A Strategic Road Map to Implement Eco-Sustainable Water Infrastructure

A Strategic Road Map to Implement

Eco-Sustainable Water Infrastructure

(Pembangunan Sumber Daya Air berbasis Lingkungan Berkelanjutan )

in Indonesia

Eva G. Abal and Candra R. Samekto

(for BAPPENAS and UNESCAP)

Version 9 - January 20141

1 Please note that this remains in draft form prior to future consultation.

Table of Contents

SUMMARY IV

I. BACKGROUND 1

A. WATER CHALLENGES IN INDONESIA 1 B. CONCEPT OF ECO-EFFICIENCY 2 A) WHAT IS ECO-SUSTAINABLE WATER INFRASTRUCTURE (ESWIN)? 3 B) INITIAL APPLICATION OF THE APPROACH IN INDONESIA: LESSONS LEARNEDERROR! BOOKMARK NOT DEFINED.

II. THE ROADMAP FOR ECO-SUSTAINABLE WATER INFRASTRUCTURE (ESWIN) 5

A. STATUS AND LEVERS FOR ESWIN 5 C) THE SIX ECONOMIC CORRIDORS AND RELATED WATER DEMANDS 8 D) INTEGRATED WATER RESOURCES MANAGEMENT 12 B. DEVELOPMENT OF THE ESWIN ROADMAP 12 B) ESWIN, SUPPORTING IWRM FRAMEWORK 15 C) EXTENDING ESWIN TO MANAGE THE WATER-ENERGY-FOOD NEXUS 15 C. THE PROPOSED ESWIN ROADMAP 17 A) OBJECTIVES AND PROCESS OF THE ESWIN ROADMAP 17 B) ROADMAP TARGETS AND TIMEFRAME 18 C) THE ESWIN ROADMAP FRAMEWORK 18 D) ENABLING COMPONENTS 20 D. PROMOTIONAL STRATEGIES 29

III. APPENDIX 34

APPENDIX I: KEY STAKEHOLDERS FOR ESWIN ROADMAP 34 APPENDIX II. THE SIX ECONOMIC CORRIDORS 38

LIST OF TABLES

Table 1. Pathway to ESWIn and green growth in the six economic corridors ...... 9

Table 2. Foundation activities: Institutional Coordination and Planning...... 22

LIST OF FIGURES

Figure 1. Indonesia’s six economic corridors...... 8

Figure 2. Positioning ESWIn in Indonesia’s water regulations and River Basin plans...... 12

Figure 3. Positioning Eco- Sustainable Water Infrastructure in Indonesia’s Policies and Plans...... 14

Figure 4. ESWIn can be one of the effective approaches to achieve the vision of IWR M Plans (e.g. Citarum IWRM Roadmap)...... 15

Figure 5. Paradigm shift required to reflect water-energy-food nexus...... 16

Figure 6. The overall targets of the Roadmap for 2013-2019 ...... 18

Figure 7. Proposed strategic framework for the implementation of ESWIn Roadmap...... 20

ECO-SUSTAINABLE WATER INFRASTRUCTURE (ESWIn) FOR INDONESIA:

iii

Summary

I. Background

A. Water challenges in Indonesia

Indonesia is the second largest country in Asia and the Pacific in terms of total renewable water availability2. It has average annual rainfall over 2500 mm, but this falls disproportionately over the year. During the rainy season from May to September, the country receives 80% of annual rainfall while the remaining 20% falls over a 7 month period. In addition, rainfall is not evenly distributed over the country. For example, areas such as Bali and Java have abundant rainfall (~2000 mm/annum), while other areas (such as Nusa Tenggara) receive very limited rain (~400-600 mm/annum). The spatial and periodic distribution of rainfall poses a challenge to Indonesia’s water supply and water resource management, despite its abundant water resources.

In addition, sanitation and drinking water are serious challenges. Over recent decades, rapid urban and industrial development has contributed to a decline in water quality as well as water availability. As a result, securing potable and clean water has been challenging. Inadequate and aging water infrastructure and lack of operation and maintenance capacity have compounded these problems. The increasing demand for water due to rapid population and economic growth will further aggravate water security in the future.

In the past, the development of water resources and infrastructure played a critical role in stimulating rapid economic growth and reducing widespread poverty in Indonesia. However, in recent years growing demand for water has put pressure on aging infrastructure, requiring substantial long-term investment. Given the importance of the role that water infrastructure has played in the socio-economic development of Indonesia, inadequate and inefficient water infrastructure along with worsening water

2 United Nations Economic and Social Commission for Asia and the Pacific. 2012. Statistical Yearbook for Asia and the Pacific 2012. Bangkok, Thailand.

security will likely most likely negatively affect national development prospects in the long term.

To address the challenges facing water resource management, the Government of Indonesia has initiated a water resources sector reform programme that encompasses policy, institutional, legislative and regulatory measures. In parallel, the Government has undertaken actions at the central and local levels to address the challenges of water scarcity and use.

Overall, there remains a need for a new approach toward water infrastructure development and a shift in paradigm to include community participation, effective institutions and good information systems, and adequate data to augment conservation, utilization and control3.

B. Concept of eco-efficiency

The dominant paradigm of natural resource management by centralized authorities has resulted in unsustainable use of those resources, while sub-national authorities often lack the means and legal powers to bring about change. This is especially so in the cross-boundary dimensions of water systems, which suffer from a lack of coordinated response and management of resources over different levels of the government. This necessitates a fundamental shift in the management and use of resources, including the development of effective and collaborative institutional frameworks and relationships. However, developing countries, including Indonesia, face challenges in transforming towards a new paradigm of infrastructure development and ecosystem services that enhances productivity through adequate investment in those resources while pursuing rapid economic development.

3 Sugiyanto and C. Samekto. 2008. The Status and Challenges of Water Infrastructure Development in Indonesia. Presented in the First Regional Workshop on the Development of Eco Efficient Water Infrastructure for Socio-Economic Development in Asia and the Pacific Region; Seoul, November 10- 12, 2008.

a) What is Eco-Sustainable Water Infrastructure (ESWIn)?

For Indonesia, eco-efficient water infrastructure is often referred to as eco-sustainable water infrastructure (ESWIn). It can be defined as an integrated approach in water infrastructure development to achieve ecological and economic efficiency through i) maximizing the value of water related services; ii) optimizing use of natural resources and; iii) minimizing impacts on ecosystems. In Bahasa Indonesia, ESWIn could be referred to as “Pembangunan Sumber Daya Air berbasis Lingkungan Berkelanjutan”.

For water resources, the eco-efficient infrastructure approach represents a paradigm shift of water resource management from market-based efficiencies dominated by water supply to a more holistic strategy based on multiple objectives and balancing ecosystem services, economic development and human welfare. In so doing it also can be seen as complementing the outcomes of the United Nations Conference on Sustainable Development, held in Rio de Janeiro, Brazil, in June 2012 ( the Rio+20 Conference) which called for a shift to a green economy in the context of sustainable development and poverty eradication4.

Water is recognized to be at the core of sustainable development and is closely linked to a number of key global challenges 5 . In this connection, eco-sustainable infrastructure contributes to achieving sustainable development and poverty reduction by enhancing resource efficiency including energy and water resources. Therefore, eco-sustainability in water infrastructure should be accepted as an implementing strategy to achieve Millennium Development Goal (MDG) 1 (poverty reduction) and MDG 7 (environment protection) in a complimentary manner.

