65039 JAVA RECONSTRUCTION FUND PROGRESS REPORT 2011 Building on Success: effectively Responding to multiple Disasters Asian Development Republic of Indonesia European Union Netherlands United Kingdom Canada Finland Denmark World Bank Bank JAVA RECONSTRUCTION FUND PROGRESS REPORT 2011 Building on Success: Effectively Responding to Multiple Disasters JAVA RECONSTRUCTION FUND PROGRESS REPORT 2011 Building on Success: Effectively Responding to Multiple Disasters JRF Secretariat Acknowledgments Indonesia Stock Exchange Building, Tower I, 9 Floor th This report was prepared by the Secretariat of the Java Jl. Jend. Sudirman Kav. 52-53 Reconstruction Fund with contributions from the Partner Jakarta 12910 Indonesia Agency (the World Bank) as well as project teams. The Java Tel: (+6221) 5229-3000 Reconstruction Fund Secretariat is led by the JRF Manager, Fax: (+6221) 5229-3111 Shamima Khan, with team members: Sarosh Khan, Anita Kendrick, Heri Wahyudi, Lina Lo, Puni Ayu Indrayanto, Inayat Printed in 2011 Bhagawati and Shaun Parker. This is the fifth annual public report produced by The team is supported by Inge Susilo, Olga Lambey and the JRF Secretariat and covers the reporting period Rachmawati Swandari. from July 1, 2010 to June 30, 2011. Contributing Writers: Didit Ahendra, Sri Aminatun, Virgi Fatmawati, Simon Gladwell, Stefanus Subantarja, Jacqueline Hicks, Rafael Bodie Wibowo and Sri Aminatun Editors: Kate Redmond (English) and T. Sima Gunawan (Indonesian) Translation: Hindra Cahyadi Design & Layout: BYBWN Printer: PT Lumbung Kencana Makmur JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Table of Contents List of Acronyms & Abbreviations 3 Joint Remarks from JRF Co-chairs 4 JRF Outcomes 6 Executive Summary JRF Support for the Recovery of Java 8 Chapter 1 Meeting Disaster Needs through Partnerships for Recovery 14 • Extending JRF Operations to support the Government of Indonesia in Disaster Response 15 • Communicating Results and Enhancing Coordination 18 Chapter 2 The JRF Portfolio—Rebuilding Homes and Communities and Restoring Livelihoods 22 • Portfolio Performance: Achieving Outcomes and Responding to New Challenges 24 • Recovery of Housing and Community Infrastructure 26 • Recovery of Livelihoods 29 Chapter 3 JRF Finances 34 • Allocations and Disbursements to Projects 36 • Project Expenditures 37 • Outlook 37 Chapter 4 Bringing the JRF to Conclusion and Looking Ahead 40 Annexes: Project Portfolio & Map of JRF-funded Activities 47 • Fact Sheet 1: Transitional Housing Projects 47 • Fact Sheet 2: Community-Based Settlement Rehabilitation and Reconstruction Project (CSRRP, or Rekompak) 50 • Fact Sheet 3: Livelihood Recovery in DIY and Central Java (JRF Livelihoods Recovery–GIZ) 54 • Fact Sheet 4: Access to Finance and Capacity Building for Earthquake Affected Micro and Small Enterprises (JRF Livelihoods Recovery–IOM) 58 • Map of JRF-funded Activities in Central Java, Yogyakarta and West Java 62 Tables • Table 2.1: Implementation Period of JRF Funded Projects 25 • Table 3.1: Source of Pledges and Cash Received 35 • Table 3.2: Project Disbursement and Expenditure as of June 30, 2011 36 Feature Stories • Gotong Royong Helps Communities Pick Up the Pieces After Disasters 20 • JRF Brings Livehoods Recovery to Small Farmers 38 • JRF Loans and Technical Assistance Helps Small Business Recover and Thrive 38 • Building Safer Communities through Community Settlement Planning 44 2 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS List of Acronyms & Abbreviations Bappenas Badan Perencanaan dan Pembangunan Nasional (National Development Planning Agency) BDR Bantuan Dana Rumah (Rekompak JRF housing grant) BKM Badan Keswadayaan Masyarakat (Community Self-Reliance Board) BMT Baitul Mal Wat Tamwil (a microfinance institution operating at the village level) BNPD Badan Nasional Penanggulangan Bencana (National Disaster Management Agency) BPBD Badan Penanggulangan Bencana Daerah (Provincial Disaster Management Agency) BPR Bank Perkreditan Rakyat (Community Credit Bank) BUKP Badan Usaha Kredit Pedesaan (Rural Credit Facility) CBDRM Community-Based Disaster Risk Management CHF Cooperative Housing Foundation CSO Civil Society Organization CSP Community Settlement Plan CSRRP Community-Based Settlement Rehabilitation and Reconstruction Project (Rehabilitasi dan Rekonstruksi Masyarakat dan Permukiman berbasis Komunitas/Rekompak) DIY Daerah Istimewa Yogyakarta (Yogyakarta Special Region) DRR Disaster Risk Reduction (Penanggulangan Resiko Bencana/PRB) GOI Government of Indonesia GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (German International Assistance Agency, formerly GTZ) IDR Indonesian Rupiah (currency) IMDFF-DR Indonesia Multi-Donor Fund Facility for Disaster Recovery IOM International Organization for Migration JRF Java Reconstruction Fund LRP Livelihood Recovery Project MFI Microfinance Institution MPW Ministry of Public Works (Kementerian Pekerjaan Umum) MSE Micro and Small Enterprises (Usaha Kecil dan Mikro) MSME Micro, Small, and Medium sized Enterprises (Usaha Kecil dan Menengah/UKM) MTR Mid Term Review PNM PT Permodalan Nasional Madani (A state-owned financial institution) PNPM Program Nasional Pemberdayaan Masyarakat (National Community Empowerment Program) Rekompak Rehabilitasi dan Rekonstruksi Masyarakat dan Permukiman berbasis Komunitas (Community- Based Settlement Rehabilitation and Reconstruction Project/CSRRP)) SC Steering Committee SME Small and Medium Enterprises (Usaha Kecil dan Menengah/UKM) TA Technical Assistance TRC Technical Review Committee TTN Tim Teknis Nasional (National Technical Team) 3 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Joint RemaRkS fRom JRf Co-ChaiRS Harvesting organic rice in Kascing Mertelu Village, Yogyakarta. These farmers are among the more than 15,000 micro, small, and medium enterprises (MSMEs) in 42 villages in Yogyakarta and Central Java that have received assistance from the JRF Livelihoods Recovery projects. 4 (GIZ collection) BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS W e are proud to note that the Java Reconstruction Fund (JRF) continues to make significant contributions to the recovery from the 2006 earthquake. The JRF projects showcase strong results, reaching housing, infrastructure and livelihoods targets on time and with high quality. But as importantly, they also encourage strong partnerships amongst stakeholders. Implementation has been impressive through government, communities and agencies, and exit strategies were jointly developed with local governments taking the lead. Throughout the process, provincial and district governments’ strong commitment to take forward project initiatives has been critically important. This year we have been particularly pleased with the impressive results achieved by our livelihood projects as they are coming to closure. This US$17.2 million program not only successfully rebuilt and improved businesses affected by the 2006 earthquake, but has also contributed to strengthening the economic position of women as more than 40 percent of beneficiaries of the two projects were women entrepreneurs. Overall, the two livelihoods projects have assisted more than 15,000 Micro Small Medium Enterprises (MSMEs) in 42 villages in Yogyakarta and Central Java. One project closed in June and the other is closing in September, having helped to establish a strong financial foundation for businesses affected by disaster. But as the recovery process from the 2006 earthquake entered its final stage, another disaster struck the regions of Central Java and yogyakarta, reminding us of continued vulnerability. On October 26, 2010, the Merapi volcano which is located on the border of these two regions underwent a massive eruption. This was then followed by seven additional major eruptions. The disaster devastated the surrounding villages and farms, many of them originally impacted by the earthquake, and claiming over 140 lives and displaced around 350,000 people. As Co-Chairs of the Steering Committee, we would like to extend our sympathy to the victims of this disaster. However, we are confident that this community will rise again as they have done over the last five years following the 2006 earthquake. The resilience and determination of these communities in rebuilding their lives has been the cornerstone of the success of the JRF. We are pleased that JRF financing was one of the first initiatives to support the government of Indonesia in response to the Merapi eruptions. As a response to governments’ request, the Steering Committee agreed to extend the scope and timeline of the Community-Based Settlement Rehabilitation and Reconstruction Project (CSRRP), or locally known as Rekompak, to respond to the Merapi eruptions. The support will include construction of housing and community infrastructure and community-based disaster preparedness planning. We hope the committment of all stakeholders will continue into the final year of the JRF’s mandate. Max H. Pohan Stefan Koeberle Julian Wilson Deputy Minister Country Director Head of Delegation Regional Development and World Bank European Union Local Autonomy Affairs Bappenas 5 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 JRf oUtComeS The eruptions of Mount Merapi severely disrupted the lives of people in the surrounding areas of Central Java and Yogyakarta, and triggered wide-spread evacuation of villages. Staff from JRF projects assisted with the immediate disaster response. (Fauzan Ijazah for JRF) 6 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS The Java Reconstruction Fund is an excellent example of the Government of Indonesia’s success in managing post disaster reconstruction effectively and efficiently. The JRF’s strategic approach to post disaster reconstruction of communities and livelihoods provides a highly effective model for Indonesia and for development partners. • Leadership: Reconstruction support was strongly led by the Government of Indonesia (GOI) and closely coordinated with local government from the very beginning. • Institutional Arrangements: GOI worked through line ministries to coordinate and implement the reconstruction program, an approach that proved to be a good fit for the scale, scope and nature of the disaster. • Strategy: Using lessons learned from the reconstruction of Aceh, GOI set out a clear strategy for reconstruction, particularly for housing, establishing a common approach and agenda for all partners to follow. • Implementation Decisions: Efficient and streamlined decision making led to an impressive balance of speed and quality achieved by GOI and development partners. Outcome: While financing through the JRF was only a small part of the overall reconstruction support, its approach to reconstruction has had huge multiplier effects with lessons for future post disaster recovery programs. • Over 280,000 houses were reconstructed in less than 2 years—an unprecedented speed—and the quality of housing construction has improved overall. • A strong framework was established for strengthening the ability of micro- finance institutions to provide access to finance in a post disaster setting, and extending services to previously non-bankable clients, with implications beyond the JRF. 7 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 exeCUtive SUmmaRy Here, a women’s group participates in skills training to produce fabric designs. (GIZ collection) 8 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS JRf Support for the Recovery of Java T here have been significant achievements and progress in reconstruction in the five years since a major earthquake struck Central Java on May 27, 2006. Just months later In Achievements Over 15,000 permanent houses have July 2006, a tsunami hit the southern coast of been built West Java province, causing further significant damage. The Java Reconstruction Fund (JRF) 7,300 temporary houses provided was established in 2006 at the request of the shelter while permanent homes were Government of Indonesia (GOI) to support the reconstructed Government’s recovery efforts in response Critical community infrastructure was to the earthquake and tsunami. The JRF built – bridges, roads, irrigation and supports the government’s rehabilitation and drainage channels reconstruction program with approximately US$94 million in grant resources provided Community planning equipped 265 by seven donors. The World Bank serves as villages to better cope with natural Trustee of the JRF, and the fund is governed disasters by a Steering Committee comprised of Government representatives and donors. 15,000 micro, small and medium entrepreneurs received access to The five projects in the JRF portfolio were finance, technical and business in their final phase and moving towards development assistance to enable their scheduled closing in June 2011, when recovery disaster once again hit the region. The JRF was well positioned to respond when Mount Merapi, a volcano located on the border between Yogyakarta and Central Java, erupted on October 26, 2010. JRF operations were quickly extended until December 2012 to support the Government of Indonesia’s response to the disaster. In early January 2011 the JRF Steering Committee allocated remaining available funds of US$3.5 million for the JRF Community-Based Settlement Rehabilitation and Reconstruction Project (CSRRP/Rekompak) to address housing and infrastructure needs arising after the Merapi eruptions. This was the government’s first and most significant response to the Merapi disaster. 9 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 the JRf Portfolio: Rebuilding Lives, homes and Livelihoods At the government’s request, the JRF strategy has followed a phased approach. Early support was focused on meeting housing and community recovery needs and subsequent support focused on addressing economic recovery. The JRF has prioritized disaster risk reduction in all aspects of its program. Restoring Housing and Community Infrastructure By 2008, the JRF’s CSRRp/Rekompak project had successfully met housing needs arising from the earthquake and tsunami. Approximately 99 percent of the more than 15,000 seismic-resistant core permanent houses constructed under the JRF have been occupied. Additional financing to the project will enable the reconstruction of a further 250 targeted houses affected by the eruption of Mount Merapi. The Merapi volcano located near the border between Central Java and Yogyakarta erupted in late 2010 spewing hot gases and ash as far as 5,000 meters into the atmosphere. More than 350,0000 people were displaced. The JRF was well-positioned to provide strategic support to the Government of Indonesia’s response to the disaster. 10 (Fauzan Ijazah for JRF) BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS The target of 265 village-level Community Settlement plans (CSps) had been completed by June 30, 2011. The CSP process was used to encourage greater involvement of marginalized groups in the reconstruction of homes and community infrastructure and planning for future disasters. Community infrastructure projects such as bridges, roads, and irrigation and drainage channels are identified and built through the CSP process. Local governments expanded community settlement planning using their own resources under a “replication� phase. Beneficiary satisfaction with the infrastructure assets provided is also high. In the early phase of reconstruction the JRF provided safe and durable transitional shelters to affected households. Nearly 7,300 temporary housing structures were built through CSRRP/Rekompak and two earlier projects focused on transitional housing. Restoring Livelihoods The two JRF livelihoods Recovery projects were the government’s primary vehicle for livelihood recovery following the 2006 earthquake and tsunami. Working closely with local governments, they have produced significant results in supporting Micro, Small, and Medium Enterprises (MSMEs) in Central Java and Yogyakarta Special Region (DIY). The projects total US$17.2 million and are implemented by the International Organization for Migration (IOM) and the Deutsche The JRF supports innovative solutions to economic recovery. Above a production skill training on batik making in Kulonprogro district, Gesellschaft für Internationale Zusammenarbeit Yogyakarta. (GIZ, formerly GTZ). (GIZ collection) These projects focused on improving access to finance, replacing assets, and providing technical assistance and enhanced business skills to more than 15,000 micro, small and medium enterprises (MSMEs) in the affected areas. Both projects have shown success in restoring MSMEs to pre- earthquake operating levels or better and made significant impacts on beneficiaries’ income, especially for women. Important outcomes have been achieved in improving access to finance for earthquake-affected MSMEs. By June 30, 2011, the GIZ Livelihood Recovery project had provided loans to more than 10,000 beneficiaries, many of whom were previously considered “non-bankable�. Both JRF livelihoods projects received additional financing to scale up support and implement exit strategies. Capacity building to improve sustainability and the ability of local governments to mainstream livelihood recovery and disaster risk reduction activities were an important focus of these exit strategies. A joint closing event highlighting these achievements was held in Yogyakarta in June 2012. The IOM- implemented project closed on June 30, 2011 and the GIZ project will complete its final activities and close on September 30, 2011. 