PHOTO BY YAYASAN KEHATI FOR USAID INDONESIA STRATEGIC ASSESSMENT FINAL REPORT February 2020 IDIQ No. AID-OAA-I-13-000044/Task Order No. 72049720F00001 DISCLAIMER: This report is made possible by the support of the American people through the United States Agency for International Development (USAID). The view expressed in this document are the authors’ and do not necessarily reflect the view of the United States Agency for International Development or the United States Government. This publication was produced for review by the United States Agency for International Development. It was prepared by Democracy International, Inc. under IDIQ No. AID-OAA-I-13-000044/Task Order No. 72049720F00001. TABLE OF CONTENTS EXECUTIVE SUMMARY 1 OVERVIEW OF THE ASSESSMENT 7 WHY FOCUS ON CONFLICT? 7 OBJECTIVES AND METHODOLOGY 8 INDONESIA: OVERVIEW 9 CONTEXT: SOCIAL DYNAMICS 10 RELIGION 10 VIOLENT EXTREMISM 11 RELIGIOUS CONFLICT AND COMMUNITY RESILIENCE 12 GENDER 13 GENDER-BASED VIOLENCE 14 GENDER AND VIOLENT EXTREMISM 15 GENDER, CONFLICT, AND PEACEBUILDING 16 LGBTI ISSUES 17 MIGRATION 18 LABOR DEMOGRAPHIC CHANGES 19 POLITICAL ECONOMIC DYNAMICS 20 ECONOMIC OVERVIEW 20 ECONOMIC INEQUALITY 21 ECONOMIC DIMENSIONS OF CONFLICT 22 INFRASTRUCTURE 22 POLITICAL OVERVIEW 23 DECENTRALIZATION 24 CORRUPTION 25 LAND AND NATURAL RESOURCES 26 INFORMATION AND COMMUNICATIONS TECHNOLOGIES 27 KEY CONFLICT DYNAMICS 28 OVERVIEW OF CONFLICT IN INDONESIA: LEGACIES AND RISKS 28 CONFLICT MITIGATING FACTORS 30 CONFLICT PREVALENCE AND OVERLAPPING AUTHORITY 31 KEY CONCLUSIONS FOR SECTORAL DEVELOPMENT 32 ENERGY AND ENVIRONMENT 32 HEALTH 33 HUMAN CAPACITY 33 FOCUS PROVINCES 34 EAST NUSA TENGGARA 34 PAPUA 38 EAST JAVA 42 SOUTH SULAWESI 44 EAST KALIMANTAN 46 LOOKING AHEAD: CONFLICT TRAJECTORIES 49 RECOMMENDATIONS 49 STRATEGIC RECOMMENDATIONS 49 ACKNOWLEDGMENTS The strategic assessment team would like to express their sincere appreciation to the many individuals who provided support and input to the strategic assessment process. Officers and Specialists at the United States Agency for International Development (USAID) in Indonesia, particularly Mispan Indarjo and Anders Mantius, provided vital insight, feedback, and assistance. USAID/Indonesia Mission personnel, including staff from the Program, Democratic Resilience and Governance, Health, Environment, and Economic Growth teams, took time out of their busy schedules to provide suggestions and share their knowledge of the Indonesian country context and USAID programming. The assessment team was composed of Leslie Dwyer of Democracy International, who served as the team lead; Ioli Filmeridis, who represented USAID’s Office of Conflict Management and Mitigation; and conflict specialists Sri Lestari Wahyuningroem and Made Supriatma. The team was supported in the field by two logisticians, Yosef Riadi and Isniati Kuswini, who went above and beyond to ensure that the assessment proceeded smoothly. Finally, the assessment team would like to express its gratitude to all the key respondents and interview participants who gave their time and shared their knowledge and experiences. Their candid and thoughtful responses were crucial to the success of the assessment. Given the sensitivity of the material that was discussed during interviews and focus group discussions, the report uses non-specific attribution for interview citations, unless a quote appears in a public source. LIST OF ACRONYMS CAF Conflict Assessment Framework CAG Conflict Advisory Group C-AME Complexity-Aware Monitoring and Evaluation CDCS Country Development Cooperation Strategy CLA Collaborating, Learning, and Adapting CS Conflict sensitive CSAid Conflict Sensitive Aid CSO Civil society organization CVE Countering violent extremism DO Development Objective DRG Democratic Resilience and Governance FKUB Religious Harmony Forum GBV Gender-based violence GoI Government of Indonesia GPI Global Peace Index HDI Human Development Index IP Implementing partner IPAC Institute for Policy Analysis of Conflict IPV Intimate partner violence ITE Electronic Information and Transactions JAK Jemaah Ansharut Khilafah JAD Jamaah Ansharut Daulah KLHK Ministry of Forestry and Environment KNPB National Committee of West Papua KPA Consortium for Agrarian Reform KPK Corruption Eradication Commission LFPR Labor force participation rate LGBTI Lesbian, gay, bisexual, transgender, intersex MEL Monitoring, Evaluation, Learning NGO Non-governmental organization NTT East Nusa Tenggara (Nusa Tenggara Timur) PAD Project Appraisal Document RAN P3A-KS National Action Plan for the Protection and Empowerment of Women and Children during Social Conflicts RFP/A Request for Proposals/Applications SAF Special Autonomy Fund TEC Technical Evaluation Committee USAID United States Agency for International