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Formulating Guideline or Criteria for the Utilization of Village Fund for Climate Change

Jakarta, 2018-04-10

Tiza Mafira, CPI Indonesia Senior Analyst, delivered a presentation on ‘The Potential of Village Fund to Support Sustainable Land Use’ at the Focused Group Discussion (FGD) titled  ‘Formulating Guideline/ Criteria for the Utilization of Village Fund for Climate Change’ on April 10, 2018. The FGD was held in Jakarta and convened by the Directorate of Sectoral and Regional Resources Mobilization – Ministry of Environment and Forestry who is looking at opportunities to draft a policy to optimize Village Fund for climate action at the village level including forest and land fires prevention.

The Government of Indonesia is committed to reduce GHG emission 29% by 2030 against business-as-usual scenario with domestic resources as stated in its Nationally Determined Contribution (NDC). To reach this target, the government promotes various efforts by stakeholders at different levels of administration including village.

Village Fund, as one of fiscal transfer instruments from the national government to empower village and help support rural economy, has not been optimally used for sustainable land use and environmental protection. CPI’s research revealed that in Central and East Kalimantan the use of Village Fund for efforts such as sustainable agriculture, forest conservation, and land rehabilitation remain very limited.

CPI recommends three steps to improve Village Fund’s utilization in supporting sustainable land use and environmental protection:

  1. At village level: synchronize village development priority with district planning.
  2. At district level: improve district government’s guidelines for Village Fund utilization with possibility of using ‘negative list’ approach and strengthen facilitative roles of the Office for Community and Village Empowerment.
  3. At national level: include sustainable land use variable in Village Fund formula.

These recommendations are highly appreciated by both the FGD convener and participants. This event is also attended by officials from Ministry of National Development Planning, Ministry of Village, Ministry of Home Affairs and Ministry of Finance as well as representatives of non-government entities which are working on Village Fund.

Further readings about CPI report on Village Fund can be found here.