Poverty-Environment-Nexus-in-Indonesia-Puguh-B-Irawan-and-Silvia-Irawan-2005

Poverty and Environment
Nexus in Indonesia
With a Special Reference to Livelihood and Environmental
Health Dimensions using a Right-Based Approach
By:
Puguh Irawan and Silvia Irawan
Ministry of Environment (KLH) and UNDP
Indonesia Decentralized Environmental and Natural
Resources Management (IDEN) Project
April 2005

Poverty and Environment Nexus in Indonesia
With a Special Reference to Livelihood and Environmental
Health Dimensions using a Right-Based Approach
By:
Puguh Irawan and Silvia Irawan
Ministry of Environment (KLH) and UNDP
Indonesia Decentralized Environmental and Natural
Resources Management (IDEN) Project
April 2005

Forewords
Issue on poverty-environment nexus is important in Indonesia due to some reasons.
First, the poor in Indonesia heavily relied on natural resources-based economic
activities, such as agriculture and mining for their livelihood. Thus, access to natural
resource base and maintaining environmental condition are crucial for sustaining the
livelihood of the poor as the degraded resources would badly hurt them. On the
contrary, the poor had limited access to land holding, indicating they are less able to
maintain their land productivity even for a survival level of livelihood.
Second, the elites’ control over the forests in the country has pushed the poor into
marginal land, forcing them to further exploit the limited resources. The conflicting
interests in resource use by both the elites and the poor led to the aggravating
ecological condition. Guaranteeing the resource rights for the poor, such as legalized
access for forestry users is hence critical to improve the livelihood of the poor and to
conserve forest. With regard to poverty-coastal degradation link, poverty among
coastal communities was related to the degrading marine resources due to over-
fishing, habitat modification and pollution along the shorelines where the poor live.
Continuous over-exploitation of the coastal resources threatens biodiversity and
resource productivity, as well as it puts the poor fishermen at risks due to lacks of
alternative income sources. In addition, the poor are also continually at risks to
environmental-health diseases, leading to high incidence of infant mortality, largely
due to inadequate accesses to safe drinking water, healthy sanitation and basic health
facilities.
We welcome the publication of this study report on “Poverty-Environment Nexus in
Indonesia”, prepared by a team of consultants under a UNDP-Ministry of
Environment (KLH) Project on Indonesian Decentralized Environmental and
Natural Resources Management (IDEN). The publication provides an analysis for
bringing the insights available from quantitative and qualitative data to draw some
implications for integrating environmental-related issues into the formulation of
poverty reduction strategy at the national, provincial and district level in the country.
We hope the publication is useful for policy makers, researchers, civil society and
those interested in understanding the dynamics of poverty-environment linkages in
Indonesia.
Jakarta, April 2005
Gempur Adnan
Deputy II Ministry of Environment
and National Project Director
IDEN Project - UNDP 3

Drafting Team
Poverty-Environment Nexus in Indonesia
With a Special Reference to Livelihood and Environmental Health Dimensions
Using a Right-based Approach
This report has been prepared by a team of consultants under
a UNDP- Ministry of Environment, Indonesia (KLH) Project on Indonesian
Decentralized Environmental and Natural Resource Management (IDEN). The
analysis and policy recommendations in this Report do not necessarily reflect the
views of KLH or UNDP.
Team Leader:
Budhi Sayoko
National Programme Officer:
Lukas Adhyakso
Program Coordinator:
Anton Sri Probiyantono
Reviewer:
Tjuk Kuswartojo
Main Authors:
Puguh B. Irawan and Silvia Irawan
Research Assistants:
Rissalwan Habdy Lubis and Joko Tirto Raharjo
Statistical Assistant:
Achmad Sukroni
Administrative and Secretarial Support:
Elin Shinta and Diah Aji Purbosari
__________________________________________________
ISBN:
Publication Number:
Size: 17.6 X 25.0 centimeters
Number of Pages: 53 pages
Manuscript by: IDEN-UNDP Indonesia
Cover Design:
Published by UNDP Indonesia

