Indonesia Country Programme Evaluation Main Findings

1. IndonesiaCountry Programme EvaluationMain Findings National Roundtable Workshop Jakarta, 21 March 2013 Independent Office of Evaluation

2. Objectives and Methodologies • Objectives: • Assess the performance of IFAD-GOI supported projects and related activities in the country, and their overall partnership; and • Generate a series of findings and recommendations to serve as building blocks for the preparation of the next results-based Indonesia COSOP • Methodologies: • CPE assesses: (i) project portfolio performance; (ii) non-lending activities including grants; (iii) COSOP performance, with the aim to evaluate IFAD-GOI partnership • Use of a six point rating scale to assess IFAD-GOI partnerships across several evaluation criteria

3. IFAD – Indonesia cooperation highlights • Total loan-funded projects approved: 15 (since 1980) • Total amount of IFAD funding: US$ 403.6 million • Counterpart funding (Contribution from Government and beneficiaries): US$ 214.7 million. Several co-financiers until 2000 • COSOPs: 1998, 2008 • CPE covers IFAD-GOI partnership from 2004-2012, inter-alia, including 7 most recent projects (two completed, one cancelled, three ongoing, one just approved), the 2008 COSOP, and country programme management

4. IFAD country strategy and operations • The 2008 COSOP has three strategic objectives: (i) boost on-and off-farm productivity, (ii) improve infrastructure, markets and financial services; and (iii) empower local communities • The COSOP targets poor rural households, ethnic minorities and other marginalized groups that lack productive assets and have limited off-farm employment opportunities • It targets areas with high incidence of rural poverty and where there are no major ongoing externally financed programmes • Mix of interventions: projects and non-lending activities • Only broad guidelines are provided for selection and focus of projects and non-lending activities

5. General Findings • IFAD-GOI partnership highly valued, reflects mutual trust and cordial relations • IFAD’s commitment to poverty reduction among the rural poor in Indonesia has been appreciated • GOI has reiterated its commitment to IFAD by doubling its replenishment contribution in IFAD9 (2011), as compared to IFAD8 (2008)

6. Findings – Portfolio Performance • IFAD-supported operations made encouraging achievements in social mobilization, participatory approaches , and gender • Mark progress has been made in terms of investments for the enhancement of social infrastructure • Agriculture productivity is not sufficiently at the core of the country programme • Small farmer agricultural productivity activities included in projects were crowded out by community mobilization and village infrastructure activities

7. Findings – Portfolio Performance (cont.) • Projects are complex with diffused focus • Risk analysis is not given adequate attention in the design of the portfolio or country strategy given remoteness, conflict and rapid decentralization • Little has been achieved in piloting and scaling-up innovations for enhancing agricultural productivity and value addition. Insufficient attention has been given to learning from successful closed operations. • Shift to direct supervision and implementation support by IFAD is very positive. More attention needs to be paid to this including the regularity of, and expertise included in, supervision missions.

8. Findings – Non lending activities • IFAD has not sufficiently heeded the 2004 CPE recommendation to pay more attention to non lending, yet Indonesia’s graduation to MIC status is likely to further enhance the importance of non-lending • Achievements in policy dialogue limited. Areas for policy dialogue in COSOP were numerous and not matched by the required level of resources • Partnership with other donors not strategic. Public-private partnership in its infancy. Notable exception: MARSin Central Sulawesi • Many activities related to knowledge management were included in the COSOP; not all have been implemented but a Knowledge Management and Communication Strategy for Indonesia has been developed, a significant step towards improvement • Grants supported project related activities but provided little additional leverage to enhance non-lending activities

9. Findings – COSOP Performance • The three strategic objectives in COSOP broadly relevant, but priority among the objectives not defined • COSOP was ambitious, did not provide strategic guidance for an effective IFAD-GOI partnership. Insufficient resources allocated to achieve COSOP objectives • GOI-IFAD activities do not form an integrated country programme. Synergies across projects, between lending and non-lending, and grants insufficient • IFAD has by and large acted as a project-based organization in Indonesia, and there is need for a paradigm shift i.e., focus on scaling up innovation and through effective non-lending activities

10. Findings – COSOP Performance (cont.) • Geographic coverage widespread, which has led to dilution of interventions constraining effectiveness, efficiency and sustainability. • Too many sub-sector’s were covered compromising technical depth of interventions • The opportunity cost of mostly focusing on Eastern Indonesia in recent years needs reflection, especially given potential (e.g., road corridors, services, etc.) in Western Indonesia • M&E systems are weak, and generate limited useful data or analysis for learning, project management, or knowledge management • Many key government counterparts for a relatively small organization like IFAD has constrained dialogue, communication and co-ordination

11. Findings – COSOP performance (cont.) • The IFAD-GOI co-operation has been adversely affected by lack of a country presence, with a Rome-based CPM. Plans for out-posting from HQs to Jakarta of CPM are a step in the right direction • 2008 COSOP management weak: COSOP not used as a living document with annual reviews; its results framework is complex; and COSOP MTR done late • IFAD appears not to have devoted the required management attention to its cooperation in Indonesia since around 2004-05 till more recently when a new CPM was assigned in 2011 and has been making good efforts to remedying the situation and strengthening partnership in general

12. Conclusion • The IFAD-Government partnership is important and there are ample opportunities to reinvigorate it for better results on rural poverty reduction. • Project impact on women, social empowerment and community development was positive. Impact on agricultural productivity was limited. More focus was needed on core agriculture activities, including building strategic partnerships. • Little strategic guidance was provided for non-lending activities. Grants were not fully tapped or linked to country objectives. • Management by IFAD has been one major determining factor. Strengthened IFAD country office and allocation of resources commensurate with COSOP objectives essential. Government capacity at local level insufficient. • Indonesia’s MIC status has implications for the focus of its future co-operation with IFAD, with added attention to south-south co-operation and knowledge sharing.

13. Recommendations The recommendations will be presented at the National Roundtable Workshop on March 21, 2013.