COMMUNITY EMPOWERMENT, SYNERGY AND

SOCIAL ENTREPRENEURSHIP

By: Bambang Ismawan

ISEA Symposium on Social Entrepreneurship and NGO Sustainability January 21, 2013

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Great News ! The Economy of Indonesia growth 6,5% Inflation rate 2011 3,79%, far lower than

2010 that reach 6,96%, lower compare to BRIC countries

Indonesia appreciated very well in investment grade by lFitch Rating, after 14 years.

Government Debt Rate (25,70) is lower compared to other ASEAN and other center of Development Countries

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52% Villagers still living with Bad Sanitation

36% Urban Population without Clean water Access

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EVERY 2 HOURS, ONE WOMAN DIES AFTER DELIVERING BABY BECAUSE OF BAD HEALTH SERVICE

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51 MILLIONS BUSINESS ENTITY IN INDONESIA ARE MICRO ENTERPRISES, OWNED BY THE POOR GIVE LIVING FOR 200 MILLION PEOPLE

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Are They LAZY?

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They WORK HARD!

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What is THE RESULT?

MalnutritionBad Sanitation

Business StagnantTill Old

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What is THE RESULT

Difficult to get health care

Low QualityEducation

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The poor are not the have-notsThey are the have-little

POVERTY KEY WORDS11

BARGAINING POSITION

HUMAN RESOURCES

DISCREPANCY

ORGANIZATION

CAPITAL

TECHNOLOGY

INCOME

ACCESS TO DEVELOPMENT

PRODUCTIVITY

PARTICIPATION

TERM OF TRADE

POVERTY KEY WORDS12

HUMAN RESOURCES

CAPITAL

ORGANIZATION

BARGAINING POSITION

ACCESS TO DEVELOPMENT

PRODUCTIVITY

TERM OF TRADE

DISCREPANCY

INCOME

TECHNOLOGY

PARTICIPATION

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"When there is widespread poverty and social injustice, Social Entrepreneurship

is the answer"

MUHAMMAD YUNUS(2006 Nobel Peace Prize Laureatte)

ENTREPRENEUR14

Can be classified into two : Business entrepreneur Social entrepreneur

The basic difference is the use of both profit Business entrepreneur : profit for

share holder Social entrepreneur : the benefits

for stake holder

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ENTREPRENEUR

Creating Wealth and Social Justice

Evian, 2008

SOCIAL ENTREPRENEURSHIP

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Social entrepreneurship is social development with entrepreneurship solution.

Social development : is a development effort that includes aspects of poverty alleviation, productive employment & social integration.

Bambang Ismawan

17INITIATING THE SOLUTION #1

18 SOCIAL ENTREPRENEURSHIP,THE BINA SWADAYA WAY

BINA SWADAYA

Empowerment Institution founded by Pancasila Farmers Association (IPP) on May 24, 1967 to empower the poor and the marginalized

The Foundation

Board

5 Coordinators

17 Operating Companies

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BINA SWADAYA

The history: Pancasila Social Movement Era (1954 -

1974) Socio Economic Development Institution

Era(1974 – 1999) Social Entrepreneurship Institution Era

(1999 – present)

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5 FIELD OF ACTIVITIES

Community Empowerment Microfinance Service and Development Agribusiness Development Development Communication Marketing Promotion and Distribution

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FOCUS OF ACTIVITIES

Community Based Self Reliant Institution Development

Community Based Production Promotion and Development

Microfinance Services and Development

23 Community Based Self Reliant Institution Development

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SELF HELP GROUPFunction

Vehicle for : Learning and teaching Problem identification Decision making Resource mobilization Communication with the 3rd parties

SELF HELP GROUP MANAGEMENT25

SHG

DEMOCRATIC

OPEN MINDEDNESS INCOME GENERATING

HOUSEHOLD MANAGEMENT

CAPITAL FORMATION BUSINESS

DEVELOPMENT

TOWARD NEW IDEA TOWARD NEW

COOPERATION

REGULAR MEETING CADER FORMATION DEMOCRATIC BOARD ELECTION ACCOUNTABLE ADMINISTRATION PARTICIPATORY PLANNING,

IMPLEMANTATION AND EVALUATION

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SELF HELP GROUP FACILITATION

SHG Facilitation intended to provide technical assistance.

The role of facilitator as: motivator, facilitator and communicator.

Facilitator must have commitment and competent, need adequate training.