Eco-sustainable infrastructure includes not only innovative physical components such as green construction technologies and efficient management knowledge, but also emphasizes non-physical or institutional infrastructure components such as promotion

4 United Nations. 2012. The Future We Want: Outcome document adopted at Rio+20. 5 United Nations Economic and Social Commission for Asia and the Pacific. 2013. Chiang Mai Declaration. Adopted at the 2nd Asia Pacific Water Summit. 20 May 2013.

of ecological pricing and green tax reform, application of resource sensitive design and integrated planning infrastructure, decentralized planning, and technologies which support sustainable use of ecosystem services6.

Indonesia has initiated the shift towards eco-sustainable water infrastructure through the National Medium-Term Development Plan 2010-2014 as one of the policy directions in water infrastructure development, especially for raw water supply and flood management. The concept of eco efficient clearly states on Chapter 5 of Book II of the National Medium Term Development Plan 2010-2014 (page 56 and 65). One of the water resources development objectives in the period of 2010 - 2014 is to increase the coverage and quality of raw water service in optimal, sustainable, fair and equitable manner by developing and applying low priced and environmental friendly water treatment technologies in line with eco-efficient principles. Water related disasters management particularly floods and landslide will be undertaken through combined structural and non-structural approaches. It focuses on high density regions, strategic areas, as well as the centre of economic growth by means of river revitalization and applying eco-hydraulic values as a shifting paradigm from river rehabilitation to river management.

Indonesia can potentially provide broader lessons in eco-sustainable water management at the regional level. Indonesia’s economy is currently positioned as the 16th largest in the world by nominal GDP. In the water resources management arena, Indonesia is also actively involved in many organizations such as Network of Asian River Basin Organizations (NARBO) and Global Water Partnership South East Asia. Many countries face similar challenges in terms of economic development and environment issues to Indonesia. Indonesia’s experience in adopting such an important conceptual and policy shift could therefore provide a positive example for

6 United Nations Economic and Social Commission for Asia and the Pacific. 2011. The Policy Brief and Recommentation for Decision Makers on How to Integrate Eco-Efficiency into the Five-year Development Plan in Indonesia: A Discussion Paper. Bangkok, Thailand:UNESCAP.

other nations in addressing the challenges and barriers in managing water resources for the development of a green economy in the context of sustainable development and poverty eradication, as a core outcome of the United Nations Conference on Sustainable Development (Rio+20 conference)7. II. The Roadmap for Eco-Sustainable Water Infrastructure (ESWIn)

A. Status and Levers for ESWIn

Eco-sustainable water infrastructure (ESWIn) development provides a mechanism to address the challenges of accelerating economic development in the context of climate change and disaster resilience in Indonesia. A number of existing plans and strategies provide levers for the operationalization of the ESWIn concept in Indonesia and provide a strong basis for the implementation of the ESWIn Roadmap.

ESWIn operationalizes the principles adopted in various laws and regulations into planning documents and offers coherence across different levels of government, i.e. national, provincial and district/city levels. Local governments are very important players in the implementation of ESWIn. ESWIn should be reflected in the existing planning process and is aimed to complement rather than duplicate existing roadmaps that aim for sustainable development.

a) Indonesia’s Water Reform: The Water Act (Law 7/2004)

Indonesia’s Water Act covers all aspects of water resources including water resources conservation, management, and control damage to the environment caused by overexploitation of water resources. Law7/2004, based on the IWRM principle, is aimed at promoting a coherent, integral, sustainable and open approach to water resources management. More importantly, the law encourages community, businesses

7 United Nations. 2012. The Future We Want: Outcome document adopted at United Nations Conference on Sustainable development (Rio+20 conference)

and non-government organizations to participate in the process of planning for the integrated management of water resources. b) National Development Plans

i. Long-Term National Development Plan (RPJN 2005-2025)8

The National Development Vision for 2005-2025, which is embedded in Indonesia’s Long Term National Development Plan, is an Indonesia that is self-reliant, advanced, just and prosperous. The Plan, which is stated in Law 17/2007, outlines eight National Development Missions summarized as: 1) Realizing a society that has high morals, ethics, culture, and civilization, based on the Pancasila; 2) Realizing a nation that is competitive; 3) Realizing a democratic society based on the rule of law; 4) Realizing an Indonesia that is secure, peaceful, and united; 5) Realizing development that is equitable and just; 6) Realizing an Indonesia that is balanced and sustainable; 7) Realizing Indonesia as an archipelago nation that is self-reliant, advanced, strong, and that is based on the national interest; and 8) Realizing an Indonesia that has an important role in the international community.

ii. Medium –Term National Development Plans (RPJMs)9

The strategy to implement the Vision and Mission is specified in five-year stages in the form of the Medium-Term Development Plans. It has four separate medium term plans and each term has a scale of priorities and development strategy that constitute a continuity of scale of priorities and development strategies of preceding periods. The Second RPJM (2010-2014) aims at the greater consolidation of the reform of the country in all fields by emphasizing endeavors for increasing the quality of human resources, including the promotion of capacity building in science and technology and

8 Ministry of National Development Planning (BAPPENAS), Republic of Indonesia. 2005. The National Long-Term Development Plan (RPJPN 2005 – 2025). 11 Ministry of National Development Planning (BAPPENAS), Republic of Indonesia. 2010. The National Mid-Term Development Plan (RPJM 2010-2015)

the strengthening of economic competitiveness. Amongst other objectives, the second Medium-Term National Development Plan advocates for the accelerated development of infrastructure by further enhancing cooperation between the government and the business community.

iii. Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI)10

Indonesia’s Master Plan (2011-2025) is an integral part of the National Development Plan. MP3EI directive is aimed at implementing the 2005-2025 Long-term National Development Plan, with the vision of the acceleration and expansion of Indonesia’s economic development to create a self-sufficient, advanced, just, and prosperous Indonesia. Therefore, it aims to provide the building blocks to transform Indonesia into one of the ten major economies in the world by 2025. MP3EI features two main elements of development: ‘Acceleration’ and ‘Expansion’. The acceleration element of development is expected to boost Indonesia’s economic growth. By 2025, Indonesia aims a per capita income of USD 14,250-USD 15,500 with total GDP of USD 4.0-4.5 Trillion.

Indonesia’s economic development targets encompass all regions of Indonesia, and will impact on all communities across the country. To achieve this objective, the MP3EI promotes both existing and new growth centers, which combine sectoral and regional development approaches into one strategy. This strategy will increase the accumulative growth of the development within individual regions, and at the same time reduce spatial imbalance between regions. Reflecting specific characteristics and local conditions, each region will have its own development plan. With regard to the Roadmap to ESWIn, all development plans have significant implications for water resources management.

To achieve these goals, the MP3EI identifies eight main programmes which consist of

12 Coordinating Ministry for Economic Affairs and Ministry of National Development Planning. 2011. Masterplan for Acceleration and Expansion of Indonesia Economic Development 2011 - 2025. 1 ed. Jakarta: Coordinating Ministry for Economic Affairs.

twenty two main economic activities. The three main elements of the implementation strategies are as follow:

a. Developing the regional economic potential in 6 Indonesia Economic Corridors: Sumatra Economic Corridor, Java Economic Corridor, Kalimantan Economic Corridor, Sulawesi Economic Corridor, Bali – Nusa Tenggara Economic Corridor, and Papua – Kepulauan Maluku Economic Corridor;

b. Strengthening national connectivity locally and internationally;

c. Strengthening human resource capacity and national science and technology to support the development of main programs in every economic corridor. c) The Six Economic Corridors and Related Water Demands

Under the MP3EI, the focus for national development will be through six economic corridors that comprise all major economic regions in Indonesia, as illustrated in Figure 1. The theme for each economic corridor is formulated taking into consideration the vision of: Indonesia as basis for global food security, center of processing products of agriculture, plantation, fishery, mineral and energy resources as well as a center of global logistics.

