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How did the NRM2 team succeed in reinstating their program and budget and re-establishing NRM as a strategic objective after program cuts in 1998? The NRM2 team undertook a series of defensive measures over the last two years. They used concepts and NRM2 results to carefully tailor persuasive arguments for different audiences. They were able to convince non-ENV colleagues that NRM2 programs had been able to, and could continue to, contribute to DG (and economic growth-EG) objectives. The NRM2 team used these arguments to leverage support for their program from allies within USAID and tapped external allies to influence the priorities of USAID leadership.
In the two months following the resignation of Suharto, a series of intense negotiations over priorities took place among USAID senior management, the leadership of the Asia-Near East Bureau (ANE), mission management and the NRM2 team. It was clear that USAID assistance to Indonesia would no longer end in 2000. USAID leadership wanted to take a fresh look at what would be an appropriate strategy for Indonesia's democratic transition and economic crisis. They questioned the relevance of USAID strategic objectives and programs, including NRM2, which had been designed for the conditions prevailing under the Suharto regime. They considered an initial Washington plan to focus all 1998-2000 mission resources on elections but then decided upon four transitional strategic objectives. These objectives were democracy, anti-corruption, economic recovery and social safety nets. The anti-corruption objective was dropped within a few months.
The NRM strategic objective was lost during this time for several reasons. USAID leadership did not perceive NRM to be as "sexy" and current as issues related to elections, political party development and bankruptcy laws. In part, this was due to weak U.S. political commitment for sustainable development, inadequate political analysis for natural resource-dependent economies and bureaucratic resistance to cross-sectoral programming.1 Rather than viewing ENV as a fundamental part of political and economic development, USAID leadership usually conceptualized ENV issues as either "bugs and bunnies" biodiversity concerns or tedious U.S. regulatory requirements. For the agency's limited number of internal ENV champions, emergency response and transitional funding had always been easier to secure than money for more fundamental structural changes in policies and institutions. In addition, sectoral and DG program managers were accustomed to building bureaucratic "firewalls" to "protect" their programs from dilution.
In reaction to political instability, all of the expatriate staff were evacuated to Washington from May-June 1998. Initially, they worked on short-term work plans while the Indonesia staff and partners did the same in Jakarta. As soon as it became evident that DG objectives were becoming a mission priority, the NRM2 team moved into a strategic defense mode to protect their program and funding.
At first, the NRM2 team tried using traditional ENV arguments to justify continuation of NRM2. They focused on the global and national importance of Indonesia's biodiversity. They discussed the relationship of Indonesia's forests to global climate change. While these arguments did rally the support of NRM2's ENV allies, the NRM2 team learned that these ENV considerations held no currency in the mission's new plans.
To survive, the NRM2 team knew that they would have to link their work, both conceptually and practically, to the mission's four new strategic objectives -anti-corruption, democracy, economic recovery and social safety nets. The most compelling linkages were related to the first three objectives. The USAID NRM2 staff asked the NRM2 partners to identify examples of NRM2 successes and also new opportunities for the reformasi era. These examples were then re-packaged for USAID and mission leadership.
In a June 1998 concept paper, "The USAID/Indonesia Natural Resource Management Program, 'Resource Rights are Human Rights'" the NRM2 team laid out the conceptual arguments for linking NRM to DG and economic growth (EG) issues. For each of three areas, Rule of Law, Advocacy and Building Civil Society, and the Economic Crisis Response, the NRM2 team created a package that included relevant NRM2 work to date and the new opportunities.
General Arguments about Linkages
To justify program continuation, the NRM2 team laid out several general arguments that relate NRM work to the larger political economy. Most of the arguments relate to DG objectives. However, the positive role of NRM2 work for economic stability was also addressed because at that time, it was not clear if Indonesia's plans for democratic reforms and elections would progress. The successful NRM2 arguments included the following points:
Linking Human Rights and Natural Resource Rights.
A DG human rights agenda for Indonesia would be advanced by NRM2 work that helped communities assert their natural resource rights and secure government recognition. These tenure rights include ownership and access of land and sea rights. In Indonesia's rural-based economy, natural resource rights are human rights, particularly for politically and economically disenfranchised ethnic minority groups located in the Outer Islands.
Showing Democracy Results via Natural Resource Rights.
Democratic reforms are consolidated by early and visible democracy results. While elections are one tangible indicator, they only occur every few years. On a daily basis, rural residents are looking for more democratic environmental governance and more secure rights to natural resources. NRM2's work on improving community rights to resources could help to engage citizens in environmental governance and consolidate new democratic initiatives.
Improving the Rule of Law by Combating Natural Resources Corruption.
