Developing Indonesia’s Crisis Monitoring and Response System

1. Investing in Indonesia’s Institutions for Inclusive and Sustainable Development THE WORLD BANK | BANK DUNIA Regional Conference on the Impact of the Global Economic and Financial Crisis to the Vulnerable Sectors in the Region: Civil Society Voices and ASEAN Developing Indonesia’s Crisis Monitoring and Response System World Bank Jakarta Office 28 July 2009

2. The Government of Indonesia is establishing a Crisis Monitoring and Response System (CMR) CRISIS MONITORING AND RESPONSE IN INDONESIA • CMR should allow the government to: • understand the impact of the current global economic crisis on vulnerable households and individuals in Indonesia • who, where, how deep, through what channels? • undertake the appropriate policy response in a targeted and effective manner • AusAID is financially supporting the government to develop CMR • The World Bank is assisting the government by: • identifying key indicators to monitor and potential data sources • developing an analytical framework • linking monitoring to appropriate response

3. SAMPLE The crisis has multiple mechanisms requiring multiple responses CRISIS MONITORING AND RESPONSE IN INDONESIA Transmission Mechanisms Possible Outcomes Possible Responses Coping Mechanisms Increasing cost of food • Reduced food consumption • Use of lower quality foods • Malnutrition • UCT (unconditional cash transfer), Rice for the Poor Reduced household income (reduced labour demand) • Reduced food consumption • Malnutrition • UCT, Rice for the Poor, Public works (PNPM) • Reduced health expenditure • Low birth weight • Infant and child mortality • Maternal mortality • Disease and illness • Reduced labour productivity • UCT • Rice for the Poor • Public works (PNPM) • Reduced education expenditure • School drop-out • School-directed financial support, CCT (conditional cash transfer), public works • Women and children working • School drop-out • Absenteeism • UCT, CCT, public works • Reliance on assets and borrowing • Loss of income • Greater vulnerability to shocks • UCT • Public works • Risk-pooling Possible responses are examples only. Further work is required to understand the effectiveness and feasibility of various responses. For example, with respect to PKH, management and supply side issues would need to be addressed before possible expansion Note

4. Key quantitative indicators will be monitored quarterly CRISIS MONITORING AND RESPONSE IN INDONESIA

5. The household survey must be low burden yet cover the entire country CRISIS MONITORING AND RESPONSE IN INDONESIA • Objectives • collect household data to provide indicators not available from existing sources • Requirements • frequent (quarterly) • nationwide but at the district level • timely to process and analyse • low cost • to field • to process • low technical capacity required in the field

6. Lot Quality Assurance Sampling (LQAS) meets these requirements CRISIS MONITORING AND RESPONSE IN INDONESIA • Overview of LQAS • sampling method allowing very small sample sizes • used widely in public health evaluation throughout the world • Required steps • setting acceptable and unacceptable thresholds for each indicator • determining desired accuracy • selecting sample size and decision rule • sample sizes could be as low as 25 households per district • LQAS provides a quick indication of regions affected and urgent issues... • indicate districts requiring action or deeper analysis • classify each district as acceptable or unacceptable on each indicator • provide provincial and national estimates for each indicator • but cannot assess indicator levels and trends at a district level • ... however, is insufficient by itself to understand causes and required responses

7. Implementation of Household and Health Facility Survey CRISIS MONITORING AND RESPONSE IN INDONESIA • Implementing Agency • BPS-Statistics Indonesia • Household survey design • three rounds quarterly (August 2009, November 2009, February 2010) • is a subsample of and piggy-backed on SAKERNAS (Labor Survey) • a panel 14,130 households • 6 households x 5 census blocks x 471 districts • Health facility survey design • three rounds quarterly (August 2009, November 2009, February 2010) • administrative data collection • district health office • health centers (5 health centers per district)

8. Qualitative analysis will deepen understanding of the context driving the indicators CRISIS MONITORING AND RESPONSE IN INDONESIA • Rapid qualitative assessment is required to support the quantitative analysis • accuracy of signals • understanding underlying causes • confirming indicator triggers require action • determining effective policy responses • SMERU will conduct such a diagnosis • The qualitative and quantitative components of CMR will interact with each other dynamically • indicator results will provide direction on policy areas for qualitative diagnosis next quarter • indicator mix may change as qualitative diagnosis identifies underlying causes and areas requiring most attention

9. SAMPLE Both quantitative and qualitative analyses will establish specific response triggers CRISIS MONITORING AND RESPONSE IN INDONESIA Triggers and Responses Indicator Possible Indicators Qualitative Analysis Possible Response Changes in working hours and employment • Firms planning to reduce employment levels reaches 20% • Demand for firm output down • Surplus production capacity Public works (PNPM) Food prices • 20% increase in rice price last quarter • Food price index up 50% on year • Higher prices reducing food consumption • Increases not due hoarding UCT, Rice for the Poor Possible responses are examples only. Further work is required to understand the effectiveness and feasibility of various responses. Note

10. A number of next steps are imminent CRISIS MONITORING AND RESPONSE IN INDONESIA • Set up data management system • Establish an analytical framework for assessing indicators • Develop a reporting system for policy makers • Identify required and feasible responses