Figure 1. Indonesia’s six economic corridors

The following Table 1 of the ESWIn Roadmap evaluates the water-related demands placed through the development economic corridors, and the options which exist through policy to ensure sustainable resource management with the key focus being on water. Appendix 2 outlines the corridors in detail.

Table 1. Pathway to ESWIn and green growth in the six economic corridors Economic Challenge in Economic Characteristics Economic Development Focus ESWIn Leading Agencies Corridor Development Sumatera  Rich Natural resources  Main economic activities are  Land and water use  Promoting sufficient use of water for Local Governments  Minerals and mining palm oil and rubber competition – within managing water demand through Ministry of Environment  Medium to heavy rainfall (agriculture and industry), coal, agriculture (paddy, palm oil introduction of new technology Ministry of Public Works  Moderate population steel and shipping and rubber) and between together with incentive mechanisms density  Construction of Sunda Straits agriculture, industry, and public awareness campaigns Bridge settlements (domestic use)  Small-scale water supply alternatives  Improvement of transport  Deforestration for domestic use particularly in rural services (land handling and  Wastewater issues areas, e.g. community managed port capacity) especially from mining and water supply systems and rainwater industries harvesting at household level  Water supply provision for  Proper use of decentralised cheap supporting high demand technology for treating wastewater, from ports and industrial e.g. constructed wetlands activities as well as  PPP for centralised water supply domestic use in urban and provision for urban areas and rural areas industries  Payment for environmental services and polluter pay principles  Provision of sufficient power for industry Java  Large population  Shifting to services-based  Water supply and sanitation  Sustainable electric power Ministry of Energy and  High densities economy provision for people in both generation, e.g. solar cell, biogas and Mineral Resources  Humid tropical climate with  Main economic activities; food urban and rural areas micro-hydro power plant for remote Ministry of Public Works heavy rainfall & beverage, textile,  Water supply provision for rural areas Local Governments  Fertile soil especially for transportation equipment, industries and other  Rainwater harvesting to increase paddy shipping, ICT, defence economic activities access to safe and clean water; and equipment, and greater Jakarta  Huge electric power at the same time reduce flood peak area demands flow  Improvement of transport  Land subsidence and  SRI and irrigation water reuse (with systems (port, mass public groundwater over optimised treatments)

Economic Challenge in Economic Characteristics Economic Development Focus ESWIn Leading Agencies Corridor Development transport, and roads) extraction in some big cities  Cheap and proper decentralised  Provision of electricity, clean  Waste water issues sanitation technologies water treatment plant and  Flooding  Water sensitive urban design, water wastewater treatment reuse and water recycle facilities.  Centralised waste water treatment  Reforming flood control plant through PPP especially for systems industry  River cleaning and restoration

Kalimantan  Large land areas including  Main economic commodities;  Conservation issues (forest  Sustainable electric power Ministry of Forestry tropical forest oil and gas, coal, palm oil, steel, and peat land) generation, e.g. water generated Ministry of Environment  Massive peat land areas bauxite and timber  Water supply and electricity power plant (micro hydro power) Ministry of Public Works  Medium to heavy rainfall  The development of supporting provision for mining and  Sustainable forest and peat land Local Governments  Natural resources potential infrastructures: improving industry in remote areas management  Majority of the people in access roads and  Massive electricity demand  Proper spatial planning and rural areas work in farming transportation networks, for industries implementation and fisheries sectors increasing river and sea port  Clean water and sanitation  Decentralised water supply system, capacities, increasing electricity provision particularly in electric power generation, and generating capacity, remote rural areas waste water treatment plants  Environmental impacts (including sanitation) in remote especially from mining areas (for mining and industry activities as well as domestics)  Law enforcement and incentives mechanism

Sulawesi  Large land area  Main economic activities;  Competing use of land and  Law enforcement and incentives Ministry of Public Works  Long coast lines agricultural sectors (rice, corn, water for agriculture and mechanism Ministry of Agriculture  Medium to heavy rainfall soybean, and cassava), cocoa, industry activities  Small scale decentralised community Ministry of Environment  Moderate population fisheries, nickel and oil & gas.  Environmental impacts based water supply systems and Local Governments density  Increasing agricultural from mining and industry sanitation provision production  Provision of water and  Centralised water supply and waste  Developing big-scale and home electricity for economic water treatment in urban areas

Economic Challenge in Economic Characteristics Economic Development Focus ESWIn Leading Agencies Corridor Development downstream industries activities (industry and domestics)  Improvements of supporting  Water supply and sanitation  Rainwater harvesting in rural areas infrastructure: increasing  System of Rice Intensification (SRI) storage capacity, improving for sufficient use of water in paddy road access, increasing fields electricity, water,  Irrigation water reuse telecommunications capacities. Bali – Nusa  Tourism dependent  Gateway for tourism and  Provision of water supply  Ecological sanitation: promote water Ministry of Tourism Tenggara  Some areas are very dry national food supply. for tourism purposes sufficient and prevent water Ministry of Public Works and face water problems  Improving security, marketing  Waste management from pollution Ministry of Agricultures  Small to medium size and promotion, tourism activities  System of Rice Intensification (SRI) Local Governments islands  Increase services & facilities  Tourism facilities including for sufficient use of water in paddy such as water supply and sanitation fields electricity.  High water demand for  Centralised water supply  Improving infrastructure agriculture particularly infrastructure provision through PPP including roads, airport paddy fields especially for tourism (hotels, capacity & services, railways, resorts, etc) and harbours & marinas  Solid waste management  Increasing the production of fishery products as well as salt

Papua –  Significant land area in  Main economic activities i.e.  High water demand for  Small scale decentralised water Ministry of Environment Kepulauan Papua food agriculture, copper, agriculture expansion supply, sanitation and electric power Ministry of Agriculture Maluku  Small islands in Maluku nickel, oil & gas, and fisheries.  Environmental impacts provision in small islands and other Ministry of Public Works  Small populations  Merauke Integrated Food and from mining remote areas Local Governments  Have many natural Energy Estate (MIFEE)  High electric power demand  Finding energy alternatives resources, minerals and development program for mining activities  Law enforcement and incentive mining  Improving supporting  Water supply, sanitation mechanisms to control pollution infrastructure: transportation, and electricity provision in water, electricity. remote areas

d) Integrated Water Resources Management and ESWIn

Indonesia, through the Water Act 7/ 2004, has adopted Integrated Water Resources Management (IWRM), which emphasizes the importance of an integrated approach to managing water resources based on river basin boundaries instead of administrative boundaries. Whilst in terms of institutions, planning and law and compared to other developing countries Indonesia continues to lead in the implementation of IWRM, it still faces a number of challenges in the implementation of the framework.