Acknowledgement
This report has been prepared by a team consisting of consultants under a joint
KLH-UNDP project on Indonesia Decentralized Environmental and Natural
Resources Management (IDEN). The team would like to extend deep gratitude as we
greatly benefited from the following organizations:
• Ministry of Environment (KLH): Mr. Gempur Adnan, Mr. Henry Bastaman,
and Mr. Moh Helmy
• National Development Planning Bureau (Bappenas): Mr. Dedy Masykur,
Mr. Tatag Wiranto, Mr. Agus Prabowo, Mr. Indra Darmawan, Mr.
Medrilzam
• Local governments: Regional Planning Bureau of Surabaya, Regional
Planning Bureau and related Government Officials of Lamongan Regency,
Regional Planning Bureau and Marine and Fisheries Office of Tuban
Regency, Regional Planning Bureau of Ngawi, Head of Regional
Community Empowerment Office (PMD) Brebes and related Government
Officials, Regional Planning Bureau of Majalengka, Regional Planning
Bureau of Buleleng, Regional Government of Mataram Municipality,
Regional Planning Bureau of Pontianak Municipality and Regional Planning
Bureau of Landak.
• Non-Governmental Organizations: Jerit (Surabaya) and YAPSEM
(Lamongan)
Valuable information from Mr. Agus Gunarto (Malang) and Mr Saban (Lampung)
during the field works is highly appreciated. Comments and inputs were also
obtained from two series of workshops held in Yogyakarta and Jakarta where
constructive inputs are obtained from academics, experts in poverty and
environment, practitioners, Non-Governmental Organization such as Walhi, Kehati,
URDI, as well as related government’s officials. Therefore the team would like to
show appreciation to all the workshop’s participants.

Executive Summary
1. The aim of the study is to observe how poverty and environment is inter-
related, by focusing on the dimensions of livelihood and environmental health
using a right-based approach as outlined in Indonesia’s national poverty
reduction strategy. Employing both quantitative and qualitative data analyses,
the study attempts to draw some implications for integrating environmental-
related issues into the formulation of poverty reduction strategy at the national,
provincial and district level in the country. Below is the summary of major
findings from the results of the analysis.
2. The majority of the poor in Indonesia heavily relied on such natural-based
resources as agriculture and mining activities, accounting for around 72% to all
poor households with mostly living in rural areas. With this dependence,
access to natural resource base and maintaining environmental condition are
crucial for the sustenance of the poor people’ livelihoods as the degraded
resources would badly hurt them.
3. Inequality in the agricultural land holding among farmers in Indonesia was
quite alarming, with a gini ratio of 0.56. As the agricultural employment in
Indonesia was mostly characterized by those engaged in farm labor and
subsistent farming with less than 0.5 hectare, a limited access to land holding
among these poor people implies that they are less able to maintain the
productivity of their land even for a survival level of livelihood.
4. An analysis on poverty-forest nexus suggests that the forests are mostly
controlled by the elites. This has pushed the poor into marginal land, which in
turn forces them to further exploit the limited resources. Due to the conflicting
interests in resource use by both the elites and the poor, the aggravating
ecological condition is thus unavoidable. As might be argued, guaranteeing the
resource rights for the poor, such as legalized access for forestry users to State-
owned and communal forest, is an important leverage for both improvement in
the livelihood of the poor and the conservation of forest.
5. With regard to the linkages between poverty and coastal degradation, the
persistence of poverty among coastal communities was related to the degrading
marine resources due to over-fishing, habitat modification and pollution along
the shorelines where the poor live. Continuous over-exploitation of the coastal
resources threatens biodiversity and resource productivity, as well as it puts the
poor fishermen at risks due to lacks of alternative income sources. Thus, most
fishermen are in a constant impoverishment simply because they are engaged
in such low-productivity fishing activities as the only resource accessed by
them has been degraded.

6. In the context of poverty-environmental health linkage, the coverage of safe
water and adequate sanitation among the poor in Indonesia was still low,
amounting at 37% and 54% respectively among the lowest income groups. The
findings indicate that the poor are continually at risks to environmental-health
diseases, including diarrhea, infectious and respiratory diseases. Poverty is also
associated with high incidence of infant mortality, as a sensitive health
performance indicator. It suggest that the poor are less affordable to get access
to basic maternal, pre- and post-natal cares, bringing about death risks for their
newly born babies.
7. Interesting evidence from the qualitative study was found with regard to the
local perspective in coping with environmental-related poverty issues.
Innovative, low-cost and mutual community-based kampung improvement and
waste disposal management have been practicing in various poor urban
communities being studied. The best practices include human waste disposal
system in Tlogomas-Dinoyo, Malang, and improvements in the living
condition of illegally occupied slum areas along the riverbank in Wonokromo,
Surabaya. These local initiatives on environmental-related poverty issues show
that the poor genuinely have willingness to improve their living conditions, yet
with limited capacity.
8. From the results of analysis, the study draws some implications for setting up a
framework on how to integrate environmental issues into the formulation of
development planning especially regarding the poverty reduction strategy and
in Indonesia, both at the national and regional context.
9. First, guaranteeing the resource rights and providing basic services for the poor
call for the importance of addressing poverty-environment nexus by using a
right-based approach―as outlined in the final draft of the national poverty
reduction strategy (SNPK). Indeed, SNPK acknowledges the links between
poverty and environment by identifying poverty as a lack of access to natural
resources (and environment), by which the livelihood of the poor largely
depends on the natural endowment-based economic activities. Decline in the
resources’ quality will hence instantly hurt the poor. Broader legal aspects,
such as Law 23/1997 on ‘Environmental Management’ and UN Draft
Declaration of Principles on Human Rights and the Environment’, also stress
on the importance of providing rights for every citizen to get a healthy
environment and to benefit from sustainable use of the natural resources.
Thus, by securing rights for the poor to get fairly equal accesses to natural
resource use, to better environmental condition, and to safe drinking water and
sanitation, a systemic poverty reduction strategy can be best implemented
along with a sustainable environment management. To support this framework,
it is imperative then to establish the conceptual and operational standards of the
rights to environment and natural resources in the near future. Standards of the
rights here shall provide a solid basis on the relationships between individual
citizen as rights-holders and Government as duty-bearers.

