Transcript
Integrating Poverty-Environment-Climate in Budgeting(Indonesia case)
Adi Nugroho DwiutomoDeputy Director for State Budget Expenditure
DG Budget – Ministry of Finance
Poverty and Environmental Initiative (PEI) Asia Pasific Regional Meeting Dhaka, 2 June 2016
Ministry of FinanceRepublic of Indonesia
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Background PEI IndonesiaA
The Role of Ministry of Finance in Sustainable Development
B
Outline
Integrating Poverty-Environment-Climate into Budgeting, Approach and Tools
C
Challenges and the Way ForwardD
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A
B
A. Background PEI Indonesia
C
D
• PEI Indonesia operationalized under SDF(Sustainable Development Financing) Project
• SDF project document signed in October 2014
• Environmental issues as an entry point as Indonesia’s development challanges
• Environmental activities is limited to Climate change and biodiversity
• PEI Indonesia collaboration with SIDA and BIOFIN
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Indonesia’s GHG emission is predicted to increase from 2.1 to 3.3 GtCO2e between 2005 and 2030 (Second National Communication, 2010)
Indonesia is vulnerable to changingclimate. Potential economic loss due to climate change and climate disaster in 2100 is predicted 7% from GDP (WB,2010, ADB,2010)
Indonesia is Mega-biodiversity country. Biodiversity is nationalcapital asset, but the full potential is undervalued and it is decreasing (MoEF, 2014)
Indonesia’s challenges toward sustainable development
The three action plans have not yet translated to budget documents at national and sub-national level.
No mechanism in place to monitor the budget allocation and tracking
Limited fiscal instrument to support actions.
CC Mitigation
3 Indonesia’s Action Plan
CC Adaptation
Biodiversity
Click to edit Master title styleB. The Role of Ministry of Finance in Sustainable Development
Fiscal Policies
Revenue Policies Expenditure Policies Financing Support
Domestic Resource mobilizationFiscal incentives and disincentives policies for strategic sectors
Budget optimization Budget reallocation to productive spendingTargeted spending
Direct investmentGovernment facility or risk guaranteePublic private partnership
Human DevelopmentHigh quality education, linkages between education and industrial needs, vocational education, innovation and productivity enhancement
Sustainable Natural Resource ManagementDownstream Industries, fisheries, agriculture
Inclusive GrowthPoverty AlleviationSocial protectionFinancial inclusion
Investment ClimatePublic and private partnership,Connectivity,Logistic,Technology
Macroeconomic StabilitySustainable growthPrudent fiscal and monetary policy, Incentives mechanism, purchasing power
Pathway towards sustainable development
SDF Contribution
Mid-term National Development Planning
Government Work Plan
State Budget
LM/A Strategic Plan
LM/A Work Plan
Budget Document
Presidential Decree on Budget Detail Budget Execution Document
5 Yr
1 Yr
1 Yr
President Platform
6
SDF Contribution
Indonesia Planning and Budgeting System
Temporary Ceiling
Trilateral Meeting
LM/A WPGWP
RKA-KLcompila-
tion
Assessment Forum
Draft State Budget
Preliminary discussion
FNDraft
Budget Law
Cabinet Meeting
Indicative Ceiling
Definitive Ceiling
RKA-KLadjustment
Budget doc assessment
Presidential Decree
DIPA
Budget Law
Process
Agree-ment
7
K/L
LM/ACommission
Budget Committee
RKA-KL
CCM CCM
CCM
CCM
CCM
CCM
Cabinet Meeting
Cabinet Meeting
LM/ACommission
Indonesia Planning and Budgeting System
CCMClimate Change Mitigation
Click to edit Master title stylePoverty and Climate Change Related Program in Indonesia’s Development Planning
Strategy Targets Mid Term Target
2016 Target
Poverty Comprehensive socialprotection program
Sustainable livelihood development
Basic service provision for poor
Decrease in poverty rate Decrease in gini ratio Decrease in unemployment
rate
7-8 % 0,36 4 - 5%
9-10 % 0,39 5,2 -
5,5%
Climate Change
Eco friendly agriculture activity, renewable energy utilization, domestic waste management
Private and people contribution for GHG emission
CC fiscal insentives Optimizing the
implementation of RAN API
Level of Greenhouse emissions reduction in 5 priority sectors (forestry, agriculture, energy, transportation, and waste)
Number of vulnerable areas which increase in resilience of people caused by CC and the National Action Plan for CC Adaptation. implementation
26%
15 areas
19,1%
4 areas
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*The calculation includes budget allocation associated with mitigation and adaptation of Climate Change, including on forestry, environment, and renewable energy sectors.
