Star Report: Indonesia Compact | August 2019

Coordination and Partnerships

The compact was situated in an already crowded field of donor assistance in Indonesia. Therefore, it was important to select sectors with demonstration effects for the GOI, allowing them to use the MCC model to approach development challenges in new ways and to design projects that were scalable. In doing so, MCC and the GOI had opportunities to work with other development partners to build upon their knowledge and expertise, particularly in the Nutrition Project, which worked with UNICEF, the World Bank, and Australia’s Department of Foreign Affairs and Trade (DFAT) through a multi-donor funding mechanism which supported the GOI-implemented Generasi Project.

  • Eleven major industry players in sustainable cocoa active in Indonesia, including multinational companies such Cargill, Mars, Mondalez, Nestle, Olam and others, co-financed projects and partnerships with cocoa producers that will continue after the end of the compact.
  • The World Wildlife Fund (WWF) Rimba Corridor Green Growth Demonstration Project matched MCC’s $5 million to co-finance a $10 million demonstration project designed to identify and demonstrate green development opportunities in three geographic areas of a high conservation corridor in Sumatra. This partnership targeted the coffee sector and prioritized identifying and supporting development of direct partnerships in the coffee supply chain.
  • The Norwegian and Dutch governments, along with a local service provider, contributed $3.2 million in co-financing to scale up and expand installation and leasing of solar photovoltaic systems in households, schools, and kiosks. Projects supported the development of Renewable Energy Service Centers to address sustainability. These partnerships were expected to continue after the end of the compact. 39
  • MCC collaborated with Musim Mas and the International Finance Corporation (IFC) to train 4,700 smallholder palm oil farmers in improved production practices and preparation for eventual sustainability certification. MCC provided $2.6 million in grant funding that leveraged an additional $1.9 million from Musim Mas. This project was part of a larger $10 million IFC effort to support independent palm oil smallholders in Jambi, Riau and North Sumatra provinces focusing on sustainability certification, environmental protection, access to finance, and traceability.

Partnership grants within the GPF were structured to ensure that partners continue the work with their own funding beyond the compact term. Similarly, on-grid renewable energy projects were structured with private finance provided by project sponsors to be used after the compact end to move projects to their commercial operations date. Overall, the GPF leveraged an estimated $35 million of private sector funding.

A major success was signing and implementing memorandums of understanding and agreement with MOWECP and IWAPI for promoting women’s economic empowerment approaches and lessons within government, and private sector planning and programs, respectively. IWAPI organized events with buyers and corporations for women entrepreneurs, helping them access national and global markets for selling their products. IWAPI also supported women vendors training and uploaded all training materials on their website to support the continuous online training of women vendors.