10. Second, environmental management in Indonesia is nowadays complicated by
a rapid decentralization process, by which much of the responsibilities for
public services were devolved to local administration. Within the context of
natural resources management, decentralization creates compelling problems
of uncertain control over resource use between central and local governments,
thus potentially leading to the environmental degradation. Under the
decentralization scenario, newly empowered local governments would embark
in more intensive resource exploitation to boost local income without adequate
environmental safeguards. The right-based approach, notably referring to rights
of natural resources and environment, will therefore impose duties on every
autonomous region to protect their environment and natural endowment along
the process of their regional development.

TABLE OF CONTENT
ACKNOWLEDGEMENT ...................................................................................................5
EXECUTIVE SUMMARY..................................................................................................6
TABLE OF CONTENT .......................................................................................................9
1. INTRODUCTION ....................................................................................................10
1.1. BACKGROUND....................................................................................................11
1.2. OBJECTIVE OF THE STUDY..................................................................................12
1.3. METHODOLOGY .................................................................................................13
1.4. SCOPE OF THE STUDY.........................................................................................13
2. FINDINGS.................................................................................................................13
2.1. POVERTY PROFILE IN INDONESIA .......................................................................14
2.2. LINKAGES BETWEEN POVERTY AND ENVIRONMENT........................19
2.3. LIVELIHOODS AND THE ENVIRONMENT.................................................21
2.3.1. FORESTS AND POVERTY NEXUS .........................................................................24
2.3.2. POVERTY AND COASTAL DEGRADATION............................................................27
2.3.3. CONCLUSION AND RECOMMENDATION ..............................................................30
2.4. ENVIRONMENTAL HEALTH .........................................................................32
2.4.1. POVERTY, HEALTH AND THE ENVIRONMENT ......................................................32
2.4.2. BEST PRACTICES IN POVERTY AND ENVIRONMENTAL HEALTH LINKS .................36
2.4.3. CONCLUSION AND RECOMMENDATIONS ............................................................38
3. CONCLUDING REMARKS: POLICY IMPLICATIONS...................................40
ANNEX 1. TECHNICAL NOTES ON QUANTITATIVE DATA ANALYSIS............44
SCATTER DIAGRAM ........................................................................................................47
QUADRANT ANALYSIS....................................................................................................47
ANNEX 2. NOTES ON THE RESULTS OF QUALITATIVE STUDY........................49
FGD and its reliability................................................................................................49

LIST OF FIGURES
FIGURE 1 INDONESIA: TREND IN POVERTY INCIDENCE, 1976-2003.......................................14
FIGURE 2 POVERTY MAPPING BY DISTRICTS IN INDONESIA, 2003.........................................15
FIGURE 3 INDONESIA: POPULATION DISTRIBUTION BY EXPENDITURE CLASS, 2002 ...............17
FIGURE 4 INDONESIA: LONG TERM TREND IN GINI COEFFICIENT, 1964 – 2002......................18
FIGURE 5 MDG AND ENVIRONMENT FRAMEWORK...............................................................20
FIGURE 6 INDONESIA: RATIO OF PER CAPITA DISPOSABLE INCOME TO THE NATIONAL
AVERAGED INCOME AMONG ECONOMIC GROUPS OF HOUSEHOLDS, 1975 – 1999
(THE NATIONAL AVERAGE = 100 %) ............................................................................22
FIGURE 7 TREND OF WATER SUPPLY AND FOREST COVER IN KAYU TANAM VILLAGE,
WEST KALIMANTAN ....................................................................................................24
FIGURE 8 PROCESSES OF FOREST DEGRADATION AND DEFORESTATION IN INDONESIA.........25
FIGURE 9 FOREST COVER AND LOGGING CONCESSION IN KALIMANTAN ISLAND IN 1997.....26
FIGURE 10 POVERTY AND ACCESS TO RESOURCES ...............................................................30
FIGURE 11 INDONESIA: % HOUSEHOLDS WITH ACCESS TO SAFE WATER BY EXPENDITURE
QUINTILES, 2003 .........................................................................................................33
FIGURE 12 INDONESIA: % HOUSEHOLDS WITH ACCESS TO SANITATION BY EXPENDITURE
QUINTILES, 2003 .........................................................................................................33
FIGURE 13 INDONESIA: THE POOR WITH VARIOUS LIVELIHOODS IN ASSOCIATION WITH
ENVIRONMENTAL HEALTH INDICATORS IN URBAN AND RURAL, 2002........................35
LIST OF TABLES
TABLE 1 INDONESIA: WHO ARE THE POOR IN 2002? ............................................................16
TABLE 2 INDONESIA: DEPENDENCY OF THE POOR ON NATURAL RESOURCES-BASED
ECONOMIC ACTIVITIES, 2002 ......................................................................................21

