JAKARTA, July 14, 2011 – Over 60,000 rural villages are set to benefit from the Fourth National Program for Community Empowerment (PNPM Mandiri) in Rural Areas, which will be supported by a World Bank loan of $531 million. PNPM Mandiri, Indonesia’s largest community-driven poverty reduction program, works nationwide to provide funds to poor rural and urban poor communities so they can invest in their own development priorities. This loan will help the Indonesian government provide block grants and implementation support to almost 5,000 rural sub-districts.
PNPM-Rural IV builds on the success and lessons learned from its predecessor projects. The program empowers communities to identify and implement local development priorities. Communities are responsible for the management of funds and the actual building of infrastructure. The program supports communities to engage in inclusive planning and management processes and to put in place accountability mechanisms to ensure that money is well spent.
“PNPM has managed to empower communities directly to ensure that development funds are used for local priorities,” said Stefan Koeberle, the World Bank’s Country Director for Indonesia. “PNPM gives communities decision-making power and voice. It also educates communities to demand transparency from officials and to be accountable.”
Over the next two years, the loan will finance $531 million of the Indonesian government’s annual $1.3 billion PNPM-Rural program. The loan will be targeted towards helping communities improve local level governance and infrastructure such as village roads, and clean water and drainage systems. “The Government of Indonesia is the largest stakeholder in PNPM and has shown strong commitment to support demand-driven delivery and accountability,” says Susanne Holste, Lead Social Development Specialist, World Bank, Indonesia.
One of the most significant physical outcomes of PNPM-Rural has been a major increase in small-scale village infrastructure. PNPM and its predecessor, the Kecamatan Development Program initiated in 1998, have helped to build or rehabilitate over 71,000 kilometers of roads, 20,000 clean water systems, 16,000 irrigation systems, and 15,000 schools. While the physical infrastructure has been important, of equal significance is the change the program has brought in decision-making and management at the local level. The program advocates for inclusion of women and marginalized groups in development processes and actively promotes transparency and accountability. This has led communities to demand better service delivery in all spheres of development.
Indonesia currently chairs the Development Committee of the G20 and has put South-South exchange prominently on the agenda. PNPM is amongst the leading activities and has already hosted a delegation from Afghanistan to share experiences with representatives from the National Solidarity Program. In September a return visit is planned by officials from the Government and civil society members.
About the PNPM Support Facility: The World Bank in Indonesia manages a multi-donor support facility, the PNPM Support Facility (PSF), which provides key technical assistance and strategic oversight for PNPM Mandiri, the country’s flagship poverty alleviation program.
The PSF pools grants provided by Australia, Denmark, European Union, the Netherlands, United Kingdom and the United States to provide high-quality technical assistance, policy and planning advice, and targeted financial assistance to the Indonesian Government in support of PNPM Mandiri. A large share of the PSF resources is used to support sector pilots and disaster response through the PNPM’s community-driven development platform.
Capacity programs supported by the PSF engage a broad range of Indonesian players, including national and local governments, universities and research centers, and civil society organizations (CSOs).