Footnotes
  • 1. Riskesdas 2007 (Riset Kesehatan Dasar – Basic Health Survey). Over one third of children under 5 in Indonesia remained stunted during the 2013 round of the Riskesdas survey, the year that the MCC compact with Indonesia entered into force.
  • 2. Olken, Benjamin A.; Onishi, Junko; Wong, Susan. 2011. Indonesia’s PNPM Generasi Program: final impact evaluation report (English). Washington, DC: World Bank.
  • 3. The Comprehensive Partnership established a formal framework for enhanced bilateral cooperation in several areas. Details at: https://obamawhitehouse.archives.gov/the-press-office/2010/11/09/joint-declaration-comprehensive-partnership-between-united-states-americ . Viewed October 24, 2018.
  • 4. Asian Development Bank (2010), Country Diagnostic Studies, Indonesia: Critical Development Constraints. See page 86, Summary, for a statement of the three identified critical constraints to inclusive economic growth.
  • 5. Asian Development Bank (2010), Country Diagnostic Studies, Indonesia: Critical Development Constraints.
  • 6. http://www.mca-indonesia.go.id/assets/uploads/pubs/PanduanTeknis%20PPB%20Des%20MCA-Indonesia%20Final.pdf . Viewed October 24, 2018.
  • 7. For further detail on the evolution of the GPF Activity, please see the Green Prosperity Facility Evaluation referenced and linked below in this report.
  • 8. The matchmaking process has been somewhat successful. Several letters of agreement were signed and other “process” milestones reached. But, the GOI unit tasked with monitoring these outcomes has not yet delivered any satisfactory reporting covering this information.
  • 9. MCC’s standard practice is to have compacts ratified or approved by the partner country’s legislature.
  • 10. See the MCC Learning section for details about what lessons MCC took from implementing the GPF and how the agency is actively applying them to current and future facilities.
  • 11. FAO’s Data Portrait of Smallholders. http://www.fao.org/family-farming/data-sources/dataportrait/farm-size/en/
  • 12. This refers to the CocoaTrace technology / app which is now being used for Palm Oil as well. Learn more here: https://koltiva.com/#aboutus
  • 13. MCC is waiting for information from the Government of Indonesia to verify this statement.
  • 14. FAO, “Small Family Farms Country Factsheet – Indonesia,” http://www.fao.org/3/i8881en/I8881EN.pdf.
  • 15. It is important to note that because the GP Project funded 66 grants under the GPF Activity, it was not possible to verify the data above in the same way that MCC normally does for a project. The data above were reported by grantees/implementers, which is standard; but the standard of evidence for accepting their reports was lower than for normal MCC projects because it was not possible to closely monitor activities of each grantee.
  • 16. MCC is waiting for information from the Government of Indonesia to verify this statement.
  • 17. POME investments also covered under the renewable energy portfolio section.
  • 18. Brief summaries of the grants can be found at: http://www.mca-indonesia.go.id/en/project/green-prosperity/grant/green-knowledge-grant. Viewed October 24, 2018.
  • 19. The Green Knowledge Management Information System can be accessed at: https://forum-greenknowledge.ipb.ac.id/. Viewed October 24, 2018.
  • 20. For further explanation on the administrative costs associated with the GPF Activity, please see the Green Prosperity Facility Evaluation referenced and linked below in this report.
  • 21. MCA-Indonesia (2018) Policy Study to Promote Economic Opportunities for Women and Vulnerable Groups in Indonesia Low Carbon Economy, Jakarta Indonesia.
  • 22. The Government of Indonesia’s One Map Policy was initiated in 2011 to establish a unified database of geospatial information, including land use and land tenure, to be used to inform government decisions on the allocation and use of land and natural resources.
  • 23. MCC is waiting for information from the Government of Indonesia to verify this statement.
  • 24. Details can be found at: https://www.rspo.org/palmtrace. Viewed October 24, 2018.
  • 25. MCC is waiting for information from the Government of Indonesia to verify this statement.
  • 26. Learning from the experience with the Green Prosperity Facility has been applied to MCC facilities underway in Morocco, Benin, and Niger compacts.
  • 27. As estimated in the cost-benefit analysis at time of signing.
  • 28. Olken, Benjamin A.; Onishi, Junko; Wong, Susan. 2011. Indonesia’s PNPM Generasi Program : final impact evaluation report (English). Washington, DC: World Bank.
  • 29. Asian Development Bank (2010), Country Diagnostic Studies, Indonesia: Critical Development Constraints. This quotation is from the Executive Summary on page 4 but the larger discussion can be found in section 4.2.1 Human Capabilities beginning on page 57.
  • 30. Olken, Benjamin A.; Onishi, Junko; Wong, Susan. 2011. Indonesia’s PNPM Generasi Program : final impact evaluation report (English). Washington, DC: World Bank.
  • 31. During the design stage, the independent evaluator proposed a 5 percent effect size as a reasonable effect size to expect based on the project cost. The power calculations were driven in large part by the number of sub-districts in the three treatment provinces.
  • 32. http://scalingupnutrition.org/
  • 33. This indicator reports total Generasi block grant spending against the target for MCC’s contribution to Generasi’s block grant budget. The percent complete can be interpreted to mean that Generasi distributed block grants in excess of MCC’s contributions, by 28%. MCC’s targeted distribution toward Generasi block grants was met.
  • 34. During compact implementation, MCC approved increasing funding for the Procurement Modernization Project to $75 million.
  • 35. This represents the estimated population of project-affected local governments. Benefits associated with improved procurement within national ministries were not found to be significant.
  • 36. Officials from approximately 80 procurement service units were contacted, including all phase 1 and comparison PSUs.
  • 37. LKPP/Bappenas/MCA Indonesia (2013) Gender in Government Procurement in Indonesia: Survey Findings on Access to Procurement, Key Barriers and Trends, Jakrata Indonesia
  • 38. This new initiative was presented to MCC management for the purposes of transparency; however, the funding came from within the Supply-Side Activity, therefore no reallocation of funds between Activities was required. Funds were made available by MCA-Indonesia from savings projected in the purchase of multiple micronutrients, the use of district consultants, and total awards planned for the private sector response activity.
  • 39. MCC is waiting for information from the Government of Indonesia to verify this statement.
  • 40. As the compact entered the final year of implementation, MCA-Indonesia took seriously its charge to outline these “models” of application and “lessons learned” for its GOI stakeholders as reflected in the large number of studies produced. The best example is the Green Knowledge repository: https://pengetahuanhijau.batukarinfo.com.