Corruption of any kind undermines the rule of law and democratic systems. Natural resources corruption, including cronyism and nepotism, was rampant during the Suharto administration. NRM2's anti-corruption work in the environmental sector could help to improve citizen confidence in the rule of law and serve as a model for other anti-corruption efforts.
Building Civil Society and Advocacy Capacity through NRM Partners.
DG objectives are strengthened by a balance of power among the government, private sector and civil society. Civil society is empowered through improved capacities and strategic relationships. With NRM2 support, civil society partners were able to strengthen the effectiveness of their own organizations, including in advocacy arenas. They were able to strengthen their relationships with other civil society organizations (including regional and local NGOs), government staff (local and national) and the private sector. These civil society capacities and relationships would be essential for the success of Indonesia's proposed decentralization reforms.
Stabilizing the Political and Economic Situation through NRM.
Indonesia's ambitious plans for democratization would be undermined by economic and political instability. At least half of Indonesia's population was already very poor and directly dependent on natural resources for their livelihood. The economic crisis would result in even greater rates of unsustainable natural resource exploitation by current residents, poor migrants and élites. Indonesia's long term development prospects would be undermined if its biodiversity suffered irreversible ecological damage. If the economy did not improve, there would be even greater political unrest resulting from conflicts over natural resources and political dissatisfaction. NRM2's efforts to improve livelihoods while conserving biodiversity and natural resources were essential to economic and political stabilization.
Arguments Packaged by Strategic Objective
The NRM2 team also re-packaged their work to address three of the mission's new strategic objectives:
Package 1 - Rule of Law:
The NRM2 team argued that their work on environmental rule of law issues had helped to combat corruption and contribute to democratic consolidation. NRM2 activities had already:
formulated reforms to reduce forest concession corruption,
helped small producers obtain a fairer price for non-timber forest products such as rattan through trade deregulation,
helped local communities gain legal recognition of their natural resource rights via community mapping, local ordinances and multi-stakeholder legal agreements or management plans,
investigated how to expand the access rights of communities to commercial state-owned forests through legal reform options,
used legal agreements to promote more equitable wealth distribution of coastal resources among government, industry and communities.
The NRM2 team identified several new rule of law opportunities work: repealing/re-writing the existing forestry law, democratizing authority for natural resource management and creating more effective judicial systems.
Package 2 - Advocacy and Building Civil Society2
The NRM2 team argued that their work on strengthening civil society and building advocacy capacity for NRM would help consolidate democracy in Indonesia. NRM2 activities had already:
asserted the rights of economically disenfranchised communities and groups, expanded community access to natural resources and empowered communities through community mapping work and research,
strengthened civil society organizations and build their relationship with communities through a community mapping network,
created new or stronger partnerships between communities and local government, as well as communities and universities,
improved the effectiveness of civil society advocacy by supporting NGO/community monitoring and research of illegal resource extraction activities.
The NRM2 team identified many reformasi era opportunities for advocacy and civil society work. To support NRM advocacy, more work was needed on institutional strengthening and networking. To explore how to rebalance rights and responsibilities for civil society and government under decentralization, NRM2's protected area management work could develop new models for park management, community conservation agreements and NGO funding mechanisms. NRM2 civil society work could also address issues related to citizen action/enforcement programs, conflict resolution, public education and new accountability mechanisms. In the political arena, NRM2 could facilitate the formation of a Green Party or green/NRM agenda for the lead up to Indonesian elections.
Package 3 - Economic Crisis Response
The NRM2 team argued that NRM work would help to stabilize the economy, thereby helping political and economic reforms to succeed. NRM2 activities related to more sustainable and resilient forms of resource use included:
New NRM2 opportunities related to economic recovery included reform of the reforestation fund, exploring possibilities for debt-for-nature swaps to finance conservation, using resource valuation and new business opportunities to provide income-generating alternatives to unsustainable natural resource management.
One of the first steps taken by the NRM2 team was to rally support from internal allies at USAID. The most obvious allies were high-level ENV staff from the Center for Environment in USAID's Washington-based Global Bureau and the ANE regional bureau. The evacuated expatriate USAID staff of NRM2 met with these internal allies and stressed the need to save the NRM2 program because of the ENV importance of Indonesia's biodiversity and forests. During this time, the NRM2 team met more frequently with USAID/Indonesia DG staff, from both the Civic Participation and Transition office and also the well-resourced, Office of Transition Initiatives.4 During this time, the head of the USAID NRM2 team also worked with a DG staff to investigate possible NGO grantees for anti-corruption activities.
Both in Washington and in Jakarta, the NRM2 team invited conservation, environment and human rights organizations and contractors to participate in stakeholder consultations with USAID and ANE senior management. As a federal agency, USAID's priorities are open to public scrutiny and the agency actively seeks input from public stakeholder groups. At these meetings, NGOs and consulting firms argued that it was critically important to maintain NRM2 funding in a post-Suharto Indonesia. In their arguments, they emphasized the links between human rights, justice and governance reform and ENV programs.