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RESULTS Direct facilitation: 3000 SHGs: 100,000 families Indirect Facilitation:

1. collaboration with National Board of Family Planning: establish of 650 thousand UPPKS SHGs (13.5 million families)

2. collaboration with National Planning Board and Ministry of Home Affairs in the IDT program: establish of 120,000 SHGs (3.6 million families)

3. collaboration with Ministry of Agriculture: establish of 60 thousand (1.2 million families) SHGs of small farmers-fishermen (P4K)

4. collaboration with Perum Perhutani (State Owned Forestry Company: establish of 7000 Forest Farmers SHGs (Social Forestry project)

5. Promotion of SHGs in collaboration with CSR programs

Community Based Production Promotion and Development28

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Community Based Production Promotion and Development

Virgin Coconut Oil Red Fruit Louhan Fish Adenium Aglaonema Anthurium

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Community Based Production Promotion and Development

About 50 products Cupang fish Lobster Longan Tin Fruit Mahkota Dewa Jelly Gamat Essential oils Reptile Durian Sarang Semut

Nepenthes Chili Hydroponic Vegetables Swallow Sengon tree Croton Cassava Catfish Dragon fruit Soursop etc.

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Community Based Production Promotion and Development

Strategy: Cooperation with research institutes Writing in magazines and books Training and consultation Marketing promotions through Agro Expo Managing Agricultural Shops and

distribution units

33 Microfinance Service and Development

INDONESIA BUSINESS ENTITIES STRATIFICATION

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Big Enterprise 4.370 (0,008%) Medium Enterprise 39.657

(0,072%) Small Enterprise 4.340.000 (7,88%) Micro enterprise 50.697.000

(92,04%)Total 55.081.027

Source : Ministry of SME and Cooperatives, Republic of Indonesia, 2010

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STRATEGIC POSITION OF MICROENTERPRISE

The elder poor

The poorest

Micro Entreprises(Economically Active poor)

Small scale business

The younger poor

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ECONOMIC ACTIVITIES OF MICROENTERPRISE

Primary and secondary activities : agriculture, plantation, animal husbandry, fisheries (all are implemented in limited scale and subsistent), small craftsmen, tailors, snacks producers, etc.

Tertiary activities : transportation (in varied kinds), renting activities of houses, land, production tools, etc.

Distribution activities : small traders in traditional markets, peddlers, retail distributors and agent, and the like.

Other service activities : street singer, shoes polisher, haircutter, mechanics, garbage laborer, street photographer, and so on.

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The Importance of Micro Enterprise

Extraordinary number & having potencies to develop fast

Vulnerable, poverty will grow largely & become burdens of the nation, unless they are empowered

Loan to micro enterprise generate average income 87,34% per month (Mat Syukur, Dissertation 2002)

From a study of Small Enterprises indicates financing is a determent factor of 53% of the Micro Enterprises transform to Small Enterprises (JBIC, REDI, Bappenas, Development Alternatives)

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MICROFINANCE SERVICE MODELS

Saving Led Microfinance: capital mobilization from members’ saving

Credit Led Microfinance: start up capital from investors

Partnership: Linkage Program of Bank and SHGs

Micro Banking: BPR (Bank Perkreditan Rakyat)

LEADERSHIP IN BINA SWADAYA39

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Charlize Theron Daniel Craig

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DNA98, 4% is the same,only 1.6% different

BINA SWADAYA LEADERSHIP According to PROF. GEDE RAKA

As a community organization Bina Swadaya uphold the values of human dignity (respecting humanity), within the community, institutions, relationship with other parties, and Bina Swadaya members.

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LEADERSHIP THAT RESPECT HUMANITY

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KNOW

LEDGE NETWORKING

COMPASSION

INTEGRITY

45INITIATING THE SOLUTION #2

ROOTS OF POWERLESSNESS

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POWERLESSNESS OF THE PEOPLE• POVERTY

• UNDERDEVELOPMENT

COLONIAL INHERITANCE

DEPENDENCYTRAP

MASSIVE CURRENCY DEVALUATION

CORRUPTION,COLLUSION, NEPOTISM

INSTABLE GOVERNMENT

DAMAGED ENVIRONMENT

NATURAL DISASTERS

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COLONIAL INHERITANCE Colonization that aims to get maximum

profit (Batigslot Politiek) to deplete natural resources causes of poverty and backwardness of the people VOC, armed traders, control of the

archipelago. Cultur stelsel (1830), forced cultivation

aggravate poverty. Agrarische wet 1870, the entry of western

capitalism.Economic dualism (Boeke)