1. Introduction
1.1. Background
Understanding poverty-environment linkages in the context of developing
countries like Indonesia is crucial for some respects. First, the incidence of
poverty may be related to the consequences of development activities that
are not environmentally sustainable and due to macroeconomic policies that
are not pro-poor. Poverty alleviation is essential to long-term economic and
environmental sustainability. This can be undermined by the degradation of
the natural resource base, lack of access to, and increasing scarcity of water,
and air pollution that directly affect people’s health and livelihoods.
Opportunity declines when poor people who depend on natural resources for
their livelihoods can no longer support themselves should the resources be
damaged as they lack alternative sources of livelihoods. This is further
complicated by the continued population growth that creates more pressure
on the exploitation of the already degraded natural resources. The challenge
is thus to increase standards of living without destroying the environment.
Second, poverty-environment nexus may be conceptualized as a "vicious
downward spiral" inter-relationship, as suggested by the Brundtland
Commission’s report on Our Common Future.1
The report stated, “The poor
are forced to overuse environmental resources to survive from day to day,
and the impoverishment of their environment further impoverishes them,
making their survival ever more difficult and uncertain”. This concept is
however widely questioned as industrialized countries and the rich within
the developing countries are disproportionately over-exploiting the
environment and natural resources as compared to the poor.2
To blame the
poor for the environmental degradation therefore seems to be exaggerating.
Not all poverty is due to environmental degradation, nor is environmental
degradation because of poverty. In other words, the inter-relationships
between poverty and environmental degradation are not necessarily
straightforward. The growing number of the poor may have less contribution
in aggravating the environmental degradation than the exploitation of
natural resources by the elites.
Third, globally recognized environmental problems are often given a less
priority in developing countries than in industrial countries. Issues on ozone
depletion and global warming concerned by the industrial countries are far
less important than lacks of sanitation and clean water that become the most
pressing problems among the poor in developing countries.
1
World Commission on Environment and Development (1987), Our Common Future, New York: Oxford
University Press.
2
See for instance, Reardon, Thomas, and Stephen A. Vosti (1995) ‘Links between rural poverty and the
environment in developing countries: asset categories and investment poverty’. World Development 23, 9: 1495-
1506.

Fourth, most of poor people in developing countries have been squeezed out
of high-potential land. Consequently, rural poor often have no choice but to
over-exploit the marginal resources available to them through low-input,
low-productivity and agricultural practices such as overgrazing, soil-mining
and deforestation. This in turn leads to land degradation that has been
primarily instigated by poor farmers. In most cases, however, deforestation
has been caused by logging interests and rich farmers with substantial and
favorable concessions. Soil erosion, water logging and salinization resulting
in desertification in many parts of the world have commonly been caused by
wealthy landowners with considerable financial resources. Urban
livelihoods depend far more on income-earning possibilities from non-
agricultural activities and far less on access to natural resources⎯and thus
depend less on environmental entitlements than rural livelihoods. However,
urban poor constantly faces multifaceted problems including fear of forced
eviction from their settlement as most of them have no access to land, poor
housing conditions, poor access to improved sanitation and safe water, high
exposure to biological and chemical pollution, and most importantly they
have insecure income sources.
And finally, in the context of national poverty reduction strategy (SNPK) in
Indonesia, issues on poverty-environment linkages become very imperative
as the strategy explicitly emphasizes on right-based approach which
guarantees the poor to obtain ten basic rights, including access to food
security, health services, education, decent work, housing, safe water, land,
environment and natural resources, personal security, and participation right.
From this right-based approach, poverty reduction and environmental
improvements thus can be interlinked through three mechanisms: 1)
enhancing the livelihoods of poor people through improved natural resource
management, 2) preventing and reducing environmental health risks, and 3)
reducing people’s vulnerability to environmental hazards (DFID, EC,
UNDP, and the World Bank, July 2002).
1.2. Objective of the Study
The main objectives of the present study are to investigate linkages between
poverty and environment and to draw concrete policy recommendations and
practical measures that address environmental concerns to be integrated
into poverty reduction strategy by using a right-based approach in
Indonesia.
Specifically, this study attempts to analyze particular issues, including:
1) Trends in poverty profiles in Indonesia
2) Linkages between poverty and environment in Indonesian context
3) Environment and livelihood of the poor
4) Environmental health of the poor

