in the eastern part of Indonesia. We need to prioritise how to reduce extreme poverty. Also, we have seen that there are some basic issues in the eastern part of Indonesia, such as stunting of children. I think in some of the eastern part of Indonesia, we really need to start from the basics in order to reduce poverty. I think budget allocation, as well as government priorities, need to be directed more towards the eastern part of Indonesia. Of course, I also wish to touch a bit on taxation. Again, reducing inequality will not be possible if we do not make efforts to ensure that the highest income group pays the taxes they are supposed to pay. Of course, they are paying taxes, but the question is whether the amount they are paying reflects their wealth. What we hope is that in Indonesia, to have tax revenues as Professor Ravallion and Jeffrey Sachs mentioned on the first day, we need to have taxation rates of 15 percent or more. One thing is to make sure that everybody pays taxes according to their wealth and assets. I think, based on my previous experience, one answer is to increase tax revenues and improve inequality, because if they do not pay tax, you know, or pay much less tax than they are supposed to pay, clearly inequality will be rising. That would be my observation from today’s forum. Thank you.”

287 Inia Batikot Seruiratu

•• Although the government takes the lead, participation from the private sector is highly needed for development. Donors can also make a huge contribution. •• The potential of women and youth groups lies in empowerment and leadership. Basically, if women are empowered, the community will be empowered as well. •• The rural economy and agricultural smallholders can make a significant contribution to development if they are supported by available infrastructure. •• Growth is needed to maintain sustainable development.

Prof. Martin Ravallion

There are five questions that we need to ask ourselves to understand the relationship between inequality and growth: •• What makes the consumption trend increase? •• Why can BPS not capture the decline of inequality? Are the instruments inappropriate? •• Are there gaps and differences between stunting in western and eastern Indonesia regarding access to health, nutrition, and so forth? •• Does the Government of Indonesia know whether the methods or implemented policies are effective or not with the current outcomes? •• Which development programs should be improved and extended, and which ones should not, and what about the timeframe?

Sugiyanto Sabra

•• The Gini ratio in Central Kalimantan is 0.37 percent. The Gini ratio became more imbalanced due to the injustice caused by the Central Government. •• The natural wealth of Central Kalimantan is mainly controlled by private ownership and institutions based in Java, not Central Kalimantan. •• The Central Kalimantan government considers the Government Regulation on Palm Oil unfair, as it operates without engaging local communities. Similar for the mining sector. Most Contracts of Work of coal businesses are held by foreign companies. •• The plan to move Jakarta to Central Kalimantan is worth considering as an effort to reduce inequality.

288 Sutarmidji

•• The availability of data has become an issue and challenge for investment and needs to be addressed urgently. Data from BPS is not always accurate and does not always reflect real conditions. •• It takes the same vision and synchronisation of poverty variables to clarify the problems of inequality, as the current data is using various measurement indicators of poverty. It confuses investors. •• In the process of finding solutions to poverty, there should be efforts to make people feel less poor. For example, by building adequate health facilities. •• Social insurance has the potential to be a new problem that can worsen the social gap, if it leads to the unequal provision and quality of public services.

289 Innovate Gallery Plenary

290 Closing Session Thursday, August 10, 16.45-17.00 Java Ballroom

The Prof. Bambang P.S. Brodjonegoro, Ph.D, Minister for NationalIdentity DevelopmentBrand Planning and Head of the National DevelopmentGuidelines Planning Agency of the Republic of Indonesia

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www.suka.studio O STUDI KA

Assalamualaikum waramatullahi wabarakatuh. Good evening. May peace be upon us. Ladies and gentlemen, on behalf of Bappenas we would like to thank you for your participation for two days in the first Indonesia Development Forum. We are so happy because from the committee notes, this two- day event was attended by more than 1,500 people. And what is more important is that this 1,500 people come from various backgrounds. Some came from the Central Government, ministries and agencies, some came from local government, development partners, academicians, NGOs, practitioners and the private sector. The most important thing is the majority of participants were the younger generation, our next generation. This year IDF was started by inspiring the participants with smart practices that have been done from the government level to individuals. So that was the stage of inspire. Then the participants were invited to imagine how Indonesia would look in the future without inequality, imagine. Lastly, IDF 2017 formulated innovation or