ESWIn can be an approach or tool to operationalize IWRM and associated River Basin plans by translating the IWRM principles adopted in water sector laws and regulations into planning documents such as RPJMN. Thus ESWIn as an approach should be adopted in some strategic elements within the RPJMN Water Resources Management Breakthrough 2015-2019.

Figure 2. Positioning ESWIn in Indonesia’s water regulations and River Basin plans

B. Development of the ESWIn Roadmap a) The Need for Development of the ESWIn Roadmap

As is evidenced in the MP3EI, Indonesia has in place an ambitious plan based upon the development of key economic corridors. Though these involve specific industries,

there are clear implications for increased demand on ecosystem services, and particularly water.

To date, however, sufficient provision and protection of water resources for food production, urbanization, industrialization, tourism development, agricultural expansion and electricity generation (amongst other demands) requires greater attention.

In addition, in seeking to secure and utilize water resources to support the development of economic corridors as national development policy, there is a need to also look beyond a single-sector approach and also develop multi-institutional relationships.

The Government of Indonesia recognizes a need to enhance water security by embedding the concept of eco-sustainability into national development strategies and plans. To achieve this, BAPPENAS and UNESCAP with support from the Korea International Cooperation Agency (KOICA) has initiated the development of the Strategic Roadmap to support implement Eco-sustainable Water Infrastructure in Indonesia. In so doing the ESWIn Roadmap aims to support the stated goals of accelerated economic growth and the achievement of environmentally sustainable development and the reduction of greenhouse gas emissions. As seen Figure 3, the ESWIn Roadmap is positioned as a supporting strategy to implement the MP3EI.

Figure 3. Positioning the Eco-Sustainable Water Infrastructure in Indonesia’s Policies and Plans

The Roadmap, outlined from page 18, defines the vision, timeframe, and framework for such actions, and supporting activities. The key players to implement the Roadmap are identified in appendix 1.

b) ESWIn—Supporting IWRM Framework

ESWIn can play a role in targeting the operationalization of relevant water regulations. ESWIn as an approach can play a critical role in the Pola dan Rencana (River Basin Planning Documents). For example, implementing ESWIn in Bandung can be one of the effective approaches to realise and compliment the vision of the Citarum IWRM Roadmap (figure 4).

Figure 4. The Citarum IWRM Roadmap (source?)/ESWIn can be one of the effective approaches to achieve the vision of IWRM Plans (e.g. Citarum IWRM Roadmap)

c) Extending ESWIn to Manage the Water-Energy-Food Nexus

A combination of rapid economic growth and shifting consumption and production patterns will intensify demand for food, water and energy to unprecedented levels in Indonesia in coming decades. Many of these challenges are interdependent, and can no longer be managed as separate issues or through segmented sectors. Increasingly there is a need to develop integrated planning modalities and to shift planning systems and institutional relationships towards integrated nexus planning in which ecosystem

services are understood and managed holistically. Figure 5 clearly illustrates a paradigm shift toward the nexus planning.

The nexus of water, food and energy security in a time of climate change has attracted increasing attention. Managing ecosystem services to support rapid economic growth, and the demands of more urban-driven national development, is essential to ensure strong economic performance, social equity, environmental sustainability, and effective governance. Water is critical to this framework, and is increasingly central to food and energy security debates and actions. These demands must be effectively understood and managed.

To address the challenges associated with the food-water-energy nexus, development of eco-sustainable water infrastructure needs to be considered for both the urban and rural context and for the long term. ESWIn can play a crucial role by promoting sustainable growth and poverty reduction through enhancing resource efficiencies and access.

Figure 5. Paradigm shift required to reflect water-energy-food nexus

C. The Proposed ESWIn Roadmap

By 2025, the Roadmap aims to improve human wellbeing for present and future generations through eco-sustainable water infrastructure that will a) optimize the value of water resources, while b) minimizing the impact of development on ecosystems

To achieve this vision, the ESWIn mission is: to enable and develop infrastructure in urban, rural, agricultural, industry and energy sectors that will:

 Improve water, food and energy efficiency;  Reduce wastes and  Achieve clean rivers. a) Objectives and Process of the ESWIn Roadmap

The objectives of the Roadmap are:

1. To define an agreed ESWIn vision for Indonesia and its economic regions; 2. To outline and propose a mechanism to re-align existing planning documents; 3. To coordinate the various activities amongst different sectors related to water resource development to achieve clean rivers; 4. To provide an effective communication process to raise awareness, understanding, and support for the ESWIn approach; and 5. To define and guide the implementation plan and corresponding activities towards the ESWIn vision, including knowledge and capacity building and funding mechanisms.

To achieve these objectives, the Roadmap for ESWIn will be delivered in two phases:

Phase 1: The development of a Strategic ESWIn Roadmap

This document outlines Phase 1. This phase will highlight the critical complementary role of the ESWIn Roadmap in supporting the MP3EI principles. This current phase will have the major objective of raising awareness and engaging key stakeholders. In this Phase, BAPPENAS, as Coordinating Agency for the Roadmap, will implement a

holistic awareness and engagement strategy on the ESWIn Roadmap. This phase will deliver an ESWIn Implementation Plan (Phase 2).

Phase 2: The Implementation of the ESWIn Roadmap

The development of a detailed Implementation Plan of the ESWIn Roadmap will facilitate a commitment from all key stakeholders through an engagement process. Through monitoring and evaluation of the outcomes of the implementation stage, the roadmap can be reviewed and refined over time. b) Roadmap Targets and Timeframe

The timeframe for the implementation of the ESWIn Roadmap (Phase 2) is proposed to be aligned with the third Medium-Term National Development Plan (RPJM), specifically the third RPJM, which includes the period 2015-2019. To ensure this, Phase 1 of the ESWIn Roadmap will be implemented over the period 2013-2014. The overall targets of the Roadmap are specified in the following diagram:

Figure 6. The overall targets of the Roadmap for 2013-2019 c) The ESWIn Roadmap Framework

The strategic framework will be refined and finalized in consultation with a broad

range of key stakeholders and experts to ensure an agreed and integrated approach to the implementation of the roadmap. An overall agreed vision for ESWIn is supported by activities around a number of water-related key sectors, which form the “pillars” of an implementation plan for ESWIn in Indonesia. The vision will be underpinned by a concept of green growth/green economy, consistent with the MP3EI. The aim is to ensure that ESWIn is dovetailed with existing plans.

ESWIn is a holistic strategy based on multiple objectives, scales, sectors and stakeholders within the framework of protecting ecosystem services for human welfare in a participatory manner. ESWIn will ultimately promote sustainable growth and poverty reduction by enhancing resource efficiency in the context of water- energy-food nexus.

Figure 7. Proposed strategic framework for the implementation of the ESWIn Roadmap

d) Enabling components

In order to realize the implementation of the key components of the Roadmap it is essential that it is supported by a prioritization of investment in infrastructure, promotion of eco-efficiency in national development planning, and a fostering of collective capacity and institution building.

In line with its tasks and function, BAPPENAS will lead the initial efforts to develop the implementation plan for ESWIn Roadmap for Indonesia. The role of BAPPENAS

will include, but not be limited to:

 Facilitation of communication and coordination in developing the roadmap  Coordinating and monitoring the implementation stage  Acquiring and sharing of knowledge on innovative mechanisms of implementing ESWIn, encompassing whole-of-water cycle management principles  Scoping financing mechanisms to increase and attract investments for ESWIn

In undertaking this role, BAPPENAS will need to collaborate with other Ministries and institutions especially the Coordinating Ministry for Economic Affairs which will ensure that ESWIn will complement the objectives of the MP3EI and Indonesia’s National Development Plan (both long-term and medium-term) (Table 2).