5) Possible policy options for integrating environmental and natural
resources management into poverty reduction strategy in Indonesia,
both at the national and regional level, by taking into account the
application of right-based approach and decentralization-related issues.
1.3. Methodology
Analysis applied in this study is based on quantitative and qualitative data.
Quantitative data was obtained from the available macro data collected by
BPS, including raw data from the results of National Socio-economic
Surveys (SUSENAS), Village Potential Census (PODES) and various
published data. Detailed information on the methodological issues and
results of quantitative data analysis is given in Annex 1. Qualitative
information was gathered from the results of field visits in several selected
districts, including Karo (North Sumatera), Bandar Lampung (Lampung),
Malang, Surabaya, Lamongan, Tuban dan Ngawi (East Java) as well as
Pontianak and Landak (West Kalimantan). During field visits, a series of
public consultations with local authorities, focus group discussion (FGD)
and in-depth interviews with poor communities were carried out to get
information on the above issues being observed. Reports on the results of
FGD are provided in Annex 2.
1.4. Scope of the Study
The study attempts to provide a comprehensive analysis on the linkages
between poverty and environment. However, the available data confined the
results of analysis. Lack of data is particularly related to issues on forestry
data, impacts of illegal logging on the livelihood of the poor, land
distribution, impacts of environmental hazards (urban air pollution and
exposure to agroindustrial chemicals and waste that are caused by
development that lack environmental safeguards) on poverty, and data on
DALY (disability-adjusted life years) to measure burden of diseases
experienced by population as an impact indicator of health intervention
programs on the improvement of the overall health condition of the
population. Data on the vulnerability of the poor over changes in
environmental conditions is also inadequately available.
Given that data limitation, the scope of the study thus will be restricted to
focus on the particular dimensions of livelihood and environmental health in
analyzing poverty-environment linkages. This includes dependency of the
poor on natural resources and the likely impacts of deforestation and over-
fishing on the livelihood of the poor, environmental-related ill health
indicators and the incidence poverty with focus on less provisioning for and
less affordability of the poor to safe drinking water and improved sanitation.

2. Findings
2.1. Poverty Profile in Indonesia
Over three decades leading up to the advent of the 1997 economic crisis,
broad-based improvement in living standard bringing about rapid poverty
reduction has become a success story in Indonesia’s contemporary
development. This spectacular stride in poverty reduction was fairly
consistent with high economic growth, relatively low inequality and
improved human development indicators. However, the crisis has
immediately revealed the shakiness of those development gains, with a
substantial number of Indonesian people falling back into destitution. It is
therefore worthwhile to briefly discuss poverty profile in Indonesia before
the analysis proceeds to focus on poverty-environment linkages.
Figure 1 Indonesia: Trend in Poverty Incidence, 1976-2003
%poor, U
%poor, R
%poor, Total
No.of poor, U
No.of poor, R
No.of poor, Total
0
10
20
30
40
50
1976 1978 1980 1981 1984 1987 1990 1993 1996 1996 1999 2002 2003
Note: Trend for 1996-2003 uses the revised 1998 standard to measure poverty
bundles.
%
0
10
20
30
40
50
Millionpeople
(Source: BPS, series of Susenas data)
Figure 1 depicts an evolution of head-count ratio in Indonesia from 1976 to
2003 based on the official estimates. Poverty has consistently declined from
around 54 million people (40%) in 1976 to just over 22.5 million (11%) in
1996. However, the economic crisis in 1997 and followed by the long
drought during the year adversely affected the overall macroeconomic
condition, and most importantly, people’s welfare. Following the
skyrocketing prices and severe drop in average real income in 1998, the
number of the poor was estimated to reach around 48 million (23.4%) by
1999. Since then, poverty showed a gradual recovery from that temporary

