Poverty & Social Impact Assessment: Lessons Learned from Indonesia

Asep Suryahadi

The SMERU Research Institutewww.smeru.or.id

PSIA

• Ex ante analysis of the distributional impact of a policy change, focusing on the poor

• Complementary to and to be used as inputs for PRSP

SMERU’s Involvement in PSIA:

• Rice Import Tariff Pricing (with DFID)

• Consolidation of Participatory Poverty Assessment Works (with JBIC)

Rice Import Tariff Pricing

• Choosing the policy consultation with stakeholders

• The policy question: Should the tariff on rice import be increased?

• Two opposing arguments:

> High tariff higher incomes for famers

> Low tariff the poor are net consumers

MethodologyI. CGE Modelling

Effects of tariff increase:

• Consumer price of rice

• Income from wage labor

• Profits from farming

• Relative prices

Existing studies only look at the issue partially

Methodology (continued)II. Policy Interests Matrix

Key stakeholders have different insterests:• Policy objectives• Rationale/argument• Benefits• Constraints• Transmission chanell• Degree of influence

Outcomes

• CGE modelling captures both sides of the rice tariff debate well

• Policy interests matrix increases transparency and inclusion

Policy Development

• Prior to and during the PSIA (Aug - Oct 2002) the announcement of rice import tariff increase was imminent

• Until now the tariff increase was never announced

• PSIA impact ???

Lessons Learned

• Process-oriented identify losers & winners from a policy reform

• Limited time frame, existing studies, data availability, & analytical skills

• There is a need to foster commitment, understanding, coordination, & common vision to tackle the problem of poverty

Lessons Learned (continued)

• The need to understand decision making process and to involve key decision makers

• Capacity building for CSO

• Consolidation of existing works vs original study

• The impact of PSIA on decision making is severily restricted by its voluntary nature