11 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 In collaboration with nine local designers, batik and traditional hand loomed lurik produced by JRF Livelihoods Recovery program beneficiaries were transformed into modern attire. The fashion show was part of closing events carried out in June 2011 in Yogyakarta for the JRF livelihoods projects implemented by GIZ and IOM. (IOM collection) JRf operations and finance Seven donors contributed a total of US$94.1 million to the Java Reconstruction Fund. An additional US$4.5 million is expected over the life of the fund in income earned on investments of JRF funds. The JRF has fully programmed its available funds, with a total of US$94.7 million allocated to the five projects in the JRF portfolio. This includes the JRF’s allocation of US$3.5 million in additional financing to the CSRRP for responding to the Merapi eruptions, has effectively allocated all available JRF funds to projects. The program administration and project preparation and supervision costs are projected to total $3.3 million for the life of the JRF, and fully covered by the investment income. Eighty two percent (or US$77.4 million) of JRF funds have been committed to reconstructing housing and community infrastructure. The JRF has allocated US$17.2 million to projects focusing on the recovery of livelihoods, an amount that accounts for approximately 18 percent of JRF allocations. So far about 96% of allocated funds have been disbursed to projects. A cumulative total of US$89.9 million has been spent by projects implemented under the JRF portfolio, totaling approximately 99% of funds disbursed to these projects. The projects are expected to spend all funds allocated for project activities. 12 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS outlook The JRF will continue its commitment to support the post-disaster recovery of communities in Java until its closing date. The Merapi eruption presented a new area of need to which the JRF was well positioned to respond. As an existing mechanism already in place, the JRF was able to quickly respond with its final commitment of funds. The last three projects have made sustainability of project outcomes, particularly related to disaster risk reduction and preparedness, an important priority in their exit strategies. The JRF will continue its support for the reconstruction of Java from its latest disaster through the CSRRP/ Rekompak until the project closes in June 2012. The JRF itself will conclude all activities and close on December 31, 2012. The JRF’s flexibility in responding to three types of disasters---earthquake, tsunami and volcanic eruption---provides lessons for recovery and reconstruction efforts to address a range of natural disasters. Many of the disasters that occur on a regular basis in Indonesia are also similar in magnitude of impact. This too provides lessons for disaster response fit to scale. The Government of Indonesia, taking lessons from the experiences in Aceh and Java, has now established the Indonesia Multi-Donor Fund Facility for Disaster Recovery (IMDFF-DR), a standing fund for disaster prevention and response activities. Lessons on prevention as well as response are being applied across Indonesia, and can provide valuable insights to inform post-disaster support globally as well. The IOM Livelihoods Recovery Project successfully completed its activities and closed on June 30, 2011. Several stakeholder workshops were conducted to assess impact and prepare for post-project activities prior to the project’s closing. (IOM collection) 13 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 ChaPteR 1 The integration of disaster risk reduction activities (DRR) into JRF projects have made beneficiaries more responsive in managing disasters. Disaster response drills such as this simulation in Klaten District, Central Java, have made communities more aware of appropriate actions and responses in case of disasters. 14 (IOM collection) BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS meeting Disaster needs through Partnerships for Recovery T he Java Reconstruction Fund (JRF) was established at the request of the government of Indonesia (gOI) to support the government’s recovery efforts in response to the Java earthquake of May 27, 2006, and the West Java tsunami of July 2006. A comprehensive analysis by a team of Indonesian Government and international experts estimated the total value of damage and losses sustained as a result of the earthquake and the tsunami to be over US$3 billion.1 The JRF was scheduled to close on December 31, 2011. On October 26, 2010, disaster hit the region once again when Mount Merapi, a volcano located on the border between yogyakarta and Central Java, erupted. This was followed by seven additional major eruptions, with the last one occurring on November 11, 2010. The eruptions caused widespread damage in the area. In November 2010, at the request of the Government of Indonesia, the JRF donors agreed to extend the closing date and scope of the JRF in order to respond to the Merapi eruptions. The overall goal of the JRF is to respond to the most basic needs of the households affected by the earthquake and tsunami. The Government prioritized support for the rebuilding of housing, recovery of livelihoods and increasing the disaster preparedness of affected communities. A Mid Term Review of the program carried out in 2009 found the JRF to be a highly relevant program that has contributed substantially to the overall successful reconstruction and rehabilitation effort. JRF donors including the European Union, the Asian Development Bank and the governments of the Netherlands, United Kingdom, Canada, Finland and Denmark, have provided approximately US$94 million in grant resources to support the government’s rehabilitation and reconstruction program. The World Bank serves as Trustee of the JRF. extending JRf operations to support the Government of indonesia in Disaster Response The JRF coordinates closely with the government of Indonesia to provide post-disaster reconstruction and rehabilitation. The JRF is governed by a Steering Committee that consists of 1 Preliminary Damage and Loss Assessment: Yogyakarta and Central Java Natural Disaster, a Joint Report by BAPPENAS, the provincial and local governments of D.I.Yogyakarta, the provincial and local governments of Central Java, and international partners, June 2006. 15 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 government representatives and donors, with three co-chairs representing Bappenas, the World Bank as Trustee of the Fund, and the European Union. The Steering Committee sets policy and makes funding decisions for the JRF. A Secretariat supports the Steering Committee and Trustee in administering the JRF. A Technical Review Committee (TRC), with representatives from the local governments of Central Java and the Yogyakarta Special Region, provides technical review of project proposals and program activities, monitors implementation progress, and makes recommendations to the Steering Committee. Following the eruptions of Mount Merapi, the JRF Steering Committee responded to the government’s request to assist with the reconstruction of communities impacted by volcanic ash and lava flows. It was decided to extend the closing date of the JRF to December 2012 and allocate the JRF’s remaining funds to support the needs of the victims of the Merapi eruptions. The extension of the closing date was formalized with the signatures of all donors in June 2011. Additional financing of US$3.5 million for Although the Merapi eruptions caused delays in the implementation of JRF projects, overall negative impact was able to be reduced the JRF Community-Based Settlement to a minimum. Above, construction of a bridge at Canden Village, Yogyakarta. Rehabilitation and Reconstruction project (CSRRP/Rekompak collection) (CSRRp/Rekompak 2) was approved by the Steering Committee in early January 2011 to address needs arising after the Merapi eruptions. At the request of GOI and the provincial governments of Central Java and Yogyakarta, the CSRRP/Rekompak has been tasked to scale up its activities and respond to the needs of affected communities. This additional financing is being carried out in two phases. The eruptions caused widespread damage in 45 of the villages where JRF was already active as a result of the previous earthquake and tsunami. During the initial phase implemented until June 2011, the project conducted activities in those 45 villages already covered by the JRF. The additional activities focused on transitional housing, reconstruction of permanent houses, tertiary infrastructure and community settlement planning. A subsequent phase became effective after the extension of the JRF closing date to December 2012 was formalized. This phase scales up CSRRP/Rekompak activities to 43 more villages affected by the Merapi eruptions which were not previously covered by the JRF. This phase will continue implementation through June 2012. 2 CSRRP is widely known by its Indonesian acronym, Rekompak. 16 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS The Steering Committee endorsed additional financing for both JRF livelihoods Recovery projects within the last year. The requests for additional financing for the two projects, implemented by the International Organization for Migration (IOM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, formerly GTZ), were approved in principle at a meeting of the SC in May 2010. In October 2010, the formal request for additional financing was endorsed by the SC for the Access to Finance and Capacity Building for Earthquake Affected Micro and Small Enterprises project implemented by IOM. The project closed successfully as scheduled on June 30, 2011, having fulfilled its objectives. In February 2011, additional financing of US$500,000 for the GIZ Livelihoods Recovery project was endorsed by the SC. This funding has enabled the project to implement activities related to the project’s exit strategy. These include an impact assessment and capturing of lessons learned, and enhancing sustainability by strengthening local government and microfinance institutions. An extension to the GIZ Livelihoods Recovery project was granted until September 30, 2011 to allow the project sufficient time to complete these activities. The additional funding to these two projects is not related to activities in response to the Merapi eruptions, but part of a previously planned expansion. GIZ provided training to strengthen the capacity of microfinance institutions to address the needs of borrowers who had defaulted on their loans as a result of the earthquake. Loan officers from about 30 BPRs in Central Java and DIY attended this training in Magelang, Central Java. Officials from Bank Indonesia officially opened the program. (GIZ collection) 17 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Communicating Results and enhancing Coordination The Java Reconstruction Fund continues to engage its stakeholders through various communications and outreach activities. These activities are conducted to ensure high participation and ownerships of projects. In the past year these activities have intensified as JRF projects approached closure. Communications also played a significant role during the Merapi volcano eruptions with JRF projects actively involved in the relief effort. Close communications and coordination with local stakeholders are key to ensure sustainability. The partnerships forged with stakeholders have allowed the JRF to effectively respond to local needs and to ensure that knowledge and information are properly transferred and disseminated. Exit strategies in particular were jointly developed with local governments taking the lead. Throughout the process, provincial and district governments demonstrated impressive and commendable commitment to take forward various project initiatives. For Rekompak, this resulted in the expansion of project scope and extension of closing date in order to respond to the needs of Merapi affected areas. JRF projects actively supported immediate relief efforts during and in the aftermath of the Merapi eruption. These efforts included deploying vehicles and field facilitators to assist in the evacuation process; setting up emergency aid posts in several districts such as Sleman (the most affected), Magelang and Boyolali; assisting the National Disaster Management Agency (BNPB) and local governments to coordinate the overall relief efforts of the affected areas, particularly in information management and mapping support. 18 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS leveraging both mainstream and new media outlets enhances the JRF’s public profile. In the past year, the JRF and its three active projects have generated over 100 positive media articles in local and national media. These were particularly evident during the Merapi response period and during the closing campaign of the livelihood projects. New media such as social networking sites and official websites also became an effective avenue to increase stakeholders’ participation and interactions. Platforms such as YouTube and Facebook are being utilized to increase interactions among stakeholders. A joint communication campaign was conducted to communicate impacts and achievements of the livelihood projects. The “Partnership for Sustainability� campaign was aimed to encourage continuous engagements amongst stakeholders in order to sustain impacts beyond closure of these projects. Activities conducted include press conferences and visits to project sites, radio and TV talkshows, product expo and several high profile events. The two-month long campaign culminated in a dinner reception where project beneficiaries showcased their products to various key stakeholders including local government officials, donor representatives, supporting organization and counterparts, as well as the media. Several local ‘champions’ of the projects were recognized during the event for their considerable support and participation in project activities. The JRF promotes transparency and accountability in its program implementation. All JRF funded projects are required to establish complaint handling mechanisms whereby stakeholders, particularly beneficiaries, can channel their feedback, queries and grievances regarding project targeting and implementation. These mechanisms are continually monitored. Nearly all complaints and queries were handled and resolved by the respective projects through direct verifications with communities and complainants involved. The success of the JRF continues to capture the interest of people across the world. Often VIP visits are hosted for dignitaries and high level donor delegations, such as this group of European Union Parliamentary members, where beneficiaries are given the opportunity to showcase results and impact of the program. (JRF collection) 19 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Gotong Royong Helps Communities Pick Up the Pieces After Disasters In the aftermath of different disasters, communities across Yogyakarta, Central and West Java continue to support each other to rebuild their lives and their communities, Bu Wasiyah, a survivor of the Merapi eruptions. She and her late husband, Pak Slamet donated parts of their land to other families who have lost their homes to the Merapi often donating personal eruptions. resources and property (CSRRP/Rekompak collection) for the greater good of the community. disasters. With input from the contributed of their own whole community, relocation resources for the more needy Wonolelo Village in sites were identified, and villagers. “For those who pleret Subdistrict, Bantul, households located