crisis peak. As rice prices were stabilized and real wages recovered in 2000,
the number of poor dropped to around 38.7 million (19.1%). This figure
continued to decline slightly to 38.4 million (19.2%) in 2002 and to 37.3
million (17.4%) in 2003, approaching to the figures prior to the crisis in
1996.
Of 37.3 million poor people in 2003, nearly two-thirds lived in rural areas,
markedly different from the previous urban-rural poverty compositions: 18-
82 in 1976 and 28-72 in 1996. This “more balance” in urban-rural poverty
distribution was consistent with improvement in poverty level in rural
relative to that in urban Indonesia during the last three decades. Notably
between 1976 and 1996, the absolute number of poor in rural areas jumped
down from 44.2 million to 15.3 million, or a decline at around 1.6 million
per year. At the same period, urban poor reduced slightly from 10 million to
7.2 million people, or a deficit of mere 140,000 poor people annually.
Regional differentials in poverty showed that while the absolute number of
poor was disproportionately in Western Indonesia, the incidence of poverty
was higher in Eastern than in Western region. By 2003, of 37.3 million poor
people, nearly 80% (29.6 million) resided in Western Indonesia―with Java
and Bali alone covering 58% (21.5 million), whereas the remaining 20%
(7.7 million) lived in Eastern Indonesia.TP
3
PT In term of the incidence, poverty
level in Western region was 16.9% to the total population in 2003, as
compared to 19.6% in Eastern region. Figure below provides a snapshot of
poverty map by districts in Indonesia.
Figure 2 Poverty Mapping by Districts in Indonesia, 2003
TP
3
PT BPS-Statistics Indonesia (2004), Statistical Yearbook of Indonesia 2003, Jakarta: BPS, Table 12.2.

Moreover, absolute poverty means more than low income. It also signifies a
lack of permanently productive employment, malnutrition, poor health, lack
of education, poor housing condition, poor access to basic services and less
security. Table 1 provides some key dimensions of poverty in Indonesia. In
terms of the incidence, poverty level was around 17% among female-headed
households, comparable to the national figure. However, the poverty
incidence was found fairly high (19 – 32%) among households with less
educated heads of families and less productive jobs, among those with large
family size, less per capita housing floor area, without access to safe
drinking water, sanitation and electricity. With respect to the main
characteristics of the poor, as measured by the proportions of households
with these respective characteristics to the total poor household, table 1
reports an imperative insight. The poor were most likely to be headed by
those with less education (made up of 81% to total poor households), with
dependence on agricultural income sources (61%), or with dependence on
self-employed income sources (64%), and they tended to have reasonably
high family size (72%).
Table 1 Indonesia: Who Are The Poor in 2002?
% poor to total
specified
households
(head-count ratio)
% share to all
poor
households
1. Female-headed households 17 50
2. Head of household with primary school or less 20 81
* Rural 21 86
* Urban 19 72
3. Main income source from agriculture 22 61
* Rural 28 78
* Urban 21 29
4. Self-employed + unpaid family workers 19 64
* Rural 20 73
* Urban 16 46
5. Average family size: 5 persons or more 30 72
* Rural 37 71
* Urban 24 75
6. Average housing floor area: ≤8 m2/person 32 42
* Rural 36 42
* Urban 26 44
7. Without pipe/pump/protected water source 25 34
* Rural 24 43
* Urban 28 19
8. Without sanitation 27 45
* Rural 24 51
* Urban 34 35
9. No electricity 31 22
* Rural 30 32
* Urban 47 6
Source: BPS, Raw data of Susenas core 2002.

Another dimension of poverty profile in Indonesia was characterized by e
g slightly above the poverty line, or
class, 2002
th
existence of a bulk of people livin
commonly called as near poor. Provided that expenditure distribution of
Indonesia’s population is typically skewed to the left-side, as depicted in
Figure 3, the number of near poor by 2002 was estimated at around 19
million people in rural and 8 million in urban, respectively making up of
17% and 9% of total population in each area.4
These near poor were
extremely vulnerable to the risk of falling into poverty due to major shocks
directly affecting the sustenance of their livelihood, such as the economic
crisis, natural disaster, and widespread social conflicts.5
Figure 3 Indonesia: Population distribution by expenditure
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
10000000
11000000
12000000
13000000
14000000
15000000
16000000
17000000
18000000
19000000
20000000
21000000
22000000
23000000
24000000
25000000
26000000
27000000
<60000
80000-100000
120000-140000
160000-180000
200000-220000
240000-260000
280000-300000
320000-340000
360000-380000
400000-420000
440000-460000
480000-500000
520000-540000
560000-580000
600000-620000
640000-660000
680000-700000
720000-740000
760000-780000
800000-820000
840000-860000
880000-800000
920000-940000
960000-980000
1000000-1020000
1040000-1060000
1080000-1100000
1120000-1140000
1160000-1180000
1200000-1220000
1240000-1260000
1280000-1300000
1320000-1340000
1360000-1380000
1400000-1420000
1440000-1460000
1480000-1500000
Expenditure Class (rupiah/month/capita)
Numberofpopulation(persons)
Indonesia
Urban
Rural
(Source : BPS, Raw data Susenas 2002 Consumption Module)
4
This calculation is made by applying the official poverty line of 96,512 rupiah and 130,499
rupiah/month/capita for rural and urban area respectively in 2002.
5
As clearly exemplified by the social impacts of the 1997/1998 economic crisis, the presence of these
near poor brought about a sharp increase in the number of poor people, yet temporarily in nature when
the prices were stabilized and their living standard recovered (see BPS and UNDP, 1999, Crisis,
Poverty and Human Development in Indonesia 1998, Jakarta: BPS, for further discussion on this issue).