USAID priorities are also subject to the influence of input from U.S. legislators. It is illegal for USAID staff to lobby on behalf of their programs. However, the environmental NGO community in Washington, DC was alarmed by the threat to Indonesia's irreplaceable biodiversity and natural resources. Through their on-going legislative relationships, these NGOs alerted environmentally friendly legislators about USAID's plans to end the NRM2. On the basis of ENV arguments, USAID, ANE and the mission were asked to reconsider funding cuts for the NRM2 program.
In addition to this work with allies, the NRM2 team contributed to a mission-wide Action Memorandum to the USAID Administrator. Using the arguments outlined above, the NRM2 team sorted components and budgets of their existing program under the four new strategic objectives. The memorandum argued for the continuation of many existing mission programs and requested budget. By July 1998, when the expatriate staff returned to Jakarta following the evacuation, the USAID Administrator had already signed the action memorandum but there was no budget for NRM activities.
In the immediate post-evacuation period (September-December 1998), the NRM2 team knew that they were unlikely to regain an NRM strategic objective but they hoped to at least reinstate their program and its budget. They knew that fragmenting their program was not the best way to keep it alive. A team led by the ANE Bureau then visited the mission to make plans for the new country strategy. The NRM2 team relied on both ENV and DG arguments to make their case. They discussed the enduring, long-term nature of America's interest in Indonesia's unique biodiversity. They recognized that reformasi and decentralization presented new short-term opportunities to push for significant reforms related to environmental governance, particularly via support for a newly assertive civil society. They argued for the relevance of their civil society capacity building, NGO advocacy, civil society-government partnership approaches. They also drew attention to the fact that the NRM team was the only mission strategic objective team that had already been working since 1996 on "decentralized and strengthened natural resource management" and they were strategically well-positioned to contribute to the mission's DG objectives in the post-Suharto context. The NRM2 team also reassessed and eliminated several elements of their original government-focused plans (e.g. increasing the GOI's national parks budgets, pursuing debt-for-nature swaps) that were unlikely to succeed under political and economic conditions at that time.
The ANE team suggested a welcome compromise and made NRM a special objective (SPO). The SPO was designed to retain a focus on decentralized and strengthened natural resource management. To appear responsive to Indonesia's changed circumstances, the SPO stressed short-term changes (in activity mix, level of effort and scopes of work).
Now NRM2 had a "place at the table," but they still had no budget. The NRM2 team again mobilized to secure funding. But by September 1998, there were new leaders in place at the mission and in the ANE Bureau. There were early signals that bureau leadership was placing a low priority on natural resource management and biodiversity conservation programs. The new mission director went to Washington and used governance-based arguments to reinstate 60 percent (US$ 6 million dollar) of NRM2's former US$ 10 million dollar budget. The mission director and other USAID units considered pushing for full funding but realized that they risked making NRM2 more vulnerable to future funding cuts.
Back in Jakarta, the NRM2 partners were realizing just how important de jure and de facto decentralization issues would become for Indonesia's remaining natural resources. As the NRM2 partners shared their new short-term workplans in 1998 and 1999, it became very clear that strategic actions must be taken immediately. It was important to take advantage of the new opportunities and new threats posed by decentralization (in the words of one informant, there would now be "thousands of corrupt mini-Suhartos"). However, many of these activities would be curtailed if NRM2 received only 60 percent of its former budgets.
The major conservation partners of the NRM2 (WWF, The Nature Conservancy and Conservation International) reached a consensus to act on behalf of NRM2. They wrote letters to USAID leadership. They again met with environmentally friendly staff of U.S. legislators to alert them of the conservation and political economy implications of the NRM2 funding situation. When the new Indonesia mission director flew into Washington to meet with the new Bureau leadership, he also met with these legislative staff. One of the first issues mentioned by them was the importance of fully funding the NRM2 program for both biodiversity and DG reasons. They let USAID know that, from their perspective, NRM2 was the foundation for stabilizing Indonesia's economy and democratic transition.
This pressure, combined with mission staff using the NRM2 team's persuasive DG-related arguments in Washington, helped USAID leadership to understand that the NRM2 program was not just about "bugs and bunnies" (Heesen, February 2000 e-mail, Ferrette, July 1999 interview). Most of the original budget of NRM2 was restored using funds from the agency's biodiversity earmark. This experience reinforced to USAID leadership how carefully external stakeholders watch what USAID prioritizes and funds environmental activities.