in the could not afford to finish yogyakarta, constantly faces most disaster-prone areas building walls for their homes, potential disasters triggered were encouraged to relocate. I allowed them to cut down by landslides, droughts, Some villagers resettled on my bamboo and use it for wall floods, and earthquakes. their own land, while others covering,� says Pak Muhyidin, Village residents have used settled on village-owned land a respected public figure the Javanese tradition identified for resettlement use. and one of the members of of gotong royong, or Many villagers then used the Community Self-Reliance community cooperation, to funds from the JRF, offered Board (BKM) in Wonolelo. work collectively to solve for households that relocated the problems plaguing to safer grounds, to build their In Ngepringan Village, after their village. Through the own homes, often salvaging the eruption of Mount Community Settlement roof tiles, door frames, and Merapi, Pak Slamet Rusdi planning (CSp) process, under even various wall materials and his family became the JRF Community-Based from the houses that they left actively engaged in the Settlement Rehabilitation behind. JRF Community-Based and Reconstruction project Settlement Rehabilitation (CSRRp, or Rekompak), areas Continuing the strong and Reconstruction project were identified that are community spirit, community (CSRRp/Rekompak). Most of particularly prone to these members have also their village was destroyed on 20 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS November 5, 2010 when hot digging out his woodworking In April 2011, Pak Rusdi and lava glided down the gendol machinery. He even tried his family were selected as River bed and swiftly swept to utilize the land located JRF housing grant (BDR) through the village – an area adjacent to the temporary beneficiaries. Sadly, Pak previously predicted to be out shelter to rebuild his sawmill Rusdi passed away of a heart of the path of Mount Merapi’s and window and door frames attack before his family’s lot eruption. Many villagers lost business, which would support was drawn for their housing their lives. But Pak Slamet the reconstruction of many of plot. With the help of JRF, his Rusdi and his wife, Bu Wasyiah the houses in the area. extended family members survived, along with their are now rebuilding their lives siblings and children. However, Aware of the suffering of many together with other community they lost their home and most of the other families that also members on the land which he of their belongings, including lost all their possessions as donated. their sawmill and stock of a result of the eruptions, Pak wood. Slamet decided to donate his Bu Wasyiah grieves for land for many of these families her husband, and with her After they were evacuated, to rebuild their houses on. He family and community Bu Wasyiah and Pak Slamet worked hard with his children fondly remembers his and their family lived in a to clear the plot of land that commitment and strong sense temporary shelter at gondang would ultimately provide of community. His legacy Dua, Wukirsari Village. While housing not only for his family, inspires Bu Wasyiah and the they stayed at the shelter, Pak but for other families affected community as they rebuild Rusdi worked unceasinlgly by the volcanic eruption. their lives. to revive his business by Bu Wasiyah and her son pose in front of their new house built by CSRRP/Rekompak. Still grieving from her husband's passing, she continues to rebuild her life with the rest of the community. (CSRRP/Rekompak collection) 21 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 ChaPteR 2 Above, a collection of lurik fabrics from Central Java, produced by beneficiaries of the JRF-supported GIZ Livelihoods Recovery Project. Demand for traditional lurik continues to rise as local government officials have adopted it as one of their uniforms. (GIZ collection) 22 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS the JRf Portfolio—Rebuilding homes and Communities and Restoring Livelihoods R emarkable results have been achieved in the overall reconstruction of Java following the disasters of 2006 through the coordinated efforts of government, donors and targeted communities. The estimated damage and losses from the May 2006 earthquake totaled more than US$3 billion. More than half of this total consisted of damage to private houses. Small and medium enterprises, especially in the area’s important handicrafts sector, were also severely affected. Many of these were home-based industries, and hence the damage to houses also had a corresponding impact on livelihoods. The reconstruction of housing in Java was completed with unprecedented speed, with 250,000 severely damaged or destroyed houses reconstructed within 18 months.3 The rebuilding of homes was the first priority of the government’s reconstruction efforts. The lack of earthquake-resistant construction methods contributed to the heavy damage to housing and small businesses. Many houses constructed of brick and/or concrete, without adequate reinforcement, did not withstand the effects of the earthquake, while houses constructed out of wood and/or bamboo proved to be more resistant to the tremors. The JRF housing and community infrastructure project has incorporated earthquake-resistant building technologies into its project activities in order to ensure the newly- constructed homes are more resistant to possible future earthquakes. The economic impact of the 2006 earthquake was particularly heavy due to the large number of home-based industries in yogyakarta and Central Java. Micro, small and medium enterprises (MSMEs) were the most affected and also had the fewest resources for rebuilding their livelihoods. An estimated 650,000 workers were employed in sectors affected by the earthquake, particularly in the ceramics, furniture, textiles and weaving, silver and leather manufacturing, and food processing industries. MSMEs suffered approximately 90 percent of damage and losses in the private sector, with 30,000 enterprises directly affected. Access to finance, particularly working capital, and the inability to service existing loans were identified as the major constraints to recovery for these micro and small enterprises. The JRF has been a flexible instrument for government-led disaster recovery in Java. By the time the National Technical Team (TTN) completed its mandate in 2008, most of the overall reconstruction and rehabilitation activities had been completed, including most of the JRF’s housing reconstruction. The TTN’s closing report indicated that assistance for livelihood recovery among earthquake affected households, particularly access to finance, was still needed. Disaster-risk reduction was also identified as an important need in order to increase community resilience to future disasters. The JRF program extended its program to December 2011 in order to address these important remaining needs. 3 Tim Teknis Nasional: Laporan Akhir Pelaksanaan Tugas (National Technical Team Final Implementation Report), June 2008. 23 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 In the last quarter of 2010, the volcanic eruptions of Mount Merapi brought destruction to communities in Central Java and yogyakarta once again. Response to support recovery was quickly mobilized through the JRF’s CSRRP or Rekompak. The JRF SC responded to Government requests by allocating additional financing to CSRRP/Rekompak to assist with reconstruction of communities in the affected areas, including 45 villages which had already received JRF assistance for reconstruction from the 2006 earthquake. The closing date of the JRF was also extended to December 2012 in order to allow time to carry out these additional activities. This chapter presents an overview of the JRF portfolio results achieved through June 30, 2011. The JRF targeted the reconstruction of housing and rehabilitation of livelihoods through five projects as described in the sections below. The details on the full scope of each project are provided in Annex 1. Portfolio Performance: achieving outcomes and Responding to new Challenges The JRF supported the response of the gOI to the earthquake damage by responding in two areas: (i) Reconstruction of Housing and Community Infrastructure, and (ii) Rehabilitation of livelihoods. Housing reconstruction was prioritized by the Government of Indonesia in the early phase of reconstruction, with livelihood rehabilitation to follow after the remaining contribution of donor funds became available. JRF financing for projects was aligned to this strategy and was based on availability of funds. The World Bank plays a supervisory and oversight role on all JRF projects. The JRF has allocated US$ 94.7 million to its portfolio consisting of five projects. A total of US$77.4 million has been allocated to the reconstruction and rehabilitation of housing and community infrastructure in the affected areas through three projects: two completed projects providing transitional housing, and the JRF housing project formally known as the Community-Based Settlement Rehabilitation The Merapi eruptions displaced more than 350,000 people. Based on the Government of Indonesia’s request, the JRF responded by allocating remaining grants to support reconstruction of affected communities through the CSRRP. (Fauzan Ijazah for JRF) 24 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS and Reconstruction Project (CSRRP or Rekompak). The other two projects in the portfolio are the Livelihood Recovery projects, one implemented by GIZ and the other implemented by IOM, which have been allocated a combined total of US$17.2 million. The JRF has completed most of its activities in response to the 2006 disasters. The JRF’s initial response was through two projects that provided transitional housing and were implemented by two different implementing partners, IOM and the Cooperative Housing Foundation (CHF). These projects were completed and closed in mid 2007. The CSRRP/Rekompak, implemented by the Ministry of Public Works, began in December 2006 and received an initial extension to June 2011 in order to scale up its disaster preparedness and community infrastructure work, based on recommendations from the JRF’s Mid Term Review (MTR) and government requests. JRF efforts in livelihood recovery started once housing reconstruction was well underway. Projects implemented by IOM and GIZ focusing on the recovery of livelihoods began implementation in late 2008 and 2009. The IOM Livelihoods Recovery project completed its activities and closed on June 30, 2011. The GIZ Livelihoods Recovery project is completing final implementation of its exit strategy and is scheduled to close on September 30, 2011. Once the GIZ project closes, only the CSRRP/Rekompak activities related to the recovery of communities affected by the eruptions of Merapi will continue in active implementation until 2012. The JRF has prioritized disaster risk reduction in all aspects of its program, creating synergies across the projects. Earthquake resistant techniques and designs have been mainstreamed in the physical reconstruction activities of permanent housing and transitional shelters and the Community Settlement Planning (CSP) process involves a strong disaster risk reduction (DRR) focus. Community infrastructure projects focused on DRR include escape routes, emergency assembly points and retaining walls. The Livelihoods Recovery project implemented by IOM also focused on building capacity of local governments, civil society and MSMEs in DRR and preparedness as part of its project exit strategies. GIZ’s Livelihoods Recovery project also included DRR in its technical assistance. The success of the various facilities and disaster response training provided by JRF projects were demonstrated with the eruption of Mount Merapi. Evacuation routes, facilities and procedures were used by the affected communities, and the technical and management skills taught were put to immediate use during both evacuation and disaster response. Significant results and lasting impacts have been achieved through the JRF’s projects. Project results in the two main areas of JRF programming are described in the sections that follow. table 2.1 Implementation period of JRF Funded Projects GRant vaLUe aRea of JRf SUPPoRt 2006 2007 2008 2009 2010 2011 2012 US$ miLLion Housing and Community Recovery Transitional Housing – IOM 1.05 DeC–JUn Transitional Housing – CHF 1.27 DeC–aUG Community Settlement Reconstruction and 75.12 DeC–JUn Rehabilitation Project (CSRRP) Recovery of Livelihoods Rehabilitation of MSEs - IOM 5.98 DeC–JUn Livelihood Recovery in DIY and Central 10.76 may–SeP Java - GIZ 25 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Recovery of housing and Community infrastructure The JRF followed a multi-phased approach for reconstruction of housing and community infrastructure. The JRF made an early commitment to the reconstruction of housing in response to the GOI’s priorities. The two Transitional Housing projects provided immediate shelter to affected households while the more time-consuming process of constructing permanent housing took place. The CSRRP also initially provided transitional shelters while permanent housing was under construction. Once its permanent housing targets and key community infrastructure elements for the initial earthquake and tsunami reconstruction activities were nearing completion, CSRRP focused on supporting the development of Community Settlement Plans (CSPs). These village-level spatial plans help communities identify needs and incorporate disaster risk reduction and management strategies through an inclusive, community- based approach. The CSRRP has now been extended to June 2012 in order to provide a strategic, focused response to the needs of those affected by the October/ November 2010 eruptions of Mount Merapi through the reconstruction and rehabilitation of housing and community infrastructure. Safe and durable transitional shelters were provided to affected households in the early phase of reconstruction. Both of the JRF’s Transitional Housing projects closed in mid-2007 having met the overall needs for transitional shelters. The two projects provided a total of 4,790 transitional shelters and, the JRF’s permanent housing project (CSRRP) provided an additional 2,489, bringing the total number of transitional houses provided by the JRF to almost 7,300. The overall permanent housing reconstruction was carried out quickly enough that further construction of transitional housing became unnecessary, and so the project recalibrated its approach and shifted focus to permanent housing. The Mid Term Review (MTR) of the JRF found that the Transitional Housing projects were highly relevant as they covered a critical gap in meeting shelter needs. Over 95 percent of beneficiaries reported that the transitional shelters enhanced their ability to resume normal household activities after the earthquake. Housing construction continues in several Merapi affected villages. Here, a home nears completion in Kepuharjo Village, Yogyakarta. (Iwan Gunawan, The World Bank) 26 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS The CSRRp has successfully met its housing reconstruction targets for the 2006 disasters. Implemented by the Ministry of Public Works with the involvement of beneficiary communities, about 15,150 permanent houses were designed and built. The CSRRP provided earthquake-resistant core houses that beneficiaries could modify and finish to meet their individual household’s needs. Additional financing to the project will enable the reconstruction of a further 250 targeted houses. With the extension of the project to June 2012, and the additional financing allocated to the project for the response to the Merapi eruptions, a further 250 houses are targeted to be rebuilt. The beneficiaries of this component will be selected by community groups, with the assistance of the project’s community development facilitators. local governments expanded community settlement planning using their own resources under a “replication� phase. Local governments in Central and West Java and DIY used their own resources for this replication phase, providing support for facilitating the planning process in additional villages while JRF made funds available for the community infrastructure and disaster preparedness activities identified through the CSPs. Additional financing was approved by the JRF Steering Committee in 2009 for this phase in order to extend the community spatial planning process and infrastructure activities to an additional 164 