RESULT AT NATIONAL LEVEL : 2014 – 2015 Increase in Climate Change Responsive Budget Allocation
Source: Website DG Budget, Ministry of Finance
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Finding: No system in place to monitor and track the CC expenditure. Climate Expenditure Review was done manually. Sub-National Financial system is different with National.
AT SUB NATIONAL LEVEL : Climate Public Expenditure ReviewIncrease in Climate Change Responsive Budget Allocation
Jambi Province DI Yogyakarta Province Central Java Province
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0.3 0.3
6.5
0.1
0.7 0.5 0.9
5.3
7.4
0
1
2
3
4
5
6
7
2012 2013 2014
Bangka Belitung - Mitigation Public Expenditure (Billion Rupiah)
Mitigasi
Forestry and Peatland
Agriculture
Waste
Total Mitigasi
35.7
65.8
21.3
1.0 1.4
19.2
0.5
10.9 11.7
0.4 4.1
6.5 5.7 6.7 6.0
43.6
88.7
64.7
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2012 2013 2014
(Bangka Belitung, Adaptation Public Expenditure (Billion Rupiah)
Economy Security
Social and livelihood Security
Ecosystem security
Special District Security
Supporting System
Total Adaptation
Indonesia’s Actions towards Sustainable Development
BUDGET TAGGING:
Tracking climate change-related budget
PERFORMANCE-BASED BUDGETING
Prioritization of climate activity based on cost-effectiveness including poverty and gender benefits.
Monitoring effectiveness & efficiency of expenditure.
PRO POOR AND GREEN PLANNINGBUDGETING
Enhance Coordination National-SubNational
Issuance of fiscal policies, and mechanisms for financing prioritized and effective pro-poor and climate change activities
Pro Poor Priorities:• Social assistance• Basic services• Develop social liveihood
CC Priorities:• Forestry, Peat-land & Marine Resources
protection• Agriculture and Irrigation system
rehabilitation• Energy and Industry • Public Transport, Urban & Regional
Infrastructure• Education and Health • Disaster Management
Click to edit Master title styleSDF approach and tools
• Climate Public Expenditure and Institutional Review (CPEIR), CPEIR at national level combine with cost benefit analysis MFF Mitigation Fiscal Framework.
CPEIR Subnational : Bangka Belitung and NTT
• Climate Public Expenditure Review (CPER), CPER Subnational : Jambi, DI Yogyakarta, Central Java
• Institutional Context Analysis (ICA), in Bangka Belitung
• Gender Poverty Analysis (GPA), in Bangka Belitung
• Vulnerability Assessment (VA), in Bangka Belitung
• Climate budget tagging at national level : 6 line ministries (Min. Environment and Forestry, Min. Agriculture, Min. Industry, Min.Energy Minreal Resources, Min.Public Work, Min.Transportation)
Click to edit Master title style2014 Budget Tagging Aplication System embeded to State Financial System
BUDGET TRACKING REGULATIONMinistry of Finance Regulation No. 136/2014 regulates line ministries to tag activities/ output spending related with climate change through the budget system.
Click to edit Master title style2015 Budget Tagging Integrated to Performance Based BudgetingSystem through ADIK Aplication
13 achieved
MDGs Achievement
14 off track 36 on track
I. Goal 1a. Povertyb. Caloric intake
II. Goal 4a. infant mortality rateb. Children mortality rate
III. Goal 5a. Maternal mortality rate
IV. Goal 6a. HIV and AIDS
V. Goal 7a. CO2 Emissionb. Drinking waterc. Sanitation in rural area
VI. Goal 8a. Export import ration to GDP
Mapping to SDG
indicator
I. Goal 1 (Poverty)II. Goal 2 (StarvingIII. Goal 3 (Health)IV. Goal 3 (Health)V. Goal 3 (Health)VI. Goal 3 (Health)VII. Goal 7 (Energy)VIII. Goal 6 (Water and Sanitation)IX. Goal 6 (Water and Sanitation)X. Goal 17 (Means of
Implementation)
Some of indicator has already stated in Mid Term Development Planning Improvement on budget tagging can improve the information related to indicator
achievement
Click to edit Master title styleD. Challenges and The Way Forward
• Inter-ministerial coordination among the key Ministries (MoF, Bappenas, MoHA, MoEF)
• Improving capacity and compliance of line ministries
• M & E of the implementation of budget tagging
• The critical step for performance-based budgeting systems is toimprove indicators which reflect long term economic results as an implications of climate change and environmental degradation
The Challenges of Implementation both at National and Sub-National level
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Thank you
Ministry of FinanceRepublic of Indonesia
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