Finally, discussing poverty profiles is not comprehensive if it does not
address issue related to income/expenditure inequality among population
with different income groups. Figure 4 provides a useful insight on the long-
term trend of inequality in Indonesia. In general, Gini coefficient in
Indonesia is reasonably low, ranging between 0.32 and 0.38, indicating a
moderate inequality in income distribution. Trend in inequality during the
last four decades tended to be relatively stable, yet slightly declining with
exceptions for increases in 1978 and 1996.
Figure 4 Indonesia: Long term trend in Gini Coefficient, 1964 – 2002
0,2
0,22
0,24
0,26
0,28
0,3
0,32
0,34
0,36
0,38
0,4
1964 1969 1976 1978 1980 1981 1984 1987 1990 1993 1996 1998 1999 2002 2003
Ginicoefficient
Urban Rural Indonesia
(Source: BPS, series of Susenas data)
It is worth noting that the increased inequality occured when the economy
was booming. When Gini ratio rised from 0.34 in 1976 to 0.38 in 1978,
annual economic growth rate was 6.9% in 1976, 8.9% in 1977 and 7.7% in
1978. Likewise, when the ratio went up from 0.32 in 1990 to 0.34 in 1993
and 0.36 in 1996, the economy was booming with the growth rate above 7%
annually. On the contrary, the declining inequality was in line with the
slowing down of the economy. Bleak performance of the Indonesia
economy during the 1980s due to the falling price of oil was followed by the
declining inequality. A similar pattern also occured during the 1997/1998
economic crisis―with a growth rate minus 13%, inequality also dropped.
Figure 4 also clearly shows that Gini ratio in rural Indonesia was lower than
in urban area. The gap in ratio between both areas tended to widen over
time, suggesting an improvement in income distribution among rural
population and the persisting inequality among urban population.

2.2. Linkages between Poverty and Environment
Prior to examine the linkages between poverty and environment, it is first
important to develop similar perspective on the definition of poverty and
environment. This report further adopts the definition of poverty developed
by the World Development Report 2000/2001.
Poverty is pronounced deprivation in well being. Poverty is now
widely viewed as encompassing both income and non-income
dimensions of deprivation – including lack of income and other
material means; lack of access to basic social services such as
education, health, and safe water; lack of personal security; and
lack of empowerment to participate in the political process and in
decisions that influence someone’s life.6
Furthermore, the final draft of Indonesia’ National Poverty Reduction
Strategy Paper (Strategi Nasional Penanggulangan Kemiskinan /SNPK)
defines poverty as failure in fulfilling basic rights that are necessary for an
individual or a group of people to survive and live in dignity. The basic
rights include access to land and natural resources as one of the most
important well-being indicators. Concurrently, the results of FGD in West
Kalimantan and East Java reveal that rural poor community owns similar
perspective of the well-being. Farmer community in West Kalimantan
defines those who have no access to land for growing crops as the poor.
Likewise, the fishermen community in East Java are deemed as the poor
when they earn their livelihoods as daily wage-laborers.
With regards to the definition of environment, this report further refers to
the Law number 23/1997 on Environmental Management. The law clearly
defines the environment as a spatial unit with every thing, resource,
condition and living creature including human being and its behaviors that
affect the survival and welfare of all mankind. In addition, academic
literatures also describe the environment as all external conditions and
factors, living and nonliving (chemical and energy) that affect an organism
or other specified system during its lifetime.7
The environment provides
goods (natural resources) and services (ecosystem functions) for food
production, the harvesting of wild products, energy, and raw materials. The
environment is also a recipient and partial recycler of waste products from
the economic activities and an important source of recreation, beauty,
spiritual and other amenities.8
Theoretically, the linkages between poverty and environment have
apparently been discussed since the Malthusian era which focused on the
6
The World Development Report, 2000/2001
7
G. Tyler Miller, Environmental Science: Working with the Earth, 9th
edition 2003
8
DFID, EC, UNDP, and the World Bank, Linking Poverty Reduction and Environmental Management,
Policy Challenges and Opportunities, July 2002