villages, bringing the total number of villages covered to approximately 265. The CSP process has been completed for the earthquake and tsunami reconstruction phase of CSRRP/Rekompak. The successful community-driven approach to the reconstruction of housing in Java is now being used to support Merapi victims. Drawing on the lessons learned and strengths of the similar CSRRP housing project in Aceh, this successful approach was adopted by the Government of Indonesia and the JRF for the reconstruction of permanent houses following the Java earthquake, and again more recently after the eruption of Mount Merapi. The high levels of community involvement in this participatory process, enhanced by the Javanese tradition of “gotong-royong� (community self-help or mutual cooperation), has led to high beneficiary satisfaction rates to date. The open planning and decision-making processes, including transparent processes for targeting beneficiaries and procedures for complaint handling and resolution, have resulted in increased accountability, greater contributions from the communities and enhanced community ownership in the reconstruction process as beneficiaries take responsibility for reconstructing their lives. The communities affected by the eruptions are also familiar with the processes employed through this approach, which further enhances effective implementation. A comprehensive CSp approach continues with the activities implemented through the additional financing to the project. CSPs are now being prepared in 45 villages for the reconstruction and rehabilitation of Merapi affected areas. The spatial plans take into account social and environmental concerns, as well as increased disaster preparedness, in the identification and implementation of the community infrastructure projects. Through the additional financing, the project is also providing support to local government capacity building for greater participation in CSP approval, DRR investment prioritization, and transfer of knowledge gained under the Merapi rehabilitation and reconstruction program. Beneficiary satisfaction with the housing and infrastructure assets provided is high. A technical audit by two leading universities (Gadjah Mada University in Yogyakarta, and Diponegoro University in Central Java) reported that the houses are generally of good quality, and are built to acceptable anti-seismic standards. The occupancy rate of these houses is 99 percent, indicating a high degree of beneficiary satisfaction. Community infrastructure projects include village roads and footpaths, retaining walls, water supply and sanitation facilities, and other basic community infrastructure. These projects were identified and prioritized through a participatory process with the communities affected. 27 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Community Settlement planning (CSp) is an inclusive process that encourages greater involvement of marginalized groups in the reconstruction. For example, women and the poor are given greater voice in identifying and prioritizing projects that impact the whole community as a result of their involvement in the planning process. CSP has also led to a higher degree of beneficiary satisfaction and community ownership of the planning process and new assets. A broader range of community members are exposed to disaster preparedness strategies through the planning process, which also contributes to the project’s aim of rebuilding stronger and more resilient communities. Village Spatial Plan – Map of Evacuation Sites and Routes purbayan Village, Kotagede Sub-district, yogyakarta Office of the head of the village • Capacity: 50 families Banguntapan Elementary school building • Facilities: 3 bathrooms Rejowinangun & fields • Earthquake-proof building I • Capacity: 250 families • Facilities: 6 bathrooms Hospital • Earthquake-proof • Capacity: 150 families II construction • Facilities: sufficient III Elementary school building & fields • Capacity: 250 families IV • Facilities: 12 bathrooms • Earthquake-proof building Prenggan Empty field • Capacity: 450 families Empty field • Facilities: none • Capacity: 300 families • Facilities: none V Junior high school building & fields Empty field VI • Capacity: 350 families • Capacity: 450 families • Facilities: 9 bathrooms • Facilities: none VII • Earthquake-proof building XII Jagalan VIII XIII LeGenD Empty field XI IX Village border • Capacity: 450 families • Facilities: none Neighborhood border XIV Flood areas X Poor drainage areas Wirokerten Fire hazard Whirlwind hazard Evacuation site Mosque as alternative site Elementary school building AMM Inn & fields Evacuation route • Capacity: 350 families • Capacity: 250 families • Facilities: 8 bathrooms 100 m 50 m 200 m • Facilities: 7 bathrooms • Earthquake-proof building • Earthquake-proof building 0m N The Community Settlement Plan (CSP) helps communities identify their own needs and incorporate disaster risk reduction and management strategies into their own spatial plan. Here, a village spatial plan shows evacuation sites and escape routes for Purbayan Village in Kotagede sub-district, DIY. The Community Spatial Planning process under the CSRRP/Rekompak project has helped more 28 than 265 villages to assess risks and prepare for potential disasters. BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS Recovery of Livelihoods The JRF’s innovative livelihood Recovery program is nearing completion. The GOI and JRF identified the need for livelihood recovery efforts to support the large number of micro, small and medium enterprises (MSMEs) impacted by the 2006 earthquake and issued a call for proposals in 2007. The JRF has worked with two international organizations, the International Organization for Migration (IOM) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, formerly GTZ), to implement two separate but related and complementary projects designed to support the recovery of livelihoods. These projects focused on improving access to finance, replacing assets, and providing technical assistance and enhanced business skills to more than 15,000 micro, small and medium enterprises (MSMEs) in the affected areas. The IOM-implemented project closed in June 2011 and the GIZ project is completing its final activities and will close on September 30, 2011. The JRF livelihoods Recovery projects have produced significant results in supporting MSMEs in Central Java and DIy. Setting up microfinance and revolving loan funds in a post-disaster situation is particularly challenging due to the need to quickly reach beneficiaries while at the same time ensuring stringent accountability mechanisms are in place. The IOM livelihood recovery project began implementation of technical assistance and asset replacement components in late 2008, and the GIZ- implemented project began implementation of its access to finance and technical assistance activities in May 2009. Both projects were able to scale up quickly to not only reach but exceed their targets. The initial target of assisting 3,300 earthquake-affected micro and small enterprises through IOM’s livelihood recovery project was met during the first phase of the project. In October 2010 additional financing of US$1.5 million was approved to scale up and reach an additional 1,000 beneficiaries. By project closing in June 2011 the project had exceeded these revised targets by assisting more than 4,300 micro and small enterprises (MSEs) with asset replacement and capacity building in technical and business skills. The GIZ project has also shown remarkable results. Once the necessary institutional arrangements for the revolving loan funds were in place, the project was able to assist more than 10,000 total beneficiaries with financial A group of women in Boyolali, Central Java proudly display snack items they produce out of cassava flour. The group is one of many which receive technical and business development assistance through the GIZ Livelihoods Recovery program. (GIZ collection) 29 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 and/or technical assistance by June 2011, surpassing the initial targets by more than 1,200. An assessment of the impact of these interventions is currently underway. Technical assistance has helped more than 6,200 MSMEs to develop their businesses. The IOM Livelihood Recovery project provided technical assistance, marketing support, and business development skills training for 4,300 micro and small enterprises affected by the earthquake in Yogyakarta and Central Java, with positive impact on incomes and high levels of beneficiary satisfaction. Over 87 percent of project beneficiaries reached their pre-earthquake operating capacities, sales and profits by the end of the project, with 77 percent exceeding pre-earthquake levels. IOM also replaced productive physical assets such as equipment, livestock and facilities damaged or destroyed in the disaster for individuals, groups and communities, with more than 95 percent of these assets beings utilized by beneficiaries at project closing. The GIZ project has also been successful in increasing incomes of beneficiaries through its technical assistance activities. The project provides technical assistance to both MSEs and medium enterprises in production skills, entrepreneurship, sales and marketing. By June 2011 GIZ’s technical assistance activities had helped over 1,800 MSEs and 40 medium-sized companies to improve their technical and business skills. Important outcomes have been achieved in improving access to finance for earthquake-affected MSMEs. Through the GIZ Livelihood Recovery project’s access to finance activities more than US$5 million has been disbursed to 26 participating microfinance institutions (MFIs) by June 30, 2011 as part of a revolving loan fund to provide much-needed access to finance to MSEs for rebuilding of businesses. Under the component which promotes medium-sized enterprises, 42 companies have received continuous TA, and loans worth approximately US$419,600 had been disbursed to 22 companies. The project actively sought out MFIs that could specialize in group lending, such as Badan Usaha Kredit Pedesaan (BUKP, or Rural Credit Facility) in DIY, in order to reach marginalized beneficiaries outside the formal banking sector who might not otherwise meet the requirements for loans. The project has successfully accelerated loan disbursements to beneficiaries previously considered “non-bankable� using this approach. By June 30, 2011, more than 10,000 MSEs had received loans through the program. Permodalan Nasional Madani (pNM), a government-owned finance institution, serves as the apex institution for the post-disaster revolving loan funds under JRF. PNM was selected as the apex institution for the revolving loan scheme due to its mandate to support MSMEs and its suitability for managing the revolving loan fund after the project and JRF closure. Institutional arrangements with PNM took some time to put in place, but since mid-2010 funds are being channeled to MFIs such as the Bank Perkreditan Rakyat (BPR) and cooperatives, to serve those impacted by the Java earthquake. Through these arrangements the revolving loan fund set up through the JRF will continue to provide access to finance to this target group for at least 10 years after the project ends. Local government is expected to monitor the continued use of these funds after the project closes, and thus strengthened local government capacity for this purpose is also an anticipated impact of the project. Local government commitment to these arrangements is critical for continued long term impact on current beneficiaries. The JRF livelihood Recovery projects provide much needed economic revitalization support for women. Small and microenterprises operated by women in the handicrafts and food processing sectors were particularly badly affected by the earthquake. More than 40 percent of the beneficiaries of both IOM’s technical assistance activities and the recipients of microfinance loans under the GIZ project are women, exceeding the targets of 30 percent. JRF support has provided these women entrepreneurs the 30 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS resources and skills to not only resume their previous livelihood activities but to improve their businesses and income. As a result, women’s decision-making power and influence in their homes and communities have also increased. Capacity building has been an important area of focus of the JRF livelihoods Recovery projects. Both projects emphasized capacity building for local government in their exit strategies. A portion of IOM’s additional financing was used to address needs and gaps identified by the local governments of Yogyakarta and Central Java to ensure lasting economic recovery. These efforts included workshops and training for local government and civil society stakeholders in effective livelihood project management and implementation approaches and in Community-Based Disaster Risk Management (CBDRM)/Disaster Risk Reduction (DRR). The project’s DRR approach included both direct training for communities aimed at reducing risk exposure for MSEs as well as training local government and civil society organizations on integrating DRR aspects into development A woman receives technical training from GIZ to produce home accessories. Such assistance was provided by IOM and GIZ to more policies, planning and programming. The than 6,200 MSMEs in 25 villages in coordination with seven district governments, exceeding original program targets. technical assistance for CBDRM/DRR was (GIZ collection) particularly relevant for local government and civil society groups during the response to the eruption of Mount Merapi. Similarly, additional financing provided to the GIZ livelihood recovery project has supported the project’s exit strategy by building capacity of both microfinance institutions and the local government to manage the revolving loan funds after the project ends. The JRF livelihoods projects are generating important lessons learned. Both the IOM and GIZ projects have designed innovative approaches to meeting the livelihood recovery needs of MSMEs in post-disaster situations and have resulted in positive outcomes. These projects provide good models which could be implemented with less start-up time in the future. The projects also identified some regulatory constraints to implementing effective access to finance projects targeting the poor, with follow up to address these issues under consideration. The government’s National Community Empowerment Program, PNPM, has used lessons learned from the JRF Livelihood Recovery projects in creating a revolving fund window for responding to post-disaster needs for livelihood recovery. The lessons learned from these two innovative projects will be disseminated both within Indonesia and globally so that these experiences can inform the design of livelihood recovery programs in future post-disaster situations. 31 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 JRF Brings “Organic farming helps Livelihoods the local community and especially women because it Recovery to provides an occupation that brings in extra income.� Small Farmers Bu Yuni, organic farmer In two different villages impacted by the Java earthquake, two freshly- minted organic farmers are making the most of the training and assistance they received through IOM’s boost profits. Such benefits continues to grow, he will save Livelihoods Recovery Project would be a welcome relief handsomely on production with support from JRF. after damages suffered from costs during the three annual the Java earthquake. The tiled harvests—adding to his IDR Switching to fertilizers sourced roof of Pak Soeharto’s house 1.8 million (US$210) profit per locally and made of natural collapsed in the earthquake, harvest. Where he formerly waste will not only benefit while Bu yuni’s house cracked paid IDR 240,000 (US$28) the environment, but also so badly that her family was for four small bottles of reduce costs and, in turn, forced to live in emergency chemical fertilizer, he now tents for a month. expects to use four liters of organic fertilizer at IDR 10,000 Both Pak Soeharto and Bu (US$1.20) per cultivating yuni are leaders in their season. communities—Soeharto serves as secretary of a group His business acumen of 29 farmers in Sukoharjo sharpened by business Village, and yuni is treasurer of development training, Pak one of four beneficiary groups Soeharto says the trainings in Sumberharjo, yogyakarta “really helped us organize our province. With the training bookkeeping and taught us they received in organic how to calculate spending and farming methods and business earnings, which is something “They really helped us development, the farmers have that we weren’t familiar with organize our bookkeeping seen the benefits of a more before.