291 breakthroughs that could be executed at undergraduate degrees, went on to work at central level and most importantly at local accounting offices, but afterwards they 100 level, innovate. Therefore, we have percent entered social entrepreneurship. Well, implemented the three pillars of IDF: inspire, maybe this is the embryo of Indonesia’s future, imagine and innovate, within two days. And we more social entrepreneurs will reduce future just saw the winners of the best papers, we inequality. Well, from these two days, of the are so happy not only for the quality of papers various inputs and innovations that have been that we received but also, when we announced discussed, have been proposed, we hope they the call for papers, within a relatively short will be discussed further and formulated, and time, because this event was created in a hopefully will become policies and programs relatively short time, we received more than that can be implemented. 500 abstracts. With help from expert friends in Next, the follow-up to this event is drafting a the development economy field, we were able policy paper about reducing inequality, and we to select 44 papers that have been presented are so lucky to have so many interactions, so over the past two days. many genuine proposals that are actually It gives a vibe of optimism to us in the workable, and some that are already proven, government and to the world of science in which will help us to make the strategies. This Indonesia that we have these contributors. I is not only at the macro or conceptual talked to the winners of the two papers. It theoretical stage, but can be directed to surprised me because I thought the two policies and also to action. We are so grateful winners would be from universities, because for your participation and we will discuss the my background is university. My surprise was program policy strategies in the limited cabinet that of the two winners, one was my former meeting. We will engage local governments to staff at the Directorate General of Tax, Ministry reach a commitment for reducing inequality of Finance. Another one was from the private and the commitment will then be adapted to sector, which is amazing. How can someone the cycle of planning and budgeting for from outside the academia or research world development. Hopefully next year, the have such a strong drive to write a quality Governor of Central Kalimantan will not have paper on a difficult topic, inequality. So once too many complaints about budget limitations again, I would like to congratulate you and in carrying out development and reducing salute you all ladies and gentlemen, brothers inequality in his region. and sisters, the young generation who Because IDF is an annual event, hopefully it contributed such quality papers. will continue. We will make IDF a We have seen an example of education, communication platform that continues to be and we are glad because one of the winners held, and we expect it to be part of strengthening comes from the category that I talked about in the development planning system. As the the last session, which is social previous host mentioned in the opening of the entrepreneurship. This is what we expect from last agenda, next year will be on a similar our young generation. When I was still at topic, still inequality. But we will focus on Universitas Indonesia, I met some of my regional disparity, and next year we are students who, after graduating from expecting participation from activists in the

292 region, whether local government, NGOs or So, sharing knowledge, sharing experiences, local people. We want to see how local sharing best practices in this kind of forum wisdom, how the local best practices, can be would be beneficial for our success in future used in reducing gaps among regions. In development. And none of us would want addition, we still have the macro issues, Indonesia to enter the middle-income trap. because to be honest we are still worried. Ladies and gentlemen, before I officially Before decentralisation, the role of Java might close this event, I would like to extend my be 60 percent. During decentralisation there is utmost appreciation to the committee who a declining trend. It was close to 56 percent, prepared this event within a relatively short but lately somehow it has increased again to time. I would like to give a special 58 percent. This means that there is a structural acknowledgement to Ibu Yanti from Bappenas, problem that cannot be solved through for heading the organising committee. And to business as usual. At next year’s Indonesia several Echelon II who were directly involved, Development Forum, with the topic of regional Pak Maliki and Pak Teguh. Thank you for your

disparity, we hope to get the answer; it might hard work. I would also like to acknowledge not come from Jakarta but from various my colleagues from KSI under the leadership regions of Indonesia. And we can see that of Pak Petra who has collaborated and worked several regions of Indonesia are unique; they hard to make this event so successful. And of can grow, they are able to reduce inequality course the support from all other parties. And and able to reduce poverty. Unfortunately, with that I declare the Indonesia Development some regions are going the other way around. Forum 2017 officially closed.

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The Indonesia Development Forum (IDF) is key initiative of Bappenas and development partners to provide a platform for government leaders and development stakeholders to come together and discuss development agendas in Indonesia, as well as develop thinking, approaches, and innovations in formulating recommendations and solutions. The inaugural IDF was held in Jakarta on 9-10 August 2017, attended by more than 1,500 participants from Indonesia and overseas, representing governments, the business sector, research institutions, the education sector, civil society organisations, international development partners and the general public.

INSPIRE • IMAGINE • INNOVATIVE

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Website : www.indonesiadevelopmentforum.com Email : [email protected] Twitter & FB : @IDForum2017