Why foreign aid for REDD+ implementation does not work here

Pungky Widiaryanto, East Lansing, US | Opinion | Tue, December 18 2012, 10:34 AM

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We are willing to pay as long as we can be sure that we are paying for actual emission reductions. Donor countries need credible figures as a basis for asking their parliaments for money for this,” said Norway’s chief negotiator to Point Carbon, when Reducing Emissions from Deforestation and Forest Degradation Plus (REDD+) was negotiated in Doha a few weeks ago, according to redd-monitor.org.

In relation to Norway’s commitment of around US$1 billion in assistance under the Letter of Intent (LoI) it signed with Indonesia in 2010, this statement clearly shows Norway will only disburse the rest of the funds ($800 million) if Indonesia can reduce carbon emissions. The initial funding of about $200 million is being used to prepare the REDD+ initiative, to be formulated by the REDD+ task force.

As we may be aware, every year the Forestry Ministry spends about $600 million, including for the salaries of around 15,000 employees scattered across Indonesia.

Some activists and experts, however, have blamed the country’s high deforestation rate on poor governance in the forestry sector. To make the REDD+ a success, Indonesia requires forest policy reform.

The notion of policy reform is to alter the current forest governance system, which is associated with bad governance practices, including corrupt administration.

The Forestry Ministry has initiated institutional reforms by participating in the “bureaucracy reform” process introduced by the Administrative Reforms Ministry. Arguably, this transformative initiative is characterized by reform in incentives through salary increases in order to enhance productivity and discourage corruption. Unfortunately, the House of Representative rejected this remuneration reform.

Ironically, with regard to the Norwegian funds, much of the initial $200 million has been spent on hiring international and national consultants, who earn much more than the Forestry Ministry, to prepare REDD+ mechanisms. The inequality in pay may spark resentment and skeptical views about REDD+ among forestry staff, and without the ministry’s full backing, the program will only remain an idea.

International donors that have committed to supporting REDD+ in Indonesia need to inject more assistance to support institutional reform within the Forestry Ministry.

Contestation among institutions in designing REDD+ agency initiatives is another challenge that may inhibit efficacy of foreign aid in supporting the program.

Indications rivalry appeared when the REDD+ task force proposed the establishment of a new REDD+ agency. The Forestry Ministry resisted the creation of a new agency from the beginning due to reasons related to the long history of forest governance in Indonesia.

Apparently, it’s all about power. Pelluso, a political-ecology expert from the University of California, explains in her book Rich Forest, Poor People that the Dutch colonial administration strongly influenced the forest governance system in Indonesia.

The colonial legacy has enabled the government to control forest resources until today. The government’s authority, adopted from the colonial system, includes institutions and rules. These components allow the application of this very specific form of power to control the forest and the communities living in the forests.

The system, described as an “extractive” institution by Acemoglu and Robinson in their book Why Nations Fail, sees only a few elites control the political and economic opportunities, including in the forest sector.

This system, they say, is the main reason why a nation cannot grow well in the long term. Almost all European colonial countries, including the Dutch, adopted this extractive institution, which has unfortunately been maintained by the Indonesian government.

On the other hand, Acemoglu and Robinson recommend an inclusive and pluralistic institution in forest management. It might be a reason why the REDD+ task force insists on establishment of a new REDD+ agency that is designed to accommodate many stakeholders including consultants, NGOs, civil society groups and government agencies.

Even though the complexity of this system may disturb the implementation of REDD+ in Indonesia, contestation has increased public awareness of the importance of forest policy reform in Indonesia.

With respect to support for deforestation, international donors should evaluate and learn from their previous projects. Historically, several environmental projects in Indonesia, more specifically in forestry sector, have left observers asking the question, “Where did all of the aid go?”

Many environment projects only produced dozens of reports just to meet donor requirements. Many skilled experts and bureaucrats have profited from these projects.

The experts were hired as consultants, while the bureaucrats became the brokers of the projects. Oftentimes, skilled government officials were recruited to work for the international donors’ project at the expense of Indonesian forestry institutions, which lost skilled administrators.

Has the Indonesian environment improved following those projects? It is not clear since deforestation, biodiversity loss and environmental degradation are still ongoing.

Again, the fundamental aspect of this failure is institutional, as highlighted by Acemoglu and Robinson. While institutional problems — the main driver of environmental degradation in Indonesia — are obvious, international donors keep their “top-down” strategy intact as they think it will work well in curbing environmental issues in Indonesia.

In order to make REDD+ assistance work, it is advisable that international donors take into consideration the political and economic conditions in Indonesia.

Understanding the history and local needs is important to support the success of REDD+ in Indonesia. If not, aid will not effectively help Indonesia realize the reduction of emissions from the forest and land use, and these donations will become “unhelpful help”.

The writer is currently studying international development and forest carbon management at the department of forestry, Michigan State University, USA.