� and taught us how to eco-friendly approach and now calculate spending and expect substantially improved Bu yuni has also experienced earnings, which is something results. an upswing in profits; sales that we weren’t familiar in this early phase of her with before.� Pak Soeharto estimates that business added an extra IDR Pak Soeharto, organic farmer while the cost of chemicals 150,000 (US$17.50) to her 32 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS monthly income. “Organic Pak Waluyo was one of while standing beside bags full farming helps the local many farmers who attended of rice in the front room of his community and especially the official opening of the house. His previous harvest women because it provides an rehabilitated irrigation system witnessed an increase in yield occupation that brings in extra built by the IOM’s livelihoods from 800 to 1,200 kg. income,� she says. Recovery project with support from JRF. Built by male and Strengthened further by As she gazes out at her female laborers from the local the technical trainings they vegetable garden through the community, the rehabilitated received from the project, window at the front of her system now provides water Kebon’s farmers are looking house, Bu yuni dreams of big to 37 hectares of arable land, forward to future growth. plans for the future—plans representing a 30 percent as big as the ever increasing boost in production. A further “The improved irrigation demand for organic products. benefit: operating costs channel helps us greatly. It have declined, amounting to easily supplies farmers with “I dream of being able to offer savings of IDR 400,000 (US$47) sufficient water in the third a bigger and more consistent per farmer per year. growing season (the last supply of organic vegetables, four months of the year)—a and of having my own Pak Waluyo hoards rice time when water is usually brand so I can market them temporarily to exploit the price hard to find. That means our to supermarkets and retail rises when overall supply productivity, and therefore markets.� decreases. And there is much our income, will definitely more of it to hoard, he says increase.� Years of hard work can be lost in a matter of seconds— S.T. Waluyo knows only too well. Not only was his house destroyed in the earthquake, but the irrigation system on which his farming business relied was damaged extensively. With no place to live and unable to earn an income, his new “The improved irrigation life was not one he had ever channel helps us greatly. It imagined. easily supplies farmers with sufficient water in the third Farmers suffered trauma after growing season (the last the earthquake not only due to four months of the year)—a the fact that their houses were time when water is usually damaged, but also because hard to find. That means our of the deterioration of the productivity, and our income, will definitely increase.� infrastructure that supported S.T. Waluyo, farmer their livelihoods, like irrigation channels. 33 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 ChaPteR 3 The handicrafts production sector was among the worst hit by the 2006 earthquake. Now most have recovered and new businesses continue to grow. This craft producer, a beneficiary of the IOM Livelihoods Recovery Project, is packing dried flowers for export. (GIZ collection) 34 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS JRf finances S even donors have contributed a total of US$94.1 million to the Java Reconstruction Fund. Contributions were received from the European Union, the Netherlands, the United Kingdom, table 3.1. Source of Pledges and Cash Received European Commission Government of PLeDGeS anD CaSh ReCeiveD US$ miLLion 51.17 % 54% 12.00 13% the Asian Development Bank, and the Netherlands governments of Canada, Finland and Denmark Government of 10.77 11% United Kingdom for the reconstruction and rehabilitation of Asian Development Bank 10.00 11% the earthquake and tsunami affected areas in Government of Canada 6.53 7% Yogyakarta Special Region, Central Java and Government of Finland 1.99 2% West Java. All donor pledges have been received Government of Denmark 1.60 2% in full by the JRF. Table 3.1 shows the funding Total Contributions 94.06 100% provided by each of the donors. An additional US$4.5 million is expected in income earned on investments of JRF funds by the JRF closing date. The investment income is added to the total pool of funds. The program administration and project preparation and supervision costs are projected to total US$3.3 million for the life of the JRF. These costs are anticipated to be fully covered by the investment income. Many households were forced to sell their livestock in the aftermath of the earthquake in 2006 in order to meet emergency needs. The asset replacement component of IOM’s Livelihood Recovery Project has helped livestock and producers in other sectors to not only restore but in many cases expand on their pre-earthquake productivity. (IOM collection) 35 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 The closing date of the JRF has been extended to December 31, 2012. An extension was requested to allow a strategic response to the recent Mount Merapi eruptions in late October 2010 affecting Yogyakarta and Central Java to be implemented. This extension was approved by all donors and has been formalized by amendments to contribution agreements. allocations and Disbursements to Projects JRF funds are fully allocated with a total of US$94.7 million to be provided to the five projects in the JRF portfolio. Of this, US$91.3 million, or 96 percent of allocated funds, has been disbursed to the projects, as shown in Table 3.2. table 3.2 Project Disbursement and Expenditure as of June 30, 2011 in US$ miLLion DiSBURSement PRoJeCt GRant vaLUe to PRoJeCtS exPenDitUReS Housing and Community Recovery 77.44 75.64 73.58 Transitional Housing Projects - CHF 1.27 1.27 1.27 Transitional Housing Projects - IOM 1.05 1.05 1.05 Community Settlement Reconstruction and Rehabilitation Project 75.12 73.32 71.26 (CSRRP) - MPW Recovery of livelihoods 17.24 15.63 16.33 Access to Finance and Capacity Building for Earthquake Affected 5.98 4.87 5.97* Micro and Small Enterprises (JRF Livelihood Recovery – IOM) Livelihood Recovery in DI Yogyakarta and Central Java 11.26 10.76 10.36 (JRF Livelihood Recovery - GIZ) Total Allocation to Projects 94.68 91.27 89.91 *Project costs were pre-financed by the Implementing Agency, hence project spending exceeds current disbursement to project. US$77.4 million or 82 percent of JRF funds have been committed to reconstructing housing and community infrastructure. Two Transitional Housing Projects completed activities in 2008 at a cost of US$2.3 million. The budget for CSRRP, the housing and community infrastructure project, was increased to US$75.1 million during the past year. As of June 2011, about US$75.6 million or 98 percent of funds allocated to the housing and community infrastructure sector have been disbursed. The JRF has allocated US$17.2 million to projects focusing on the recovery of livelihoods, an amount that accounts for approximately 18 percent of JRF allocations. Through GIZ, US$11.3 million in allocated funds support a project that contributes to the GOI’s initiatives to assist micro, small and medium enterprises (MSMEs) affected by the earthquake to revitalize their businesses. The project also aims to re-integrate affected low income communities into economic life through technical assistance and access to finance. In addition, US$6 million is allocated through the International Organization for Migration (IOM) to a project which provides asset replacement and technical assistance for micro and 36 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS small enterprises (MSEs). As of June 30, 2011, US$15.6 million has been disbursed to these projects. Project expenditures A cumulative total of US$89.9 million has been spent by projects implemented under the JRF portfolio, totaling approximately The identification of community infrastructure to be constructed, 98% of funds disbursed to these projects. such as this water drainage system is an outcome of the Community Settlement Planning Process, which uses an inclusive participatory Projects in the housing and community approach. infrastructure sector have spent US$73.6 (CSRRP/Rekompak collection) million which is 97 percent of project disbursements. Expenditures for the livelihoods projects total US$16.3 million, amounting to 105 percent of project disbursements. IOM pre-financed its project activities thus project spending exceeds disbursement to the project. outlook With the additional financing and extension of the JRF closing date, the CSRRp project will implement activities until June 2012. The additional financing for the recovery of communities affected by the Merapi eruptions was divided into two phases. The first phase was implemented until June 2011, and allocated US$1.7 million to respond to the effects of the earthquake on villages where JRF projects were already being implemented at the time of the eruptions. After the JRF was extended to December 31, 2012, a further US$1.8 million was made available for the second phase to expand assistance to additional villages and will be disbursed to the project during the remainder of 2011. The project is expected to fully spend all allocated and disbursed funds. The JRF’s work in the area of livelihoods recovery is nearly completed. The IOM project completed its objectives and closed as scheduled in June 2011, and the GIZ project will close in September 2011. Both projects are completing final reporting on expenditures, and it is expected that allocated funds will have been fully spent. JRF funds are now considered fully programmed. Final allocations were made to the three active projects during the last year. Additional funds of US$3.5 million were allocated to the CSRRP project to respond to the needs of Merapi victims. The two Livelihoods Recovery projects were also allocated a total of US$2 million in additional funds to scale up activities and finalize their exit strategies. As of June 30, 2011, the JRF has approximately US$0.6 million remaining, or about 0.5 percent of total JRF funds. 37 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Pak gito’s hopes for his JRF Loans trainings covering design skills and production techniques, business are to have a steady and Technical and was put in contact with regional companies flow of orders and remain healthy so that he can keep Assistance working for the export market. Exhibiting some of working. And if, in their most confident moments, they dare Help Small his new furniture samples to imagine it, both Pak gito Businesses at yogyakarta’s 2010 Export Expo also gave him his first and his wife hope to earn enough money to pay for the Recover and experience of direct contact with potential buyers. schooling of their children up to the university level. Thrive He also received an electric saw, which he now uses as far Pak Gito, Carpenter, grogol Village, Sukoharjo District, Central Java Like many carpenters in Grogol village in the Sukoharjo District of Central Java, Pak Gito learned his trade from his father. “I worked alongside him for many years until I had the courage to try it on my own,� he says with typical modesty. From then until the Java Earthquake in 2006, Pak gito made furniture for a small company close to his home. “The earthquake interrupted “Before, I had to rely on my us, we had to take time off to boss to provide me with help our neighbors fix up their tools. Now I can work on my own.� homes, just as they helped us Pak Gito, carpenter too…but then there weren’t as many orders coming in,� he explains. into the night as the neighbors and his wife permit. “Before, Thanks to the livelihood I had to rely on my boss to Recovery project implemented provide me with tools. Now I by gIZ with support from can work on my own,� he says. JRF, Pak gito participated in 38 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS Bu Parsiawati, producer of Telur asin are duck eggs provincial Regulation. With salted duck eggs, piyungan which are wrapped in a ball of support from gIZ’s livelihood Village, gunung Kidul soft clay mixed with salt for Recovery program, they two weeks and then cooked. serve clients considered Bu Parsiawati says she has They were traditionally used to be “unbankable� by always been independent and by sailors and travelers on other financial institutions. that’s the way she likes it. long trips because the salt The revolving loan funds With help from the Livelihoods preserves them, making them established under the JRF Recovery Project implemented edible for up to a month after are expected to continue by GIZ with support from JRF, being treated. Today, they are to assist disaster-affected Bu Parsiawati has been able still a very popular snack for small entrepreneurs like to maintain her independence. long bus and train journeys. Bu parsiawati well after the Here’s her story: project ends. Bu parsiawati got off to a good like so many other Indonesian start with all the ingredients families, Bu parsiawati lives for a successful small apart from her husband for business: she was familiar long periods of time as he with the salting process from travels around the country her days in the cooperative; working in road construction. she had friends in the market While she misses him, she and the time and motivation says that she can only make needed. She started small, the best of it. gradually plowing her profits back into the business to buy Her independence extends gradually increasing numbers to her own work too. Though of eggs. she started off in a village cooperative with activities Then the earthquake collapsed “I got a small loan of IDR ranging from sewing to parts of her house, including 500,000 (US$57) from the farming and cooking, she left the kitchen, and wiped out her BUKP to start again.� the organization because she whole stock of eggs. Bu Parsiawati, independent thought it was doing a poor business woman job of marketing what they “If the earthquake hadn’t produced. “I got frustrated,� come, I wouldn’t have needed she recalls, laughing. “I felt I a loan, everything was going could do it better.� smoothly until that point,� she says. “I didn’t have any In time, she began to focus collateral to get a bank loan on one of Java’s favorite food so I got a small loan of IDR products, telur asin (salty 500,000 (US$57) from the eggs]. “They always sell…I BUKp to start again.� rarely have to bring any back home when I take them to the BUKp, or Badan Usaha Kredit market,� she says. Pedesaan, are a type of micro- finance institution established in yogyakarta based on a 39 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 ChaPteR 4 The JRF will continue work in Central Java and Yogyakarta until June 2012. Here, a villager passes by bamboo fences built by a JRF- supported medium enterprise. (GIZ collection) 40 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS Bringing the JRf to Conclusion and Looking ahead T he JRF has made a significant contribution to the overall reconstruction in response to the earthquake and tsunami that led to the formation of the program in 2006. All JRF projects have successfully delivered on their targets related to these disasters. Over 15,000 permanent houses have been built and nearly 7,000 temporary houses provided shelter while families were waiting for their permanent homes to be constructed. Through the community planning process supported by the JRF, 265 villages are better equipped to cope with natural disasters. More than 15,000 micro, small and medium entrepreneurs have received access to finance and/or technical and business development assistance to enable them to not only recover but in most cases improve upon their pre-earthquake livelihoods. In October 2010, disaster once again struck Central Java and yogyakarta, in the very areas already devastated by the May 2006 earthquake. As the three active JRF projects were moving towards their closing date of June 30, 2011, the eruptions of the Mount Merapi volcano created a new set of challenges for the region. The central and provincial government requested JRF support for reconstruction after the Merapi eruptions. The JRF Steering Committee responded to this request by allocating the remaining US$3.5 million in JRF funds to the CSRRP/Rekompak project for Merapi eruption recovery. The closing date of the JRF was extended until December 31, 2012 in order to allow time to carry out this work. The CSRRP project was extended to June 30, 2012 for strategic, targeted support to communities impacted by Mount Merapi’s eruptions. The affected communities have demonstrated that they are now better equipped to respond to the frequent disasters to which Java is all too susceptible. For several weeks, Merapi’s eruptions disrupted life in the region, forcing thousands of people to flee their homes. Merapi’s eruption left hundreds of communities to cope with the aftermath of a new and different type of devastation. The three active JRF projects assisted local government and civil society in the area with the response. Community infrastructure constructed under the JRF’s CSRRP provided evacuation routes and assembly points for many people affected by the eruptions. Previously conducted evacuation drills ensured that communities had a better knowledge of evacuation procedures than was the case during the 2006 earthquake. These outcomes of the JRF’s interventions helped to lesson the impact of Merapi’s eruption in many places, but the disaster also highlighted that further work on disaster risk reduction and preparedness is still needed. These needs include both institutional strengthening to help local governments be better prepared to manage disaster response as well as more emergency infrastructure to cope with evacuation and emergency response. 