As the strategy in MP3EI was developed based on economic corridors, local governments will play a key role in the formulation of the roadmap and are key stakeholders in its implementation.

To achieve the objectives of the ESWIn Roadmap, phase 1 will work on the foundation/enabling activities that will include the following (see the table 2):

1. Role sharing (Objectives 2 and 4) a. Planning alignment and mainstreaming b. Development of implementation plan c. Coordination and focal points d. Policy intervention 2. Communication and engagement (Objectives 1, 2, 3 and 4) 3. Capacity building (Objective 4) 4. Knowledge and information management (Objectives 2 and 4) 5. Funding (Objective 4) 6. Assessment of social, economic and cultural dimensions and disaster implications (Objective 4) 7. Monitoring, evaluation, reporting and improvement (Overall)

Table 2. Enabling activities: Institutional Coordination and Planning.

Tentative Institution(s) Roadmap Targets Activities Enabling Activity Performance Indicator Timeframe Lead/Partner ESWIn vision agreed and Establish an Expert Working Communication and Expert Working Group established December BAPPENAS accepted by relevant Group as the focal point engagement 2012 agencies (2013) An effective communication February 2013 BAPPENAS mechanism to facilitate the Expert Working Group Workshops with key sectoral Communication and Workshop to finalize the roadmap August 2013 BAPPENAS representatives engagement document Public consultations with broader September BAPPENAS stakeholders (other institutions and 2013 local government)

Produce communication Knowledge and information Relevant materials distributed to 2013 Expert Working Group materials for relevant agencies management stakeholder agencies Clear communication mechanism to 2013 Expert Working Group facilitate comments from other agencies Plans and policies Scoping of relevant plans Role sharing Plans reviewed and leverage 2014 BAPPENAS and Ministry reviewed, planning mechanisms identified of Public Works(PU) alignment activities and leveraging mechanisms Analysis of policy gaps Role sharing Policy gaps identified 2014 BAPPENAS and PU identified (2014) Identification and formulation Role sharing Leveraging mechanisms agreed 2014 BAPPENAS and PU of leveraging mechanisms among relevant institutions

Tentative Institution(s) Roadmap Targets Activities Enabling Activity Performance Indicator Timeframe Lead/Partner Communication plan Development of Communication and Communication plan developed July 2014 BAPPENAS and PU developed (2014) and communication plan engagement implemented (2014-19) Implementation of Communication and Communication plan implemented 2014 - 2019 BAPPENAS and PU communication plan engagement

Pilot demonstration plan Development of a pilot Capacity building Local ESWIn practices assessed and 2015 BAPPENAS developed and demonstration project documented Implemented (2015- 2017) A pilot project developed based on 2015-17 BAPPENAS local practices and implemented

Implementation Plan Scoping of economic, social and Assessment of economic, Scoping paper on economic, social 2015 BAPPENAS and PU outlining activities for 5 cultural dimensions social and cultural dimensions and cultural dimensions sectors developed and and disaster implications Economic, social, cultural dimensions 2016 BAPPENAS and PU evaluated (2019) incorporated into the implementation plan

Scoping of implications of Assessment of disaster risk Scoping paper on the implications of 2015 BAPPENAS and PU disaster management disasters and disaster management on the ESWIn Plan Disaster management implications 2016 BAPPENAS and PU assessed and incorporated into the implementation plan Scoping of role of ESWIn in Role sharing Scoping paper and case studies 2014 BAPPENAS managing the Water-Energy- showcasing the role of ESWIn in

Tentative Institution(s) Roadmap Targets Activities Enabling Activity Performance Indicator Timeframe Lead/Partner Food nexus managing the water-energy-food nexus Incorporation of the role of ESWIn in 2015 BAPPENAS managing water-energy-food nexus into the implementation plan Development of capacity Capacity building Capacity development gaps and 2015 BAPPENAS and PU building plan requirements identified and the plan agreed among relevant institutions Identifying new technology Knowledge and information New and appropriate technologies 2015 BAPPENAS and PU available for ESWIn management required for the implementation plan identified

Development of an ESWIn Role sharing Implementation plan outlining 2016 BAPPENAS and PU implementation plan activities for 5 sectors developed and evaluated. Identify funding gaps and Funding Funding requirements identified and 2016-2019 BAPPENAS and PU mechanisms funding mechanisms formulated Monitoring, evaluation, Monitoring, evaluation, The MERI Framework developed and 2016-2019 BAPPENAS reporting and improvement reporting and improvement the Plan evaluated (MERI) of the ESWIn implementation plan Incorporate ESWIn into the next Role sharing ESWIn adopted/incorporated into the 2015 BAPPENAS Medium Term National next RPJMN (2015-2019) Development Plan (RPJMN) 2015-2019

a. Align ESWIn with existing Plans

It is both more cost-efficient and effective for ESWIn to be embedded into existing institutional, planning and governance arrangements. The arrangements will need to be supported by a secretariat to administer and facilitate processes, as well as have the responsibility of monitoring and evaluating implementation of the roadmap.

ii. Develop an Agreed Communication Strategy

An effective Communication Strategy aims to: a) articulate, explain and promote the agreed vision for ESWIn and well-defined goals to achieve the vision; and b) creates a consistent unified “voice” that links the diverse activities and goals in a way that appeals to all stakeholders. The ultimate goal of an agreed communication strategy is to facilitate a change in behavior across different stakeholder levels to achieve the outcomes of ESWIn.

It is envisioned that the Communication Strategy will include the following aspects:

 Audience – Who do we want to convince and who can make a difference?  Behaviour – What change in behavior are we aiming for?  Messages – What are the key messages? What will the key actions be?  Channels – What channels will be the most effective ways to communicate?  Evaluation – How will the success of a communication strategy be measured?

iii. Enhance Capacity Building

Implementation of the ESWIn concept in Indonesia will be dependent on commitment of resources - both financial and human.

Capacity building activities need to include targeted and tailor-made trainings, workshops, and consultations (both institutional and individual levels) on:

a. Policy development and refinement to incorporate ESWIn b. Technical designs for ESWIn both in rural and urban contexts c. Engagement mechanisms to increase awareness, advocacy and facilitate behavior change in relation to ESWIn (including relationship building, interpersonal communication, listening, responding, negotiation, relationship

building) d. Monitoring and Evaluation of ESWIn including effective synthesis, communication of results and feedback mechanisms to the Roadmap e. Government liaison to deal with interactions across and within government agencies, including PPP mechanisms and other leveraging mechanisms

Development of a pilot demonstration project is also suggested as part of capacity building activities as it can serve as an effective learning tool for targeted groups.

iv. Knowledge and Information Management

The enabling environments for ESWIn include a) promoting collective capacity / institutional building to enhance the collective productivity; and b) acquiring advanced knowledge including on green technologies to improve productivity as well as to cope with the complexity and uncertainty of modern large scale infrastructure development.