For most of the 1998-2000 period, the mission focused on the strategic objectives of democracy-governance, economic growth and social safety nets. The anti-corruption strategic objective was eventually dropped although anti-corruption related efforts were continued under the DG and other objectives. Other DG activities emphasized good governance, decentralization and civil society strengthening. The economic growth program emphasized deregulation. To ameliorate the effects of weakened purchasing power and strengthen social safety nets, the mission expanded its health, population, food aid and employment generation programs. The Office of Transition Initiatives (OTI) began its work in 1998 by focusing on election preparations and moved into democratic consolidation work in conflict hot spots, civil-military issues and civic education for parliamentarians and village leaders.5
In the spring of 1999, the mission invited a team of ENV and DG specialists to re-assess NRM objectives. In general, the team recommended that NRM2 "stay the course." However, they did suggest developing a new scope of work for the contractor, EPIQ, that would address civic education, good governance, constituency-building, democratic and empirically based planning and improved information for policy/decision-makers. Notably, these recommendations paralleled the types of activities that had just been included in the contract scope of work written by USAID/Indonesia's DG Office for their new Civil Society Support and Strengthening Project. Since economic conflicts over resources were fundamental to many of the NRM civil society and governance issues, the new EPIQ scope of work also requested analytical work to economic issues. These topics addressed regional and national structural economic reforms, issues related to who wins and loses, legal and illegal income generation and distribution of income and revenues, etc.6 The consulting team also recommended expanding two provincial liaison offices rather than spreading resources over five provinces. These recommendations were the basis for EPIQ's second performance-based contract.
In February 2000, a combined State-USAID team went to Indonesia in Feb 2000 to develop a new country strategy for the 2000-2004 period (The Leif Report). The State Department was interested in giving more direct assistance to the GOI for governance reform and bilateral government-to-government aid. But there were questions about how much funding would be available for this purpose and the mission retained its focus on local government with civil society as the prime mover of reform. The NRM2 team had had the strategic foresight to begin work on decentralized programming during the previous four years. Accordingly, NRM2 and some economic growth activities were particularly well-positioned for a new mission focus on decentralization because of their strong field presence and relationships. In the proposed new strategy, the intermediate results for NRM2 have shifted from sectors (forestry, protected area and coastal resources management) to cross-cutting ones related to policy, information and institutional building. Although the bilateral agreement extends to 2003, two of the three projects (BSP and EPIQ but not CRMP) will complete Indonesia activities in 2001 due to the close-out of their global cooperative agreements.
The new mission strategy for Fiscal Years (FY) 2000-2004 was presented in September 2000 to USAID leadership. It is interesting to note that NRM has again become prioritized as a strategic objective, thanks to the analysis from the Leif Report. The mission strategy and current mission director are now emphasizing greater coordination and synergy across strategic objectives. For example, to address increasing requests for local government technical assistance, the NRM, urban environmental and DG programs are seeking ways to work synergistically. Funds for natural resource management activities are estimated to be at the US$130 million level for FY 2000-2002 and drop to US$ 100 million in FY 2003.
In the new strategy, there are also five other strategic objectives: democratic reforms, local government, economic growth, energy sector governance and the health of women and children. The issues of conflict impact and crisis reduction are to be addressed under a new special objective. Acknowledging that all of their programs are contributing to DG and social concerns, the mission has designated decentralization, government/civil society partnerships, justice and gender as cross-cutting themes. However, as noted by several observers of USAID programming in Indonesia, this is one story that "...is still being written" because Indonesia is still far from being political and economic stable.
The NRM2 team was able to save their budget and their program. They succeeded because they were able to convince senior management that NRM programs were essential to the mission's plans for helping Indonesians to re-balance their unstable political and economic situation. They showed how democratic and governance reform approaches to NRM led to positive outcomes related to ENV and DG objectives. Finally, by strengthening civil society, supporting advocacy and generating improved application of the rule of law, NRM2 activities at the local and national level made a significant contribution to a more democratic system of checks and balances for Indonesia. The NRM2 team built compelling ENV and DG arguments, based on early results and solid analysis, and leveraged their relationships with internal and external allies.
One of the former USAID program managers summed up the experience of the NRM2 teams. Although the team first began talking about ENV-DG linkages to keep NRM2 alive, their perceptions about their work evolved during the long process of justifying their program. The NRM2 team members came to see that this way of thinking about natural resource management was not just "spin" but it was an accurate representation of their program and the right way to achieve their NRM objectives. Earlier dichotomies between natural resource management and natural resource governance were artificial constructs. Governance activities addresses the "fundamental rules of the game" and deal with systemic change of institutions, relationships, roles and rules. Without attention to governance issues, the team recognized that NRM programs were likely to only achieve minimal, localized impacts that could easily be undone by decentralization and democratization transitions.