41 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 The JRF portfolio continued to perform well despite the disruptions caused by Merapi. The Livelihoods Recovery project implemented by IOM completed all activities and closed as scheduled on June 30, 2011. The GIZ-implemented Livelihoods Recovery project is carrying out the final phase of its exit strategy and will close on September 30, 2011. Support for rehabilitating livelihoods was scaled up during this final year with additional financing to provide greater opportunity for capacity building to enhance the sustainability of the projects, and to reach more beneficiaries. The IOM project’s exit strategy included strengthening the capacity of communities, local government and civil society to mitigate impacts from future disasters. This strategy proved particularly relevant and timely: disaster preparedness training and workshops were underway as the Merapi events unfolded. Additional financing for the GIZ livelihoods recovery project is being used for capacity development and to document project impacts. The impacts of these projects on the economic recovery and empowerment of women micro and small entrepreneurs has been especially significant. Both projects have met or exceeded their targets and positively affected incomes and livelihoods, garnering high rates of beneficiary satisfaction in the process. The CSRRp/Rekompak will continue its community-based approach in meeting the needs of communities affected by the Merapi eruptions until June 2012. The project’s CSPs will provide the basis for selecting community infrastructure activities to implement in the 88 villages included under the project’s additional financing. Additional investments of approximately US$220,000 per village have been allocated for the reconstruction and rehabilitation of small-scale tertiary village infrastructure damaged or destroyed by the eruptions of Merapi. The project is scheduled to close following the rapid reconstruction response to the Merapi eruptions, but the CSRRP is expected to have a lasting impact on community disaster risk management through the community planning approach. Local governments have already demonstrated their commitment to the CSP process by allocating their own funds to facilitate the community planning process during the project’s second phase. The JRF has fully programmed all available funds. The US$94 million in funding has been allocated and a full utilization of these resources is expected. The JRF’s allocation of US$3.5 million in additional financing to the CSRRP for responding to the Merapi eruptions has effectively allocated all available JRF funds to projects. All funds allocated to projects are expected to be fully disbursed and spent by project closing dates, with the last project, CSRRP, completing its final phase of activities by June 30, 2012. The JRF offers important lessons for future post-disaster response programs. The JRF has been in the unique position of responding to three different kinds of natural disasters: earthquake, tsunami and volcanic eruption. The innovations developed through the JRF in the housing and livelihoods projects offer lessons for future post-disaster situations A new drainage system constructed in Pendowoharjo Village, Central Java. This is one of more than 4,400 community infrastructure projects completed as part of the Community Settlement Planning 42 (CSP) process. (CSRRP/Rekompak collection) BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS in Indonesia and around the world. The community-driven approach to housing reconstruction originally developed during the post-tsunami reconstruction in Aceh benefitted the Java reconstruction and has been adopted by the Government of Indonesia as a model in other post-disaster reconstruction efforts. Drawing on lessons from the CSRRP/Rekompak projects implemented under the JRF and the Multi Donor Trust Fund for Aceh and Nias provides an opportunity to mainstream disaster risk reduction and reconstruction through community based approaches into national programs. The livelihoods projects have developed an innovative approach for addressing economic recovery in the post-disaster reconstruction context. The livelihood projects took time to set up initially but they have also generated important lessons for designing similar economic recovery programs in a post disaster context. These lessons are already contributing to the institutional arrangements for post-disaster revolving funds to be implemented through the National Community Empowerment Program, PNPM, so that the program can be ready to respond to livelihood recovery needs when disasters strike in the future. The JRF will continue its commitment to support the post-disaster recovery of communities in Java until its closing date. The Merapi eruption presented a new area of need to which the JRF was able to quickly respond with its final commitment of funds. The last three projects have made sustainability of project outcomes, particularly related to disaster risk reduction and preparedness, an important priority in their exit strategies. The JRF will continue its support for the reconstruction of Java from its latest disaster through the CSRRP/Rekompak until the project closes in June 2012, and the JRF The livelihood projects helped changed the way farmers grow their itself will conclude all activities and close on produce. Many are now switching to organic farming. Above a green house in Sukoharjo Village, Central Java. December 31, 2012. (IOM collection) The varied nature of the several disasters that the JRF has addressed provides lessons to deal with earthquake, tsunami and volcanic eruption response. Many of the disasters that occur on a regular basis in Indonesia are also similar in magnitude of impact. This too provides lessons for disaster response fit to scale. The Government of Indonesia, taking lessons from the experiences in Aceh and Java, has now established the Indonesia Multi-Donor Fund Facility for Disaster Recovery (IMDFF-DR), a standing fund for disaster prevention and response activities. Lessons on prevention as well as response are being applied across Indonesia, and can provide valuable insights to inform post disaster support globally as well. 43 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Building Safer funded Community-Based Based on the CSps developed Settlement Rehabilitation for Srimartani Village, Communities and Reconstruction Project (CSRRP, or Rekompak). Subdistrict piyungan and Wonolelo Village in pleret through The CSp process brings Subdistrict, and Wukirsari Village in the Imogiri Community together community members Subdistrict, sixty nine Settlement to map their settlements, identifying areas suitable for beneficiaries were given the opportunity to move to safer Planning different land usage. This process is led by community ground. Some households have relocated to parcels of facilitators and aims to identify their own land, while other areas prone to potential beneficiaries were resettled on Citizens in three landslide- hazards so that action can village-owned land. prone villages in the Bantul be taken to mitigate future District of Yogyakarta possible disasters. Factors Bu Triyono, a beneficiary have been able to move taken into account include soil from Srimartani Village, was to safety thanks to the conditions, proximity to active relieved to feel safe from Community Settlement volcanoes and projected lava landslides. Many houses in Planning (CSP) process being flow paths, and availability of Srimartani Village are located implemented through the JRF water. on hillsides and are especially The JRF housing project has incorporated earthquake resistant building technologies into its construction methods. Above, core houses are under construction in a Merapi affected village. (Iwan Gunawan, The World Bank) 44 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS While villagers in Srimartani were not altogether keen “My house was destroyed to move, Wukirsari Village by a landslide. In addition to getting a house in a safer members have long hoped place, we now will have for help to relocate. The area water for our household suffers from landslides during use year round. I found this the rainy season and drought relocation program to be in the dry season. very helpful." Bu Siti Ngadiroh, CSRRP/ Rekompak beneficiary. “I believe the relocation program will be very beneficial for the people in landslide-risk areas. In addition to landslides, our region experiences drought during the dry season. I personally have had to supply water to villagers with a tank truck,� says Pak Bayu Bintoro, Kepala Desa of Wukirsari. prone to landslides in the And “when a few of the rainy season. In addition to villagers began to state their Thirty-six households in the steep slopes, the hillsides willingness to move to another Wukirsari Village have consist of rocky terrain that location, others who had relocated through the will not hold rainfall. Other been quite unwilling began to program. Although the homes are in areas prone to follow,� says Pak Ruspamuji, relocation was delayed by unstable soil conditions, where Kepala Desa (village chief) of heavy rain that slowed down landslides can happen anytime Srimartani. the building of new homes, even without excessive rainfall beneficiaries are looking or earthquakes. Despite being given a smaller forward to safer and more house, Bu Triyono is not convenient living conditions. Even so, Bu Triyono reports complaining, as her new that many in her community home is closer to the market, “My house was destroyed by a were unwilling to leave their making it easier for her to landslide. In addition to getting ancestral homes. buy groceries. She can also a house in a safer place, we cultivate her old land with now will have water for our “Apparently the saying of fruits and other crops for household use year round. I ‘sedumuk bathuk, senyari additional income. found this relocation program bumi’ lingers in the hearts to be very helpful,� says Bu of the villagers. It means no Of the 13 beneficiary Siti Ngadiroh, a satisfied matter how small the land is, households in Srimartani resident of Wukirsari. they will defend it at whatever Village, nine households cost.� were moved to Kembangsari Village, and four households A geological review of the area live on their own land, not helped villagers understand far from the village-owned the threat they lived under. relocation area. 45 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 annexeS: A product expo was held in May 2011 for JRF beneficiaries as part of the livelihood projects closing strategy. The event provided opportunities for them to display and market their products to local consumers. (GIZ collection) 46 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS Project Portfolio & map of JRf-funded activities fact Sheet 1: Transitional Housing Projects The Java Reconstruction Fund financed two The transitional shelters provided were in the transitional housing projects to provide safe and form of “roof structure kits.� A typical roof durable shelter to eligible earthquake-affected families structure kit consisted of a wind and weather- while permanent houses were being reconstructed. proof bamboo structure with a tile roof and was Grant Amount US$2.32 million (revised; assembled on the existing foundation of the originally US$6.64 million) collapsed house where possible. The structures Implementation Period December 2006 – August 2007 were designed for a minimum life expectancy Partner Agency World Bank of two years to provide safe and durable shelter Implementing Agency International Organization while permanent housing was being constructed. for Migration (IOM) and Cooperative Housing Some components of the kits were reused in the Foundation (CHF) International construction of permanent houses, and receipt Disbursements US$2.32 million of the transitional shelter kits did not impact the eligibility of beneficiaries to qualify for permanent housing assistance. The JRF’s two projects aimed at providing transitional housing have closed, having Major Achievements successfully met their objectives. The International Organization for Migration (IOM) A total of 4,790 transitional shelters were and the Cooperative Housing Foundation (CHF) provided through the JRF’s two Transitional International, two international development Housing projects. IOM provided 1,586 units and humanitarian aid organizations which were and CHF provided another 3,204, all of which operating in some of the earthquake affected conformed to the pre-agreed specifications. In areas, implemented these two projects with the addition, the JRF’s permanent housing project, same objectives. The JRF’s Mid Term Review CSRRP, also provided 2,489 transitional houses, found that the projects were highly relevant, bringing the total number of transitional houses complementing the Government of Indonesia’s delivered by the JRF to 7,279. The project very successful housing reconstruction program implemented by IOM closed in June 2007, with by bridging the gap between emergency shelter the CHF implemented project closing shortly and permanent housing. after in August 2007, after meeting the need for transitional housing of earthquake affected families. 