Some of the key actions that will need to be taken will include:

 Identify and scope key knowledge gaps to implement ESWIn in Indonesia and the different economic regions;  Explore local knowledge and water management systems and processes;  Enhance local knowledge and technologies where appropriate by actively importing knowledge and technologies from other countries through diverse measures such as subsidies and financial support (based on gap analysis);  Create institutional mechanisms that facilitate public-private cooperation on improvement of knowledge and technology development; and  Ensure a transparent and accessible knowledge management system to document knowledge

v. Develop Prioritized Infrastructure Plan and Financing for each Economic Region

A Prioritized Infrastructure Plan (PIP) is a long-term corridor-wide plan for the

implementation of ESWIn that integrates with the broader Infrastructure Plan that underpins Indonesia’s Master Plan.

The PIP outlines the ESWIn that the six economic regions will need across networks relevant to water such as:

a. Transport Network (specifically for water) b. Stormwater Network c. Water Supply Network (for industry and households) d. Sewerage Network (for industry and households)

A Priority Infrastructure Plan for ESWIn will include the following components:

 Rationale of ESWIn for the economic region  Targets: Basic requirements of drinking water supply and wastewater management (short-term), as well as addressing flooding, waterway health restoration, climate change infrastructure (long-term)  Opportunities for Green Infrastructure development  Planning assumptions, linkages and dependencies  Priority infrastructure area and infrastructure plan maps  Desired standard of service and maintenance  Work plan schedule for ESWIn development  Estimated Budget and Financing Options (including how to increase investment in infrastructure; how to attract investment from private sector).

vi. Develop a Monitoring, Evaluation, Reporting and Improvement (MERI) Evaluation Framework

A MERI framework for the implementation of ESWIn provides the basis for a) assessing the extent to which the outcomes of the ESWIn Roadmap will have achieved at the different levels of the outcomes hierarchy; and b) the extent to which the ESWIn Roadmap will make a contribution towards the longer-term outcomes and aspirational goal. Having this framework helps to focus on questions that have real

value for all stakeholders.

The MERI Framework needs to address 5 evaluation categories in relation to the ESWIn Roadmap:

a. Impact – In what ways and to what extent has the Plan contributed to changing asset conditions and management practices and institutions? – What, if any, unanticipated positive or negative changes or other outcomes have resulted? – To what extent were the changes directly or indirectly produced by the program interventions? b. Appropriateness – To what extent is the Plan aligned with the vision of Indonesia’s Master Plan and other related plans? – To what extent is the programme compliant with recognized best practice processes in the field—e.g. the type, level and context of investment and associated activities? – How time critical is the programme? c. Effectiveness – To what extent have the planned activities and outputs been achieved? – Are current activities the best way to maximize impact or are there other strategies that might be more effective? – To what extent is the Plan attaining, or expected to attain, its objectives efficiently and in a way that is sustainable? d. Efficiency – To what extent has the Plan attained the highest value out of available resources? – How could resources be used more productively and efficiently? – What could be done differently to improve implementation, and thereby maximize impact, at an acceptable and sustainable cost? e. Legacy

– Will the programme’s impacts continue over time? – How and by whom should the legacy be managed?

D. Promotional Strategies

The concept of eco-sustainability is very new for Indonesian audiences. Most approaches, including eco-efficient approach for water infrastructure, require different perspectives, mindsets, and disciplines as well as awareness, expertise and capacity building to develop strategy, planning design and implementation. Therefore the implementation of ESWIn in Indonesia requires promotional strategies that will enable understanding and acceptance of the concept amongst stakeholders.

Objectives of Promotional Strategies

The promotional strategies to support the implementation of the ESWIn Roadmap will have two critical objectives:

 Communicate and introduce the concept of Eco-Sustainable Water Infrastructure to key stakeholders and a broader audience

 Encourage ownership and develop a strong commitment to implement ESWIn and achieve the vision of the Roadmap.

Target Audience

An effective promotional strategy needs to consider the diversity of stakeholders, with their own background, interests, roles and initial perceptions regarding ESWIn, and its critical role to achieve green economic growth and sustainable development. Stakeholder mapping and analysis can provide an understanding of the diversity of stakeholders and can result in more effective promotional strategies.

An initial list of audience will include, but not limited to (Figure 1):

1. Key stakeholders. Acceptance and strong support from key stakeholders to the ESWIn concept is extremely important in the successful implementation of

the Roadmap. As such, key stakeholders need to be prioritized and treated as a first target for communicating the concept. Key stakeholders will include the following: a. Policy Makers and Implementers. This group includes all line Ministries such as those within the Central Government levels such as Ministry of National Development Planning (BAPPENAS) and Coordinating Ministry for Economic Affairs, the technical Ministries who will adopt the approach into their sectoral planning schemes and local governments who will play a critical role in implementation. b. Research and Academics. This group will include researchers, scientists and academics that will ensure open, transparent and robust debates and discussions on the concept. c. Concerned Groups (Non-government Organisations (NGOs) or other Civil Society Organisations (CSOs)). These groups have strong interest and concern to environment particularly in the area of water management. These groups are usually very aware and supportive of the concept of sustainable development. As such, this group needs to be equipped with the right messages so they can in turn, promote the concept to the broader community. 2. Public in general. Public opinion is very important, especially for new concepts to be accepted, adopted and implemented. The role of the media is also important for the development and communication of concepts and ideas.

Strategies and Approach

Some strategies identified during an expert group workshop on ESWIn held in November 2012 included the following:

 Develop the media strategy including website, TV programme and newspaper and other locally adopted media, as a mechanism for awareness raising, capacity building, knowledge sharing. Media campaigns aim at creating positive images, triggering feedbacks from related groups with the same

concern, and generating impacts so that more people know and are aware of both the eco efficient approach and its implementation.  Facilitate partnerships and networking in the region through sharing knowledge, experiences, technologies and lessons learnt.  Conduct capacity building of the stakeholders.

Specific recommendations for the promotion of the content included the following:

 Message needs to be simple and clear. The content of the message to promote eco-sustainable concept should be simple but not too simplistic.  Visualisation is important. Using many image drawing, icons and animations will easily grab attention. The message will be also easier to digest and remember particularly for general public  No one method fits all. All flow of information and content should custom- designed to meet the expectations of targeted audience  Debate and discussion need to be encouraged. The promotions should accommodate any debate and be open for discussion  Resources should be readily available. Make many resources on ESWIn available and accessible  Convene a think tank or expert working group. It will be useful to have a discussion group which also could act as a think tank and champion for the new concept

Linking ESWIn to (Integrated Water Resources Management) IWRM Promotional Strategies

IWRM is a process which promotes the coordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems (GWP, 2000). Such a definition implies that IWRM puts an emphasis on the harmony between economy, society and the environment in terms of water management, considering not only water resources but also land and other related resources. IWRM promotes the maximization of the economic, social and

environmental benefits. As such, IWRM concepts are consistent and embrace the vision of ESWIn.

IWRM received national policy recognition in 2008, with the establishment of the multi-stakeholder National Water Resources Council. In promoting a coherent, integral, sustainable and open approach to water resources management, the Indonesian Law 7/2004 on Water Resources is gives the option for community, businesses, and nongovernment organizations to participate in the process of planning and implementing the integrated water resources management.

In a meeting held in August 2013 in Bali, Indonesia, it was agreed that promotional strategies for ESWIn be linked to the promotional strategies of IWRM. ESWIn can be promoted as one of the effective ways by which IWRM can be implemented in Indonesia, as it supports the major pillars of IWRM (ex. Citarum IWRM Roadmap – See Figure 2).