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INSTABLE GOVERNMENT

Governance System Trial & Error: Liberal > < Guided Democracy Presidential > < Parliamentary Centralization > < Decentralization Attraction range of interests (ideological,

sectarian, regional)

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DEPEDENCY TRAP

Old Order : Party and Onderbouw System New Order : Project System for

Development Financing Reformation : the two am. systems are

working at the local level

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MASSIVE CURRENCY DEVALUATION

50.000.000.000 % for 67 years In the 50-ies : ‘Sjafruddin’s Scissor’ Rp1000

to Rp500 (recede for 50%) 1966: currency depreciation Rp1000,- into

Rp. 1,- (recede100.000%) 1967, US $1 = Rp84 – Rp100, average

Rp.95 2012, US $1 = Rp9500 (recede 10.000%)

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CORRUPTION, COLLUSION, NEPOTISM

Undermine the country's wealth Worsen rich-poor gap Distrust in public institutions

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NATURAL DISASTERS Earthquake Tsunami Cyclone & Hurricane Volcano Eruption

PROF. MT. ZEN53

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DAMAGED ENVIRONMENT Deforestations

Flood Landslide

Water and air pollutions

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POVERTY FIGURES Center of Statistical Bureau (BPS): the

number of poor 30.02 million (2011) World Bank: 56% of the population, or

approximately 135 million (income of less than $ 2 per day)

Referring to the Act. 20/2008 on Micro, Small and Medium Enterprises: 50.70 million units of micro

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Government

InitiativesPovertyReality

Deepened Poverty

Low Income

Hunger

Basic Need Cost

Economic Growth

GDP

Foreign Investment

POVERTY REALITY CAN NOT BE RESPONDED ADEQUATELY BY GOVERNMENT INITIATIVES

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COLLABORATION IS NEEDED FOR COMMUNITY EMPOWERMENT

Government

NGO

Communitty

University

Private Sector

Civil Society

Volunteers

SUSTAINABLE EMPOWERMENT MOVEMENT

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COMMUNITY BASED

ORGANIZATION

SERVICE PROVIDER INSTITUTION

COMMUNITY SELF RELIANCE DEVELOPMENT

INSTITUTION

SYNERGY PROMOTION INSTITUTION

Supportive

Government Policy

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COMMUNITY BASED ORGANIZATION

Self-Help Groups Ethnic Groups Religious Groups Primary Cooperative, Credit Union etc.

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COMMUNITY SELF RELIANCE DEVELOPMENT INSTITUTION

NGOs and CSOs in Agriculture NGOs and CSOs in Fishery NGOs and CSOs in Labor Affairs NGOs and CSOs in Women Affairs NGOs and CSOs in Youth Affairs Etc.

SERVICE PROVIDER INSTITUTION

Education and Training Institutions Research and Development Institutions Financial and Banking Institutions Government Service Institutions Press and Publications Etc.

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SYNERGY PROMOTION INSTITUTION

Independent Board, functioning to: Develop networking and partnership among

Community Based Organization, Facilitation Institution, and Service Provider

Conduct Capacity Building Promote legal and regulating framework

that enabling community empowerment Promote collaboration with Government,

Corporations, Philanthropic institutions, domestic and global

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UNIVERSITY ROLES

University

Tri Dharma

Education

Research

Community

Service

Human Resourc

es

Research and Knowledges

Historical Facts &

Public Trust

Special Institution for Research and Community

Service

Capacity to act as a glue (gluing function) of various potencies to synergistically enhance the

sustainable empowerment

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UNIVERSITY ROLES In order to apply the Tri Dharma

University, the University can serve as Synergy Promotion Institution to streamline their Research and Community Service Institution:1. To conduct the community research2. To build a stakeholder network cooperation3. To organize joint action program4. To involve students in the field work5. To dialog for Government support

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GOVERNMENT SUPPORT Formulate policies that create an conducive

environment for increasing community empowerment efforts by community

Strengthening the capacity of communities to be able to access the services of financial institutions

Provide facilitation and incentives to various empowerment initiatives

Etc.

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THANK YOUBAMBANG ISMAWAN Founder and Chairman of The Board of Trustee of Bina

Swadaya Foundation Founder and Chairman of TRUBUS Agriculture Magazine Founder and General Secretary of Gema PKM Indonesia

(Indonesian Movement for Microfinance Development) Founder and Chairman of The Board of Trustee of AKSI

(Indonesia Social Entrepreneurship Association) Founder and President of AKSI UI Foundation

b.ismawan@gmail.com ; bisma@cbn.net.id