Strategic Options for Forest Assistance in Indonesia ix FOREWORD BY SUPPORTING PARTNERS Indonesia faces many development challenges: decentralization and democratization, conflict and injustice, growth and equity, poverty and vulnerability. Forest issues are entry points for every one of these. Why Forests? The global community is concerned about Indonesia’s forests because of their social, economic and environmental importance for quality growth and lasting poverty reduction. Forests are a national asset, a global public good, and central to the livelihoods of millions of Indonesians. Forest issues touch every segment of civil society in nearly every district – 70% of the country’s land -- including communities, traditional cultural groups, women, religious groups, civil society organizations, businesses, and every level of government. Yet, Indonesia’s forest resources are not contributing as they should to poverty reduction, economic and social development, and environmental sustainability. As the country makes the transition to stabilization and growth, there is a tremendous opportunity to help the Government of Indonesia find new ways of managing forest areas in partnership with local communities, contributing to democracy, justice, equity, rural sector investment, jobs and growth. Why Now? Indonesia’s forest sector has been in crisis for some time, yet many of us believe that the likelihood of successful outcomes is higher now than at any time in the past. This is because democratization and decentralization of government are creating positive political pressures. The Government is committed to improving governance and fighting corruption. Attitudes and roles among Government, big business and civil society are changing. Central policy-making is more consultative and transparent. Local governments are becoming more responsive and accountable. Civil society and business are repositioning for more constructive relationships. In the Ministry of Forestry, a process of evolution and reform is resulting in new opportunities for meaningful engagement toward improved forest management. Partner Support. This report is based on considerable contributions from a wide range of colleagues and institutions concerned with Indonesian forestry issues. The document provides an analytical framework for understanding objectives and discusses options for policy and project interventions, rather than a single set of recommendations. Government agencies, international and donor organizations, research institutions and NGOs can use this as a common framework for addressing forest related issues more effectively at this critical time in Indonesia’s development. Andrew Steer Country Director, Indonesia East Asia and Pacific Region The World Bank Frances Seymour Director General Center for International Forestry Research Shantanu Mitra Country Head, Indonesia UK Department for International Development Meine van Noordwijk Regional Coordinator World Agroforestry Center (ICRAF-SEA) Jean Bretéché Ambassador Delegation of the European Commission in Indonesia Edgar A. Cua Country Director, Indonesia Resident Mission Asian Development Bank German A Vegarra Country Manager, Indonesia and Malaysia The International Finance Corporation

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Strategic Options for Forest Assistance in Indonesia

FOREWORD BY SUPPORTING PARTNERS Indonesia faces many development challenges: decentralization and democratization, conflict and injustice, growth and equity, poverty and vulnerability. Forest issues are entry points for every one of these. Why Forests? The global community is concerned about Indonesia’s forests because of their social, economic and environmental importance for quality growth and lasting poverty reduction. Forests are a national asset, a global public good, and central to the livelihoods of millions of Indonesians. Forest issues touch every segment of civil society in nearly every district – 70% of the country’s land -- including communities, traditional cultural groups, women, religious groups, civil society organizations, businesses, and every level of government. Yet, Indonesia’s forest resources are not contributing as they should to poverty reduction, economic and social development, and environmental sustainability. As the country makes the transition to stabilization and growth, there is a tremendous opportunity to help the Government of Indonesia find new ways of managing forest areas in partnership with local communities, contributing to democracy, justice, equity, rural sector investment, jobs and growth. Why Now? Indonesia’s forest sector has been in crisis for some time, yet many of us believe that the likelihood of successful outcomes is higher now than at any time in the past. This is because democratization and decentralization of government are creating positive political pressures. The Government is committed to improving governance and fighting corruption. Attitudes and roles among Government, big business and civil society are changing. Central policy-making is more consultative and transparent. Local governments are becoming more responsive and accountable. Civil society and business are repositioning for more constructive relationships. In the Ministry of Forestry, a process of evolution and reform is resulting in new opportunities for meaningful engagement toward improved forest management. Partner Support. This report is based on considerable contributions from a wide range of colleagues and institutions concerned with Indonesian forestry issues. The document provides an analytical framework for understanding objectives and discusses options for policy and project interventions, rather than a single set of recommendations. Government agencies, international and donor organizations, research institutions and NGOs can use this as a common framework for addressing forest related issues more effectively at this critical time in Indonesia’s development.

Andrew Steer Country Director, Indonesia East Asia and Pacific Region The World Bank

Frances Seymour Director General Center for International Forestry Research

Shantanu Mitra Country Head, Indonesia UK Department for International Development

Meine van Noordwijk Regional Coordinator World Agroforestry Center (ICRAF-SEA)

Jean Bretéché Ambassador Delegation of the European Commission in Indonesia

Edgar A. Cua Country Director, Indonesia Resident Mission Asian Development Bank

German A Vegarra Country Manager, Indonesia and Malaysia The International Finance Corporation