ESWIn should be positioned to support other frameworks and key development goals. ESWIn should not be duplicative. ESWIn can strengthen IWRM, but it can move further by revitalizing the framework. As such, it can be a value-add to IWRM. Through the IWRM framework, ESWIn can assist to address issues including cross- sectoral division, responsibilities, geographical and political boundaries. It will be easier to leverage existing IWRM networks and champions to promote ESWIn.

III. Appendix

Appendix 1: Key Stakeholders for ESWIn Roadmap

The ESWIn Roadmap is targeted for decision makers. The success of the implementation of ESWIn will need the involvement of key stakeholders, and the consideration of the specific needs of the different economic regions. Institutions involved in formulating policies, developing plans and monitoring and coordination need to be involved. Key stakeholders will include:

a) Ministry of National Development Planning (BAPPENAS)

BAPPENAS is responsible for planning and coordination at the national level. BAPPENAS, specifically the Directorate of Water and Irrigation, initiated the pursuit of the eco-sufficient infrastructure concept in the water sector. This concept has been adopted into the National Medium-Term Action Plan framework (RPJMN). BAPPENAS plays a critical role in the development of the ESWIn Roadmap and its subsequent implementation.

b) Coordinating Ministry for Economic Affairs

In collaboration with BAPPENAS, the Coordinating Ministry for Economic Affairs formulated the MP3EI. This institution plays a strategic role particularly in the coordination of the implementation stage of the Master Plan by the various ministries related to economic affairs.

c) Ministry of Public Works

Ministry of Public Works consists of 3 main units (Directorate General): Water Resources, Highway Construction and Maintenance (Bina Marga), and Human Settlements (Cipta Karya). The Water Resources and Human Settlements directorates relate closely to water. The Water Resources Directorate is responsible in managing water resources in general, including the maintenance of the source of water and the provision of bulk water supply. The Human Settlements Directorate focuses more on

the delivery of water to settlements and industries. The commitment from these two directorates is critical for the implementation of the eco-sufficient water infrastructure. d) Ministry of Environment

The Ministry of Environment’s main functions are to formulate national environment policies and assess environment impacts of all development activities. This institution sets up and regulates parameter standard to ensure environmental sustainability across Indonesia. Its contribution to the adoption of ESWIn is very crucial. e) Ministry of Agriculture

Agriculture sector is closely related to the water sector. Many agriculture activities pollute waterways, and at the same time the productivity of irrigated agricultures rely on the availability of water. New agriculture methodologies and technologies are needed to promote eco-sufficient practices. The Ministry of Agriculture’s vision is towards a sustainable and eminent agricultural industry based on local resources to improve food security, value added, competitiveness, export, and farmers’ welfare. ESWIn can play a critical role in achieving this vision. f) Ministry of Industry

The long-term vision for industrial development is to make Indonesia as one of the leading industrialized countries in the world by 2025. As a consequence, the Ministry of Industry plays a crucial role for the country to achieve this vision. It is important to strengthen the industry sector to boost economic growth. However, it has to be acknowledged that rapid industrialization needs to consider green growth to ensure sustainability of water resources and the environment. Together, with domestic wastes, industrial wastes pose major threats to the waterways. Changes in industrial policy will enable the implementation of ESWIn. g) Ministry of Energy and Mineral Resources

Mining activities draw on water resources and contribute to the pollution of waterways. The Ministry of Energy and Mineral Resources deals with policies and

regulations for mining. The Ministry also has to ensure the provision of energy such as electricity, petrol, and gas. This Ministry is crucial in the promotion of ESWIn in managing the energy-water nexus. h) Ministry of Forestry

The availability and quality of water is dependent on the extent and condition of forests and especially watershed. The Ministry of Forestry is critical in the achievement of Indonesia’s Green Growth Plan and in the advocacy and promotion of the ESWIn concept. i) Ministry of Health

The Ministry of Health is responsible for public health in Indonesia. Poor quality of water and sanitation impacts on the health of the community. Awareness of proper sanitation practices is critical and this role is played by the Ministry of Health. Some ESWIn technologies can foster effective sanitation practices. The Ministry of Health is crucial in the promotion of such technologies in support of the ESWIn concept. j) Ministry of Home Affairs

Most of public administration and service provision to communities have been decentralized to local government. The involvement of Ministry of Home Affairs is important in the implementation of ESWIn. The Ministry will facilitate communication, coordination, and monitoring policies and activities of local government and at the same time building their capacities to implement ESWIn. k) Local governments

Local government activities will need to reflect and take ownership and responsibility for the strategy, especially given the important roles devolved to local governments through decentralization. Local governments, though, need to have the capacity and planning scope to accelerate economic growth through ESWIn. Commitment from local leaders, like the Mayor at district level and the Governor at the province level, are very important. They can influence the policies in the region, as well as allocate

resources from local government budget (APBD) for implementing ESWIn. l) Private Industries

The involvement of industry and corporate is as important as government institutions. Government cannot implement the eco-sufficient roadmap without consultation with industry. Financial, as well as intellectual resources can be provided by private industries. m) Environmental NGOs

Environmental NGOs can advocate and influence policies at the national as well as local level. NGOs can also help the government to monitor impacts of accelerated development on the environment.

Appendix II. The Six Economic Corridors

Sumatra Economic Corridor

The development of Sumatra Economic Corridor (SEC) will be focused on as the center for production and processing of natural resources and the nation’s energy reserves. The SEC consists of 11 economic centers of which 10 are located in Sumatera Island and one in Java Island. Its main economic activities are palm oil, rubber, and coal. Shipping has become another main activity for this economic corridor. The construction of Sunda Straits Bridge will likely facilitate steel production, which is produced in Banten, to boost economic growth.

In creating the environment for palm oil to become an economic driver in the Sumatra corridor, the formulation of policy intervention is necessary to ensure spatial certainty for upstream industries such as palm oil processing plants. This strategy can increase added value of palm oil production in general. In addition, the government also wants to increase palm oil production in the region. However, due to environmental considerations, intensification to increase production yields is much preferable than expansion of plantation areas. Improvement of transport services and facilities needs to be introduced to reduce travel time to maintain the quality of the product. Research and development will play important role to produce superior palm oil seedlings, as well as improve production and management quality.

High demand of rubber from fast growing automotive industries creates opportunity for natural rubber producers. To address this, an intervention that combines regulation and policy, infrastructure and technology development is being proposed. To address handling and transport of the resource, the development will focus on increasing port capacity, providing sufficient power to support rubber industry, and strengthening inland handling management networks.

Coal is an important commodity for Sumatra economic corridor, which has very large coal reserves. However, existing production is deemed very low. Regulation and policy changes will be adopted to enable coal mining to grow as one of main economic activities in the corridor. Such changes include export policy, price

regulation, product standardization, and controlling illegal mining. For connectivity issues, a railway is considered as the most suitable and sufficient way to transport coal from inland mining to the port. As a consequence, port capacities particularly in South Sumatra and Lampung have to be upgraded.

Iron ore industry offers a great prospect to be explored in Sumatera economic corridor. The MP3EI recommends an upstream manufacturing processing plant for iron ore concentrate to be built near the mining areas and downstream manufacturing industries to increase employment. In line with this plan, provision of supporting infrastructures such as electricity, road networks, railways, ports and waste management will be taken into account.

