1. Conditions for and constraints on project implementation
1.1 Statistics and other basic information
The implementation of a framework for regional development planning as described in section 1 above necessitates the availability of a large amount of economic data. Even if it is decided not to establish the full planning framework, the Provincial government will need an accurate and up to date description of the regional economy and a good understanding of the interaction between different sectors in order to anticipate changes and choose between alternative development paths.
The main source of statistical information about Central Kalimantan is the Statistical Yearbook (Badan Pusat Statistik: Kalimantan Tengah in Figures, 2001). It contains detailed and comprehensive demographic and economic data, although only for the most recent years, and in some cases only for 2001. In order to draw conclusions about trends and to undertake any economic modelling work, longer time series are needed. Some types of data, for instance, basic demographic data such as birth and death rates and data on migration, are also missing from the Yearbook (although details are given on transmigration and on the number of foreigners). While the tables in this publication are in both English and Indonesian, most other information, particularly reports with an analytical content, is only available in Indonesian. Similarly, discussions with provincial government officials and with other interested parties have to be interpreted. While this does not constitute an absolute obstacle, it makes analytical work take longer time and it complicates communication and exchange of information. In summary, the available statistical data needs to be complemented by longer, more detailed economic time series and by more detailed demographic data. It is also possible that additional primary data will need to be collected in order to complement what is already available. In particular, if it is decided to carry out detailed modelling work, more data may be needed on enterprises that are currently operating in the Province.
An impressive work has been done transferring data on basic geographical characteristics, administrative boundaries and land use into a geographic information system (GIS) based on the widely used mapping software ArcView. Since the material has not yet been made available, it is not possible at this stage to assess its accuracy or whether it is up to date. However, the existence of at least a basic GIS considerably simplifies the implementation of a demonstration project, even if some of the data may need to be updated or modified. For a serious modelling exercise, all economic and demographic data would need to be made available by regency (Kabupaten).
1.2 Present planning procedures
The regional planning agency, BAPPEDA, prepares a detailed regional development plan that is updated every year in the context of the preparation of the annual Provincial Government budget. The plan is adopted by the Provincial Parliament. BAPPEDA is assisted by the Centre for Economic Studies and Public Policy at the University of Yogyakarta. Although no copy of the plan has yet been made available, it has been described as an analytical document that makes use of sophisticated quantitative methods. The various departments of the Provincial Government are all involved in preparing the plan and efforts are made to include civil society in the establishment of priorities.
It is not known to what extent the present planning procedures make use of formal economic models. Judging from the descriptions given, however, it appears that the process could easily be combined with modelling of the region's economy, and that this could make a useful addition.
1.3 Provincial Government capacity
As part of the ongoing process of delegation of authority from the central Government of Indonesia to lower levels of government, responsibility in a number of areas has been delegated to the Government of Central Kalimantan. Since the process is still underway, the exact distribution of authority remains unclear in several cases, but it is expected that the division of responsibilities between different levels of government will become clearer over time. Provincial and lower level governments will also need the resources to carry out their new responsibilities. The broad outlines of the distribution of taxation authority, and the division of tax income, particularly from natural resources, have been defined (the land tax proceeds go directly to the Provincial Government, while land rent, royalty, VAT, corporate income tax and tax on employees' salaries all go to the central Government with a portion being returned to the Province). The new procedures are, however, not yet in place. Lower level governments will also need to acquire staff with the expertise necessary to discharge their expanded functions. The personnel of the central Government's regional branches have in most cases been transferred to provincial governments. However, they were previously occupied mainly with the implementation of central Government directives and may not always have sufficient expertise to assume independent regulatory and administrative responsibilities. While it will be possible to rely on the central Government for support if needed, it is of course important that the Provincial Government acquire its own expertise as soon as possible. This will in most cases require increases in staffing and budgets.
In the case of Central Kalimantan, it appears, as a preliminary assessment, that the level of expertise in the Provincial government is high. Accordingly, it is possible that only limited increases in staffing will be necessary in the short term. Again, as a preliminary assessment, it seems that staff of the concerned departments would be able to handle the vast majority of new tasks that would have to be carried out in order to prepare for large-scale mining, particularly if the central government can be counted on to provide the necessary assistance with respect to, for instance, technical aspects of environmental impact statements.
2. Crucial factors and constraints on the implementation of a demonstration project
2.1. Limits to the authority of the Provincial Government
Provincial governments in Indonesia (as in other countries) do not have the right to engage directly in technical cooperation projects with intergovernmental organizations. Since the detailed guidelines for the relations of provinces with intergovernmental organizations have not yet been prepared, any technical cooperation project in Central Kalimantan would need to be the subject of an agreement between the executing agency, the Provincial Government and the relevant central Government department. This is not expected to be a major constraint, but it will necessitate frequent exchange of information with the central department concerned, something that will also be useful in view of the fact that the project is intended to be a demonstration project that will be replicated elsewhere in Indonesia and possibly other countries in the region.
2.2. Acceptability in local communities
In order for the project to be successful, it has to use a participatory approach, involving all the stakeholders, particularly local communities, in project planning and implementation. This means that the objectives and expected results of the project have to be clearly understood by the local communities and that they adopt the objectives as their own. The communities around the area where exploration has been carried out have been involved with this activity for a long time and have had the time to imagine the possible changes. For other communities, it will be difficult to visualize the changes that will take place to the economy and they will inevitably need some time to take in the new ideas and identify potential risks and benefits. Accordingly, a great deal of explanation and consultation will be necessary and the time and effort needed must be taken into account when planning the project. This time and effort will later be seen as well spent, since it will result in less controversy once mining development gets underway. While differences of opinion can never be totally avoided, at least those differences that arise form lack of information should be minimized. The aim of the demonstration project should be to allow all stakeholders to realize as large benefits as possible from mining by making it possible for them to anticipate events and take action accordingly. The active participation of the different departments of the Provincial Government in the consultation process is crucial to its success, particularly since these departments will in most cases be the implementing agents of the plans that result from the consultations.