a strategic road map to implement eco-sustainable … roadmap_indonesia... · 1 a strategic road...

1

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.

i

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

ii

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

iii

ECO-SUSTAINABLE WATER INFRASTRUCTURE (ESWIn) FOR INDONESIA:

iv

Summary

1

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.

2

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.

3

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.

4

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.

5

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)

6

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)

7

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.

8

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

9

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.

9

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

Economic Corridor

Characteristics Economic Development Focus Challenge in Economic

Development ESWIn Leading Agencies

Sumatera Rich Natural resources Minerals and mining Medium to heavy rainfall Moderate population

density

Main economic activities are palm oil and rubber (agriculture and industry), coal, steel and shipping

Construction of Sunda Straits Bridge

Improvement of transport services (land handling and port capacity)

Land and water use competition – within agriculture (paddy, palm oil and rubber) and between agriculture, industry, settlements (domestic use)

Deforestration Wastewater issues

especially from mining and industries

Water supply provision for supporting high demand from ports and industrial activities as well as domestic use in urban and rural areas

Promoting sufficient use of water for managing water demand through introduction of new technology together with incentive mechanisms and public awareness campaigns

Small-scale water supply alternatives for domestic use particularly in rural areas, e.g. community managed water supply systems and rainwater harvesting at household level

Proper use of decentralised cheap technology for treating wastewater, e.g. constructed wetlands

PPP for centralised water supply provision for urban areas and industries

Payment for environmental services and polluter pay principles

Provision of sufficient power for industry

Local Governments Ministry of Environment Ministry of Public Works

Java Large population High densities Humid tropical climate with

heavy rainfall Fertile soil especially for

paddy

Shifting to services-based economy

Main economic activities; food & beverage, textile, transportation equipment, shipping, ICT, defence equipment, and greater Jakarta area

Improvement of transport systems (port, mass public

Water supply and sanitation provision for people in both urban and rural areas

Water supply provision for industries and other economic activities

Huge electric power demands

Land subsidence and groundwater over

Sustainable electric power generation, e.g. solar cell, biogas and micro-hydro power plant for remote rural areas

Rainwater harvesting to increase access to safe and clean water; and at the same time reduce flood peak flow

SRI and irrigation water reuse (with optimised treatments)

Ministry of Energy and Mineral Resources Ministry of Public Works Local Governments

10

Economic Corridor



transport, and roads) Provision of electricity, clean

water treatment plant and wastewater treatment facilities.

Reforming flood control systems

extraction in some big cities Waste water issues Flooding

Cheap and proper decentralised sanitation technologies

Water sensitive urban design, water reuse and water recycle

Centralised waste water treatment plant through PPP especially for industry

River cleaning and restoration

Kalimantan Large land areas including tropical forest

Massive peat land areas Medium to heavy rainfall Natural resources potential Majority of the people in

rural areas work in farming and fisheries sectors

Main economic commodities; oil and gas, coal, palm oil, steel, bauxite and timber

The development of supporting infrastructures: improving access roads and transportation networks, increasing river and sea port capacities, increasing electricity generating capacity,

Conservation issues (forest and peat land)

Water supply and electricity provision for mining and industry in remote areas

Massive electricity demand for industries

Clean water and sanitation provision particularly in remote rural areas

Environmental impacts especially from mining

Sustainable electric power generation, e.g. water generated power plant (micro hydro power)

Sustainable forest and peat land management

Proper spatial planning and implementation

Decentralised water supply system, electric power generation, and waste water treatment plants (including sanitation) in remote areas (for mining and industry activities as well as domestics)

Law enforcement and incentives mechanism

Ministry of Forestry Ministry of Environment Ministry of Public Works Local Governments

Sulawesi Large land area Long coast lines Medium to heavy rainfall Moderate population

density

Main economic activities; agricultural sectors (rice, corn, soybean, and cassava), cocoa, fisheries, nickel and oil & gas.

Increasing agricultural production

Developing big-scale and home

Competing use of land and water for agriculture and industry activities

Environmental impacts from mining and industry

Provision of water and electricity for economic

Law enforcement and incentives mechanism

Small scale decentralised community based water supply systems and sanitation provision

Centralised water supply and waste water treatment in urban areas

Ministry of Public Works Ministry of Agriculture Ministry of Environment Local Governments

11

Economic Corridor



downstream industries Improvements of supporting

infrastructure: increasing storage capacity, improving road access, increasing electricity, water, telecommunications capacities.

activities Water supply and sanitation

(industry and domestics) Rainwater harvesting in rural areas System of Rice Intensification (SRI)

for sufficient use of water in paddy fields

Irrigation water reuse

Bali – Nusa Tenggara

Tourism dependent Some areas are very dry

and face water problems Small to medium size

islands

Gateway for tourism and national food supply.

Improving security, marketing and promotion,

Increase services & facilities such as water supply and electricity.