Development USAID/CMM USAID/Office of Conflict Management and Mitigation VAWG Violence against women and girls VE Violent extremism VEO Violent extremist organization EXECUTIVE SUMMARY ASSESSMENT OVERVIEW The Indonesia Strategic Assessment was conducted from December 2019 to February 2020, with fieldwork taking place in January 2020. The purpose of the strategic assessment was to: 1) help the United States Agency for International Development (USAID)/Indonesia better understand the Indonesian context and its impact on the Mission’s ability to achieve key programmatic results; 2) inform the design of USAID/Indonesia’s new Country Development Cooperation Strategy (CDCS); and 3) recommend programmatic approaches to address key findings. The assessment used the Conflict Assessment Framework (CAF) 2.0 from USAID’s Office of Conflict Management and Mitigation (CMM) as its methodology.1 The CAF 2.0 framework assisted the assessment team with gathering information on current and potential conflict dynamics in Indonesia, how conflict may impact USAID’s ability to achieve key programmatic results, and how USAID may address drivers of conflict in its future programming. The team consulted with national-level experts before conducting fieldwork in five provinces identified by USAID/Indonesia as potential priorities under its new CDCS: East Java, East Nusa Tenggara, East Kalimantan, South Sulawesi, and Papua. Throughout the assessment, the team paid attention to how USAID can support Indonesia on its journey to self-reliance. The scope of work for the Indonesia Strategic Assessment included a request for attention to a series of key issues in the target provinces: • Through a political economy analysis, identify the key/most salient political, economic, and cultural contextual factors in each target geography that could positively or negatively affect USAID activities and how USAID interventions could exacerbate or alleviate existing issues. • Due to the importance of decentralization for Indonesia’s political economy, identify current and potential economic winners and losers and associated incentives and disincentives for corruption as well as transparency and good governance. In addition, identify how the aforementioned impact USAID potential development activities and engagement with political actors and beneficiaries. • Due to the importance of inclusive economic growth, in particular on the communities of Indonesia, analyze the impact (politically, culturally, and economically) of labor demographic changes, migration flows (including transmigration) in target areas, and infrastructure investments in specific geographies. • In Papua, identify the role of autonomy and how the use of the Special Autonomy Fund (SAF) impacts development initiatives and investments, community perceptions, and local economics. If special autonomy/the SAF ends as planned, what impact will the loss of these funds indicate for the future of this sensitive autonomous region? During fieldwork, the assessment team consulted with a range of key respondents and stakeholders, including: government officials at the national and local levels; civil society organizations (CSOs) and non- governmental organizations (NGOs); academic experts; researchers; religious and traditional leaders; political party representatives; USAID implementing partners (IPs); businesspeople; farmers; fishers; women’s groups; youth; conflict resolution practitioners; and people impacted by conflict. The assessment did not evaluate specific USAID/Indonesia projects or activities, but instead focused on 1 USAID, 2012. “Conflict Assessment Framework, Version 2.0.” https://pdf.usaid.gov/pdf_docs/pnady739.pdf 1 | INDONESIA STRATEGIC ASSESSMENT generating data that could be used to plan and prioritize future development efforts. The assessment report draws upon its findings to provide recommendations for USAID/Indonesia to consider as it works to develop its new CDCS. These recommendations focus on the integration of conflict mitigation and conflict sensitivity into USAID’s development efforts, as well as opportunities at the national and sub-national levels for strengthening governance and mitigating citizens’ grievances to prevent conflict. KEY FINDINGS Indonesia has been widely celebrated both for its successful post-1998 transition to democracy and its ability to maintain national unity given its tremendous ethnic, cultural, and religious diversity. It has no external armed conflicts, and ranks 40th out of 149 countries on the Global Peace Index (GPI), earning a score slightly below the Asia-Pacific average.2 The country does, however, face multiple, overlapping forms of conflict, including political conflicts, religious conflicts, and conflicts over land and natural resources.