47 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Five years after the earthquake, some transitional shelters remain in use, such as this small shop in a village in Central Java. (JRF collection) In the overall response effort, UN data indicates by meeting the needs of beneficiaries in bridging that close to 99 percent of transitional shelter the gap between emergency shelter and needs were met.4 The JRF’s contribution to the permanent housing. overall transitional shelter program was relevant and needed, filling the gap in need for adequate living shelters while permanent housing was Observations and Lessons Learned constructed. Transitional shelters are highly valued by The unprecedented speed of housing beneficiaries as a contribution to recovery. As reconstruction following the Java earthquake noted, over 95 percent of beneficiary households meant that fewer transitional houses were needed felt that temporary housing enabled them to than initially anticipated. The JRF’s Transitional resume their normal household activities while Housing targets were therefore revised to take permanent housing was being constructed, and into account the reduction in total number of this also speeded up the economic recovery of temporary shelters required. Although fewer the affected areas. transitional shelters were built than originally targeted, the two projects made an important The use of bamboo for the structures proved contribution to the overall reconstruction program highly successful. The units designed by IOM and CHF were tested for structural soundness 4 Implementation Completion and Results Report for CHF and IOM Roof Structure Project, June 2008 in the event of an earthquake by the Gadjah 48 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS Mada University. The lightness and flexibility of the material makes it ideal for constructing earthquake-resistant structures. There was no significant impact on the environment, as this renewable resource is widely available in Java and is biodegradable. By using bamboo, affected people were also discouraged from illegally harvesting timber to quickly rebuild their houses. Additionally, in the aftermath of the earthquake, these transitional structures psychologically provided a feeling of a safer structure than houses constructed out of concrete. Economy of scale impacted the unit cost of transitional shelters. With the considerable reduction in needs and targets, unit costs ended up being higher than anticipated for the transitional shelters. In addition, the last remaining beneficiaries targeted by this project were harder to reach, more scattered and more difficult to identify, resulting in higher time and transport costs. In large scale relief operations, JRF constructed a total of nearly 7,300 transitional shelters such as this after the 2006 earthquake. This contribution was though, it is common that this “last 10 percent� complimentary to GOI’s very successful housing recontstruction program. of beneficiaries are generally reached at a higher (IOM collection) average cost than the bulk of the beneficiaries. Key Achievements at Project Closing Number of roof structure kits delivered to beneficiaries that meet satisfactory basic Total: 4,790 technical quality IOM: 1,586 CHF: 3,204 Satisfaction rates of beneficiary households (both men and women) on ability to resume Men: 95% their normal household activities through the provision of transitional housing Women: 99% 49 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 fact Sheet 2: Community-Based Settlement Rehabilitation and Reconstruction Project (CSRRP, or Rekompak) CSRRP, implemented by the Ministry of Public Works, aims to rebuild earthquake-resistant houses and community infrastructure. The project also invests in disaster preparedness and mitigation in affected villages using a community-driven approach to planning, prioritization, and implementation. Grant Amount US$75.12 million Implementation Period December 2006 – June 2012 Partner Agency World Bank Implementing Agency Ministry of Public Works (MPW) Disbursements US$73.32 million A facilitator explains a Community Settlement Plan (CSP) for a relocated village in Central Java affected by the Merapi eruptions. (Iwan Gunawan, the World Bank) The Community-based Settlement allocated to the project. The project’s targets in Reconstruction and Rehabilitation Project construction of temporary and permanent housing (CSRRP, also referred to by it’s Indonesian have been met. The construction of more than acronym, Rekompak) makes up most of the 15,000 permanent core houses was completed JRF fund allocation. Based on the successful in 2008. The project’s second phase focused on implementation of a similar project in Aceh, preparing Community Settlement Plans (CSPs) the Government of Indonesia selected this that incorporate disaster risk management. This community-based model for the reconstruction activity was successfully completed by June and rehabilitation of Java. Project activities are 2011 with all 265 targeted CSPs prepared. The implemented in the two provinces affected by CSPs provided the basis for selecting community the May 2006 earthquake, DIY and Central Java, infrastructure activities to implement, as will the parts of West Java affected by a subsequent CSPs prepared for those villages affected by earthquake and tsunami later the same year, Merapi. and 88 villages affected by the eruptions of Mount Merapi in October and November 2010. The CSRRP provided a successful existing Altogether, CSRRP covers nine districts, working mechanism for the speedy mobilization of support in 270 villages in 60 sub-districts. With the Merapi to Merapi victims. The Additional Financing (AF) response, the number of villages in which CSRRP to the project for the Merapi response funds is working will increase to over 310. activities within the existing components of the project and directly contributes to achieving The project has four main components: the project’s overall development objective. All (1) Providing Housing Structures, (2) Recovering proposed activities follow the implementation Community Infrastructure, (3) Capacity Building arrangements that were already in place (for of Local Governments and Communities, and example, using training materials and guidelines (4) Overall Project Management. for facilitators that were already being used in villages served by Rekompak). The arrangements The CSRRP/Rekompak has completed its work in place for financial management, funds under the earthquake and tsunami phase of the disbursement and safeguards adherence were project, which accounts for most of the funds also adopted for the additional activities. 50 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS With the additional financing and extension reconstruction under the earthquake and tsunami of the JRF closing date, the CSRRP project phase was completed in 2008. The additional will implement activities until June 2012. financing allocated to the project after the eruption The additional financing for the recovery of of Mount Merapi will be used to reconstruct an communities affected by the Merapi eruptions additional 250 permanent core houses. was divided into two phases. The first phase was implemented until June 2011, and allocated Initially following the earthquake and tsunami, US$1.7 million to respond to the effects of the funds were made available to reestablish basic earthquake on 45 villages where the JRF was community infrastructure, which enabled working at the time of the eruptions. After the access to affected areas so that reconstruction JRF was extended to December 31, 2012, a work could take place. This facilitated a quicker further US$1.8 million was made available for response to the housing reconstruction needs. the second phase to expand assistance to 43 Additional key community infrastructure was additional villages. prioritized after housing needs had successfully been met. The project’s Community Infrastructure The Housing Structures Component, with component includes developing Community transitional housing shelters as a sub-component, Settlement Plans (CSPs) and mainstreaming prioritized meeting interim shelter as well as disaster risk reduction management strategies permanent housing needs. In line with the into these plans and the design of the community Government of Indonesia’s housing priorities, infrastructure. Based on the community providing permanent housing was of highest requirements and using a participatory planning concern. Work on this through the CSRRP got process, projects are identified and prioritized for underway early in the reconstruction efforts, and implementation. These projects include village was concentrated in 104 villages in Klaten district, roads and footpaths, retaining walls, water supply Central Java Province, and 64 villages in Bantul and sanitation facilities and other community- district in Yogyakarta Special Region. Housing oriented facilities. The JRF has constructed more than 15,000 earthquake-resistant core houses in Central and West Java and DIY in response to the 2006 earthquake and tsunami. Above, a family in Central Java poses in front of their core house constructed through CSRRP/ Rekompak. (JRF collection) 51 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 The capacity building component of the CSRRP The CSRRP provided earthquake-resistant core project funds community awareness training houses that beneficiaries could modify and finish and quality assurance activities. This component to meet their individual household’s needs. A finances housing task force teams to oversee technical audit by two leading universities (Gadjah project implementation, verify compliance with Mada University in Yogyakarta, and Diponegoro construction standards, provide capacity building University in Central Java) reported that the for project management at the community houses are seismic resistant and generally of level, and train communities in emergency good quality. The project reports that 96 percent preparedness and miti¬gation of future disasters. of the houses constructed meet the required Training sessions also relate to basic construction seismic standards. methods for housing, and the preparation of CSPs and Disaster Risk Reduction strategies. Basic community infrastructure has been restored under the earthquake and tsunami response phase and further investments in community Major Achievements infrastructure are planned as part of the response to the Merapi eruptions. A total of 4,403 Through the Housing Structures Component, community infrastructure activities have been 15,153 permanent core houses were built to initiated through June 30, 2011. These include earthquake resistant standards. This work was 846 roads, culverts and footpaths, 99 bridges, substantially completed by March 2008, with 400 water supply and sanitation activities, 1,550 minor maintenance works finalized by June drainage and irrigation channels, and 1,115 2008. Additionally, 2,489 transitional housing retaining walls built to mitigate future disasters. shelters were also provided in the earlier stages An additional approximately US$220,000 has of the project with the technical support of the been allocated per village for the reconstruction facilitators already employed in the areas. As and rehabilitation of small-scale tertiary village part of the activities being implemented under infrastructure damaged or destroyed by the the Merapi eruption response, thus far the eruptions of Merapi. reconstruction of a further 27 permanent core houses have been completed out of a targeted The CSP process is being implemented in 250. This brings the total number of core houses several phases. As of June 30, 2011, the reconstructed through the project to 15,180. preparation of CSPs had been completed in all 265 villages targeted under the earthquake and tsunami response phases. With the help of local government resources, the CSP process was replicated in additional villages in Central Java, DIY and West Java. With replication, facilitators and CSP preparation were funded by the local government, and funding for the implementation of good CSPs is provided through the JRF. All villages covered by the additional financing to support communities affected by the eruption of Mount Merapi will be required to revise or prepare new CSPs, which will form the basis for the selection of infrastructure projects eligible to receive grant funding. Other logistical support provided under the CSP component includes This irrigation system in Kalidadap Village, Yogyakarta was identified through the CSP process, and built with CSRRP/Rekompak funding. Communities prioritize projects for funding and construction through the CSP’s participative process. (CSRRP/Rekompak collection) 52 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS signage for evacuation routes, access roads, accountability, transparency, and effective and support to fire departments and waste targeting, and has led to high beneficiary management programs. satisfaction and a high degree of community ownership. Evidence of the strong community Preservation of the area’s cultural heritage ownership can be seen in the significant was incorporated into the CSRRP project. A contributions made by the communities, sub-component focusing on heritage was especially in the construction and completion implemented under the community infrastructure of the permanent housing, and community component in four villages in Kota Gede (DIY) involvement in identifying and implementing and two villages in Klaten. These activities were community infrastructure activities. identified through the CSP process under the tsunami and earthquake response work, and Through the capacity building component of the were initiated to address social and environmental CSRRP project, communities and facilitators are concerns related to the preservation of the unique trained in the preparation of CSPs and Disaster cultural heritage. Economic considerations were Risk Reduction strategies. To date, 17,906 training also taken into account in identifying the heritage- sessions and workshops on CSP preparation, DRR focused activities to be implemented. and construction methods have been conducted, with 521,306 community members participating. Village planning processes have shown significant Approximately 28 percent of these participants improvements with the implementation of the have been women. A further 1,537 community CSPs and inclusion of DRR. The community- meetings were held for women only. based approach used supports social Key Achievements as of June 30, 2011 Number of houses rebuilt to seismic-resistant standards 15,180 Number of housing community groups established 1,325 housing groups consisting of 15,222 households Number of CSP, DRR and construction training programs 17,906 and workshops held, and number of community 521,306 participants (28% women) participants Number of emergency preparation plans (CSPs) prepared 265 completed; 2 revised and updated Number and type of key community infrastructure under Total 4,403 infrastructure projects consisting of: construction or completed 846 village roads, culverts and footpaths 99 bridges 1,115 retaining wall projects 400 water supply & sanitation facility restoration projects 45 heritage restoration projects 40 meeting points for emergency evacuation 53 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 fact Sheet 3: Livelihood Recovery in DIY and Central Java (JRF Livelihoods Recovery–GIZ) This project is contributing to the Government of Indonesia’s initiatives to assist micro, small, and medium enterprises (MSMEs) affected by the earthquake to revitalize their businesses and to re-integrate affected low income communities into economic life. Implemented by the German organization, GIZ (Deutsche Gessellschaft für Internationale Zusammenarbeit, GmbH), this is one of two JRF projects supporting livelihood recovery in earthquake affected areas of Yogyakarta and Central Java. Grant Amount US$11.26 million Implementation Period May 2009 – September 2011 Partner Agency World Bank Implementing Agency Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ) Disbursements US$10.76 million as of June 30, 2011 The GIZ Livelihood Recovery project aims to Participating MSEs have improved their capacities through production skills trainings in various productive activities, such ensure a sustainable revitalization of micro, as the production of organic fertilizer as shown here. Training sessions were also held in basic entrepreneurship skills and small and medium enterprises (MSMEs) through business development to improve the sustainability of results. enhancing their access to working capital and (GIZ collection) sustainable income generating opportunities. MSMEs affected by the earthquake are assisted serves as the apex institution for the revolving through access to finance combined with loan funds, and a number of partner financial technical assistance. institutions including Bank Perkreditan Rakyat (BPR) and cooperatives. Technical assistance (TA) This is achieved through four components which is provided to eligible MSEs in close cooperation focus on: (1) Access to finance linked to technical with the district governments. Supporting TA is assistance for MSEs, (2) Defaulting loan work out also provided to participating financial institutions strategies for viable enterprises, (3) Restoring full to ensure broad outreach and the sustainable capacity and creating opportunities for improving use of the revolving credit fund after the project competitiveness of medium enterprises, and (4) closes. Project management, monitoring and evaluation for efficient implementation of the project. Under component 2, the project assists eligible small and medium enterprises (SMEs) whose The Access to Finance component provides loans are in arrears as a result of the earthquake technical and financial assistance to eligible micro to renegotiate or “work-out� the loans. Selected and small enterprises (MSEs). Loans are made microfinance institutions (MFIs) receive capacity available to MSEs through the state-owned PT building TA to address the needs of defaulting Permodalan Nasional Madani (PNM), which borrowers. The project also provides technical 54 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS and financial assistance to eligible medium while the demand for financial