The transport of commodities is an urgent issue in the development of the proposed economic corridor in Sumatra. Strategies to increase port capacity and improve shipping industries are required. Interventions both for increasing production of commodities, as well as development of supporting facilities need to be undertaken in parallel and complement each other, with consideration given to the region’s natural resources which will be used to underpin these economic growth and development policies and priorities.

Java Economic Corridor

The Java Economic Corridor consists of five economic centers of growth: Jakarta, Bandung, Semarang, Yogyakarta, and Surabaya, and dominates economic activities in Indonesia. The major economic activities within the corridor are shifting from manufacturing-based to services-based economy. Java economic corridor will be the driver for national industry and service provision. The main economic activities in the economic corridor are food and beverage, textile, transportation equipment, shipping, ICT, defense equipment, and growth in the greater Jakarta area.

The food and beverage industry contributes to the total GDP of Indonesia significantly. This industry is the second largest manufacturing industry in the Java Economic Region, after the machinery industry and ranks the highest for the amount of domestic investments in 2010. Although this sector has grown in recent years, there are still

challenges in terms of infrastructure, human resources, and regulations for this industry.

The MP3EI recognizes the necessity to have a specific strategy to accelerate textile industry growth. The industry holds the highest level of formal employment in Indonesia, employing more than 1.3 million people. Some regulations and policies will be introduced to enable industry to grow at optimum level.

The textile industry needs supporting infrastructure. Hence the MP3EI recommends increasing electricity supply and the feasibility of electricity prices; increasing time efficiency of transport through main ports in Jakarta, Semarang and Surabaya; and decreasing transport costs particularly terminal handling charge. Further it also gives an attention to the development of human resources and introducing innovative technology in the industry.

As a consequence of fast growing industries, there is a need for increased and reliable electricity supply to avoid periodic blackouts, which can also reduce the high production cost. Supporting infrastructure will require the development and concentration at provision of electricity; provision of clean water treatment plants and wastewater treatment facilities.

Within the Java economic corridor lies the greater Jakarta area, Jabodetabek. It covers three provinces (namely DKI Jakarta, Banten and West Java), and approximately 60 percent of national import-export activities and more than 85 percent of nation’s financial services take place in this area. The MP3EI plans to expand the industrial area to the east of Jakarta, including developing smart community. The other plans to accommodate accelerated economic grows include:

 Building a new port at Cimalaya and developing both Soekarno Hatta airport and the Port of Tanjung Priok  Developing a network of mass transportation  Building a circular railway line for monorail train  Improving roads and logistic network  Reforming flood control system

 Reforming the system of solid and liquid waste disposal from residential areas and industrial areas  Developing new sources of clean water supply

Kalimantan Economic Corridor

Under the plan, the Kalimantan Economic Corridor (KEC) will be developed as the center for production and processing of national mining and energy reserves. The KEC consists of 4 economic centers: Pontianak, Palangkaraya, Banjarmasin, and Samarinda. The main economic commodities in the corridor are oil and gas, coal, palm oil, steel, bauxite and timber. Overall they can be classified into two different groups: mineral-based commodities and natural-based resources. In general MP3EI underlines 3 types of interventions: regulation and policy; provide supporting infrastructures; and development of human resources, science and technology.

The development of supporting infrastructures is needed to enable the main economic activities in Kalimantan economic corridor to grow at optimum level. The strategies for this particular economic corridor include:

 improving the quality of infrastructures for distribution and logistics;  Improving transportation network of coal from mining to ports either using train via railway or utilize river transport;  Increasing the capacity of (river and sea) ports and harbors;  Increasing electricity generating capacity to support mining activities; and  Improving infrastructure networks in general including access road to plantations, mining areas, processing plants, ports and harbors

Sulawesi Economic Corridor

Sulawesi Economic Corridor relies on various main economic activities such as agricultural sectors (rice, corn, soybean, and cassava), cocoa, fisheries, nickel and oil and gas. All those activities will be concentrated in 6 economic centers: Makassar, Palu, Kendari, Gorontalo, Mamuju and Manado. This corridor will be developed as a center for production and processing of national agricultural, plantation, fisheries, oil

and gas, and mining.

To accelerate economic growth in the agriculture sector, planting areas will be expanded by utilizing existing land. Measures to improve supporting infrastructure include activities to improve access roads; improve overall irrigation facilities; and revitalize and improve the capacity of existing warehouse and rice storage. In addition, development of appropriate agriculture technologies will also be strengthened.

To increase production and improve the quality of cocoa, various interventions are introduced. Some of them will have significant impacts to the environment, such as the idea for developing big-scale and home downstream industries and conversion of areas for the development of cocoa plantations and its processing industry. Some improvements of supporting infrastructures also have been identified, and these include increasing the capacity of infrastructure and (electricity, water, telecommunications).

Bali – Nusa Tenggara Economic Corridor

Bali and Nusa Tenggara Economic Corridor is designed to be a gateway for tourism and national food support. It has 4 economic centers: Denpasar, Lombok, Kupang and Mataram, with 3 main economic activities: tourism, fisheries, and animal husbandry.

This economic corridor is a world tourism destination. Some strategies have been formulated to support economic activities in tourism sector, including improving security, marketing and promotion, and increase services and facilities such as water supply and electricity. Increased electricity demand requires the construction of a new power plant. At the same time, increased water demand will require new investment in water treatment plants. Moreover, the tourism sector also needs to be supported by sufficient and proper infrastructures including roads, airport capacity and services, railways, harbors and marinas.

Development of fisheries in Bali and Nusa Tenggara economic corridor will be focused on increasing the production of fishery products as well as the production of salt particularly to meet domestic demand. This plan requires improvement of roads,

sufficient local port capacity, sufficient energy supply, and airport services etc. The availability of water supply needs to be ensured.

In line with previous plan, the strategy in animal husbandry recommends improvement in access roads, local ports capacity, airport services, new power plants, and provision of clean water supply.

Papua – Kepulauan Maluku Economic Corridor

Papua and Kepulauan Maluku Economic Corridor is known as a center for development of food, fisheries, energy, and national mining. The development of corridor has 7 economic centers: Sofifi, Ambon, Sorong, Manokwari, Timika, Jayapura, and Merauke, and will be focused on 5 main economic activities i.e. food agriculture, copper, nickel, oil and gas, and fisheries.

The huge area of land in Papua creates opportunity for many economic activities, especially agriculture. Hence the government has introduced the Merauke Integrated Food and Energy Estate (MIFEE) development program. This program will promote the gradual development of food estate land; accelerate the process of releasing designated forestland into food estates areas; and local community engagement. The proposed infrastructure developments to support this plan include the development of:

 Water resources infrastructure and swamp reclamation;  Services and collection-distribution centers for agricultural products;  Several sea ports and some docks along river;  Roads and bridges to improve connectivity routes;  Organic Fertilizer Plant as well as development of Ammonia Urea industry; and  Biomass-based electricity

The strategy to accelerate economic activities in mining sectors uses similar approach for almost all mineral based commodities (copper, nickel, oil and gas). It promotes the development of processing factories. Consequently, it needs to ensure sufficient supply of power especially for remote scattered exploration areas. Pursuing this

further, the MP3EI recommends green energy facilities, for example non-diesel and hydroelectric power plants. In order to improve connectivity and handling for commodities transport, it proposes to develop port facilities as well as increase cargo capacity. In addition to this, the development of access roads, waste treatment plants, water systems, and drainage are also considered important.