Improving infrastructure including roads, airport capacity & services, railways, and harbours & marinas

Increasing the production of fishery products as well as salt

Provision of water supply for tourism purposes

Waste management from tourism activities

Tourism facilities including sanitation

High water demand for agriculture particularly paddy fields

Ecological sanitation: promote water sufficient and prevent water pollution

System of Rice Intensification (SRI) for sufficient use of water in paddy fields

Centralised water supply infrastructure provision through PPP especially for tourism (hotels, resorts, etc)

Solid waste management

Ministry of Tourism Ministry of Public Works Ministry of Agricultures Local Governments

Papua – Kepulauan

Maluku

Significant land area in Papua

Small islands in Maluku Small populations Have many natural

resources, minerals and mining

Main economic activities i.e. food agriculture, copper, nickel, oil & gas, and fisheries.

Merauke Integrated Food and Energy Estate (MIFEE) development program

Improving supporting infrastructure: transportation, water, electricity.

High water demand for agriculture expansion

Environmental impacts from mining

High electric power demand for mining activities

Water supply, sanitation and electricity provision in remote areas

Small scale decentralised water supply, sanitation and electric power provision in small islands and other remote areas

Finding energy alternatives Law enforcement and incentive

mechanisms to control pollution

Ministry of Environment Ministry of Agriculture Ministry of Public Works Local Governments

12

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,

13

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.

15

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

15

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

16

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

17

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

18

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

19

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.

20

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

21

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)

22

Table 2. Enabling activities: Institutional Coordination and Planning.

Roadmap Targets Activities Enabling Activity Performance Indicator Tentative

Timeframe Institution(s) Lead/Partner

ESWIn vision agreed and accepted by relevant agencies (2013)

Establish an Expert Working Group as the focal point

Communication and engagement

Expert Working Group established December 2012

BAPPENAS

An effective communication mechanism to facilitate the Expert Working Group

February 2013 BAPPENAS

Workshops with key sectoral representatives


Workshop to finalize the roadmap document

August 2013 BAPPENAS

Public consultations with broader stakeholders (other institutions and local government)

September 2013

BAPPENAS

Produce communication materials for relevant agencies

Knowledge and information management

Relevant materials distributed to stakeholder agencies

2013 Expert Working Group

Clear communication mechanism to facilitate comments from other agencies

2013 Expert Working Group

Plans and policies reviewed, planning alignment activities and leveraging mechanisms identified (2014)

Scoping of relevant plans Role sharing Plans reviewed and leverage mechanisms identified

2014 BAPPENAS and Ministry of Public Works(PU)

Analysis of policy gaps Role sharing Policy gaps identified 2014 BAPPENAS and PU

Identification and formulation of leveraging mechanisms

Role sharing Leveraging mechanisms agreed among relevant institutions

2014 BAPPENAS and PU

23



Communication plan developed (2014) and implemented (2014-19)

Development of communication plan


Communication plan developed July 2014 BAPPENAS and PU

Implementation of communication plan


Communication plan implemented 2014 - 2019 BAPPENAS and PU

Pilot demonstration plan developed and Implemented (2015-2017)

Development of a pilot demonstration project

Capacity building Local ESWIn practices assessed and documented

2015 BAPPENAS

A pilot project developed based on local practices and implemented

2015-17 BAPPENAS

Implementation Plan outlining activities for 5 sectors developed and evaluated (2019)

Scoping of economic, social and cultural dimensions

Assessment of economic, social and cultural dimensions and disaster implications

Scoping paper on economic, social and cultural dimensions


Economic, social, cultural dimensions incorporated into the implementation plan


Scoping of implications of disaster management

Assessment of disaster risk Scoping paper on the implications of disasters and disaster management on the ESWIn Plan


Disaster management implications assessed and incorporated into the implementation plan


Scoping of role of ESWIn in managing the Water-Energy-

Role sharing Scoping paper and case studies showcasing the role of ESWIn in

2014 BAPPENAS

24



Food nexus managing the water-energy-food nexus

Incorporation of the role of ESWIn in managing water-energy-food nexus into the implementation plan

2015 BAPPENAS

Development of capacity building plan

Capacity building Capacity development gaps and requirements identified and the plan agreed among relevant institutions


Identifying new technology available for ESWIn

Knowledge and information management

New and appropriate technologies required for the implementation plan identified


Development of an ESWIn implementation plan

Role sharing Implementation plan outlining activities for 5 sectors developed and evaluated.


Identify funding gaps and mechanisms

Funding Funding requirements identified and funding mechanisms formulated

2016-2019 BAPPENAS and PU

Monitoring, evaluation, reporting and improvement (MERI) of the ESWIn implementation plan

Monitoring, evaluation, reporting and improvement

The MERI Framework developed and the Plan evaluated

2016-2019 BAPPENAS

Incorporate ESWIn into the next Medium Term National Development Plan (RPJMN) 2015-2019

Role sharing ESWIn adopted/incorporated into the next RPJMN (2015-2019)

2015 BAPPENAS

26

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

27

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

28

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

29

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

30

– 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

31

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

32

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

33

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.

34

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

35

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

36

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

37

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.

38

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

39

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

40

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

41

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

42

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,

43

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

44

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.