assistance for size enterprises with a view to improving micro and small enterprises (Component 1) competitiveness and increasing employment. remained strong. Therefore, the project requested to redistribute US$1.58 million from Components Component 3 provides both financial and 2 and 3 to Component 1. The redistribution was technical assistance to medium enterprises endorsed by the Steering Committee in October (MEs). Beneficiaries are assessed and provided 2010, allowing the project to support more MSEs with ongoing technical assistance in product at the grassroots level. development, marketing and promotion. Participating MEs are also assisted in applying for loans through the project’s revolving loan funds Major Achievements where appropriate. Targets under the access to finance component Following the project’s Mid Term Review have been achieved with a total of 10,056 loans conducted by the World Bank, the JRF Steering disbursed to MSEs by June 30, 2011. Loans Committee approved a request to redistribute amounting to US 5 million have been disbursed to funds across the components in order to better 26 microfinance institutions. The project scaled respond to the evolving credit needs of MSMEs. up rapidly once institutional arrangements were In the four years following the earthquake, in place and exceeded its target of 8,800 MSEs the need for financial assistance for defaulting receiving financial assistance. Disbursement of borrowers (Component 2) and the demand for project loan funds to MFIs was completed by loans for MEs (Component 3) had decreased, June 30, 2011, but MFIs continue disbursing loans Furniture, crafts and home décor produced by one of the medium enterprises supported by GIZ. Marketing initiatives supported by the project have helped MSMEs to access new markets. (GIZ collection) 55 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 Women receiving training in handicraft and garment production. GIZ provided production skill trainings to over 1,800 MSEs. (GIZ collection) to recipients using the project’s revolving loan developed for 582 of these debtors, out of which fund. 334 had so far fully repaid their loans by June 30. Training on credit analysis and management Technical assistance has been provided to 1,851 of defaulting loans has been provided for 147 MSEs in 25 villages in coordination with seven loan officers from 78 BPR. The training increases district governments, exceeding the original portfolio management capacities of loan officers targets. Participating MSEs have improved their with the aim to decrease loan loss risk and capacities through production skills trainings in the improve the soundness of the MFI. following productive activities: furniture/ carpentry, food processing/snacks, organic fertilizers, Under the assistance to medium enterprises handicrafts, weaving, batik, and garment component, 42 medium enterprises have been production. In addition to production skills training, supported with training and marketing assistance. 1,419 MSEs received follow-up training in basic 22 eligible medium enterprises have received entrepreneurship skills and business development loans as of June 30 amounting to a total of to improve the sustainability of results. Marketing US$419,600. Project monitoring indicates that the initiatives supported by the project helped these support for MEs has been effective in creating MSEs to access new markets. additional employment. Earthquake-related non-performing loans at Gender inclusiveness is embedded in all the 12 participating BPRs have been reduced components of the project. As of June 30, by 45 percent since the project began. Under 2011, 57 percent of borrowers and 44 percent component 2, the loans of 838 defaulting BPR of beneficiaries receiving technical assistance debtors were assessed and 759 out of these were are women, exceeding the target of at least 30 recommended for the development of individual percent participation of women. work-out strategies. Loan work-outs were 56 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS The project’s target does not include the A joint closing event for the JRF Livelihoods additional borrowers who will benefit from Recovery program held in Yogyakarta on June revolving funds after the first loans have been 13-14, 2011 was carried out in collaboration repaid. The revolving loan funds are anticipated with IOM. The event was well-attended by to continue benefitting livelihood recovery and government officials, donors, the media, and business expansion for MSMEs in Central Java other relevant stakeholders. and DIY for up to 10 years after the project’s closing date. As part of the project’s exit strategy, The GIZ-implemented Livelihoods Recovery local government capacity is being developed to project has generated significant lessons learned monitor the ongoing micro-finance activities after and provides a model that can be adapted for the project ends. Additional financing of US$0.5 livelihoods recovery in future post-disaster million to enhance this exit strategy and document responses. In Indonesia, the government’s impacts and lessons learned was approved National Community Empowerment Program by the JRF Steering Committee in February (PNPM) is now developing a revolving fund 2011. Capacity building for MFI management component and lessons from this project and local government institutions as part of and others have contributed to its design and the exit strategy has been completed through institutional arrangements. GIZ is currently workshops held at both provincial and district finalizing the project’s final impact assessment levels. Commitment from local government will and documentation of lessons learned and the be critical if these beneficiaries are to continue to project will close on September 30, 2011. have access to the revolving loan fund beyond the project end. Key Achievements as of June 30, 2011 MSMEs increase their net business income 74% (based on preliminary project assessments, final impact assessment is on-going) 10, 056 MSEs receiving financial assistance (i.e. loans) 1,851 MSEs receiving technical assistance MSMEs with BPR loans in arrears repay their • Individual loan work-outs developed for 582 MSMEs loan and restore their creditworthiness • 334 MSMEs have fully repaid their loans Strengthening MFI: 147 loan officers of 78 BPR trained on credit analysis & defaulting loan management The number of non-performing loans (NPL) caused by the earthquake drops. Participating NPL caused by earthquake decreased more than 45% (based on data BPR increase the actual loan portfolio quality. from 12 cooperating BPR) Assisted medium-sized enterprises (MEs) 39 of 45 MEs receiving assistance report increased employment in increase employment (including employment the value chain through the project support. in value chain) • 22 loans disbursed to MEs (nearly US$420,000) • 42 MEs participated in technical assistance and marketing assistance 57 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 fact Sheet 4: Access to Finance and Capacity Building for Earthquake Affected Micro and Small Enterprises (JRF Livelihoods Recovery–IOM) This project contributes to the GOI’s initiatives to beneficiaries combined with technical assistance, support the recovery of micro and small enterprises marketing support and small-scale infrastructure (MSEs) in Yogyakarta and Central Java and enable rehabilitation. them to reach at least their pre-earthquake capacity through enhanced access to finance and targeted assistance. The project objective is to be achieved Grant Amount US$5.98 million through the implementation of four project Implementation Period March 2008 – June 2011 components: (1) Assessment and Selection of MSE Beneficiaries, (2) Asset Replacement, (3) Partner Agency World Bank Assistance for Market Access, and (4) Capacity- Implementing Agency International Organization for Migration (IOM) building Technical Assistance. A planned access Disbursements US$4.87 million to-finance component was cancelled based on the as of June 30, 2011 recommendation of the project’s mid-term review in 2009. Funds allocated for this component were reallocated to the other four components implemented by IOM. The project completed all activities and closed on June 30, 2011. The IOM project was scaled up to reach more beneficiaries and increase impact through US$1.5 million in additional financing approved by the SC in October 2010. Through this additional financing, the project has extended its outreach to seven additional villages with 1,000 new beneficiaries for technical assistance and business development skills, for a total target of 4,300 beneficiaries. IOM’s exit strategy involved enhancing the IOM’s final impact assessment showed the project had brought about positive changes in the level of decision-making power of capacity of local government and civil society women in both their businesses and communities. More than 40 percent of the project’s MSE beneficiaries are led by women. in preparing for and mitigating risks from future (IOM collection) disasters, which became even more relevant following the Merapi eruptions. This is one of two JRF projects that aim to support the recovery of livelihoods in Major Achievements the earthquake affected areas in Yogyakarta and Central Java. The objective of this project, The project closed on June 30, 2010, having implemented by the International Organization for demonstrated significant achievements in Migration (IOM), is to assist at least 4,300 micro- supporting livelihood recovery in the targeted and small enterprises (MSEs) in restoring their areas. IOM had identified more than 4,400 MSE pre-disaster operating capacity in various districts in 25 villages through beneficiary assessments, of Yogyakarta and Central Java affected by the exceeding its revised targets of 4,300 MSEs. devastating May 2006 earthquake. The project Of these, nearly 42 percent are enterprises run targets 25 earthquake-affected communities or owned by women, compared to the target of providing asset replacements for MSE 30 percent. More than 87 percent of these MSE 58 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS were successful in reaching their pre-earthquake 2,200 beneficiaries to attend local and national- operating capacities, sales and profits by the level fairs and exhibitions. IOM also facilitated project end. networking events for beneficiaries through a variety of marketing and product innovation Under the Asset Replacement component the workshops. IOM worked with Village Promotion project has provided assets to more than 3,000 Teams to strengthen links with potential buyers beneficiaries covering a range of productive and promote the expansion of market access activities including livestock and vegetable opportunities. production, agro-food processing, zinc tile production, and various handicrafts such as batik The Capacity Building and Technical Assistance and silver jewelry. Community level assets and component encompassed government and civil public facilities restored include an irrigation society capacity building as well as technical system benefiting 127 farming households in assistance for MSEs. More than 4,300 MSEs Kebon village, Klaten district in Central Java, as participated in technical skills training for a range well as nine biogas plants, 52 communal livestock of production activities including livestock, pens, 18 production facilities, and community organic farming and handicraft production. In infrastructure including a community center, addition, the project provided MSEs with business and the rehabilitation of a drainage canal and development training which included bookkeeping community road. and the development of business plans. A course on access to finance was introduced to increase Beneficiary surveys indicate that improving participants’ knowledge regarding microfinance access to markets remains a high priority for institutions and their financial products in order MSEs. Under the Assistance for Market Access to enhance their ability to access micro-credit component, the project has facilitated more than for business expansion. The project supported The IOM Livelihoods Recovery Project has facilitated more than 2,200 beneficiaries to attend local and national-level fairs and exhibitions. IOM also facilitated networking events for beneficiaries through a variety of marketing and product innovation. (IOM collection) 59 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 The project’s strong communications and outreach efforts contributed to transparency and accountability in project implementation as well as positive public awareness about the project. The project operated a special SMS hotline as a transparency and anticorruption mechanism. No incidences of fraud were reported but this mechanism was frequently used to request information about the program. Project information is disseminated through JRF-IOM information boards erected in all target communities as well as through a project website and numerous publications. The project has received significant coverage in local, national and international media. The project conducted a networking event in Jakarta in May 2011 on the theme “Partnerships for Sustainability� designed to link beneficiary Local government officials conduct a joint site visit with IOM. Numerous workshops were conducted as part of the project’s groups to potential buyers and donors, including exit strategy to build local government capacity for supporting livelihood recovery activities after the project closes. representatives from private sector Corporate (IOM collection) Social Responsibility (CSR) programs. The final closing event for the JRF Livelihood Recovery the development of sector-specific producer program was held in Yogyakarta in June 2011 in groups through training and regular meetings. conjunction with the GIZ. IOM successfully nurtured links between these producer groups and relevant government The IOM-implemented Livelihoods Recovery agencies at the district level, enabling the groups project has developed a successful model for to become increasingly independent from project asset replacement and improving technical support as IOM gradually phased down activities. and business skills for a diverse group of By project closing many of the project initiatives microenterprises in a post-disaster context. The had been implemented by the local government, important lessons generated from implementation signifying good prospects for sustainability of the of this project in terms of building effective JRF investments after the project ends. partnerships with local government and beneficiaries to support livelihood recovery will be The JRF-IOM Livelihood Recovery project was disseminated widely so that they can inform the selected as one of 20 innovative projects world- design of similar projects in other post-disaster wide for crisis recovery by the World Bank’s settings. annual Financial and Private Sector Development Forum. The project was selected due to its success in providing innovative solutions to post-crisis challenges and in creating livelihood opportunities. The project was presented to participants at the forum in Washington DC in March 2010. 60 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS More than 4,300 MSEs participated in technical and business skills training through the IOM Livelihoods Recovery Project. Over 90 percent of the beneficiaries expressed satisfaction with the overall assistance offered through the IOM workshops. (IOM collection) Key Achievements as of June 30, 2011 Number of MSE assessed 4,456 (42% women) Number of MSE receiving and using assets in production 3,032 (49% women) Number of production/public facilities restored • 1 Community Centre • 1 Irrigation System • 18 production facilities • 52 communal livestock pens • 9 Biogas Plants • 150 m drainage system upgraded • 100 m community road rehabilitated Number of MSE with improved market access 3,876 (of which 40% are women) Number of MSE facilitated in fairs / expos 2,230 (of which 81 % are women) Number of MSE participating in technical assistance 4,342 (of which 41 % are women) Number of MSE with financial records 4,206 Number of MSE with business plans 4,049 (of which 43 % are women) Number of capacity-building workshops for local government conducted 43 61 JAVA RECONSTRUCTION FUND--PROGRESS REPORT 2011 map of JRf-funded activities in Central Java, yogyakarta and West Java LeGenD IOM GTZ Rekompak Province boundary Indonesia District boundary 62 BUIlDINg ON SUCCESS: EFFECTIVEly RESpONDINg TO MUlTIplE DISASTERS 63