“vicious circle” between poverty and degradation, where the farmers,
pushed by population increase and poverty incidence, extend cropping into
fragile marginal lands and degrade them.9
However, this understanding has
further been improved where poverty and environment linkages are viewed
as a dynamic and contextually specific issue – reflecting both geographic
location and the economic, social and cultural characteristics of individuals,
households and social groups. Various social groups have different priority
towards environmental issues. In rural areas, poor people are particularly
concerned with secure access to and the quality of natural resources – arable
land, water, crop and livestock diversity, fish, forest product and biomass for
fuel. Among the urban poor, water, energy, sanitation and waste removal,
drainage, and secure tenure are their key concerns. 10
Moreover, during the World Summit on Sustainable Development (WSSD)
in Johannesburg 2002, linkages between poverty and environment were
intensively discussed following the launching of a report titled “Linking
Poverty Reduction and Environmental Management” (DFID, EC, UNDP,
and the World Bank, 2002). The report presents a simplified framework to
understand how environmental management is related to poverty reduction
and why these poverty-environment linkages must be at the core of action to
achieve the Millennium Development Goals (see Figure 5 for MDG and
Environment Framework).11
Provided the lack of data as noted earlier, the
next section will focus on discussing the two dimensions where poverty and
environment are overlapped namely livelihoods and environmental health.
Figure 5 MDG and Environment Framework
Ensure sound and
equitable management of
natural resources
Maintain ecosystem health
and services
Ensure access to safe water
and sanitation
Improve air quality and limit
exposure to toxic chemicals
Reduce and mitigate natural
disasters and resource-based
conflict
Reduce and mitigate
climate variability and change
Enhance
livelihoods
Improve
health
Reduce
vulnerability
Goal 1:
Eradicate extreme poverty
and hunger
Goal 3:
Promote gender equality
and empower women
Goal 4:
Reduce child mortality
Goal 6:
Combat major diseases
Goal 2:
Achieve universal primary
education
Goal 7:
Ensure environmental
sustainability
Source: Linking Poverty Reduction and Environmental Management, Policy Challenges and Opportunities, DFID,
9
Reardon, Thomas, and Stephen A. Vosti (1995) ‘Links between rural poverty and the environment in
developing countries: asset categories and investment poverty’. World Development 23, 9: 1495- 1506
10
DFID, EC, UNDP, and the World Bank, Linking Poverty Reduction and Environmental
Management, Policy Challenges and Opportunities, July 2002
11
idem

2.3. Livelihoods and the Environment
The poor, particularly, those living in rural areas, often rely heavily on
a range of environmental goods (natural resources) and functions
(ecosystem service) for their livelihoods.12
Natural Resources
Statistical analysis reveals that 41% of the poor households in Indonesia
depend their living on agricultural activities including growing food crops,
animal husbandry, mixed farming, estate crops, fisheries, forestry, and
hunting (see Table 2). In addition, about 31.4% of the poor made their living
from mining activities, which includes extracting coal, oil and gas,
quarrying sand, stone and clay and other metals. Approximately 90-95% of
the poor households engaged in the mining and agricultural activities
resided in rural areas.13
Both environmental conditions and access to a
variety of natural resources are therefore crucial for the poor to sustain their
livelihoods, thus degradation of the resources would mostly hurt the poorest
group in the society.
Table 2 Indonesia: Dependency of the Poor on Natural Resources-based
Economic Activities, 2002
Poor households in specified
sector, as % to total number
of households
(Head-count index)
Poor households in specified
sector, as % to all poor
households
Natural resources-
based economic
sector as
households’ main
livelihood Urban Rural Total Urban Rural Total
Agriculture 1.25 9.27 10.52 8.53 32.17 40.70
Mining 0.58 8.31 8.90 3.12 28.29 31.41
(Source: BPS, Susenas Raw Data, 2002)
Furthermore, analysis on PODES 2002 data shows a moderate correlation of
0.32 between the percentage of poor households and percentage of
household living in marginal land at district level.14
The figure implies that
the poor household in Indonesia tended to reside in marginal land and
infertile agricultural land such as deforested land and abandoned mining
area. This situation is further aggravated by limited access of the poor to
land and other natural resources as indicated by inequality of land
distribution between the poor and the better-off. The available data shows
that there was a significantly unequal distribution in agricultural land
holding among the farmer households in Indonesia with a gini ratio of 0.56
in 2003. 15
12
13
SUSENAS Data 2002
14
Village Potential Survey 2002 conducted by Indonesia’ Central Statistic Bureau
15
Preliminary result of the 2003 Agricultural Census data

Data in 1993 show an extremely unbalanced distribution of agricultural land
holding (BPS, 1995). Poor farmers holding less than 0.5 hectare were made
up to 70% of total rural households, but they held only 13% of the overall
land holding area in the country. By contrast, better-off farmers holding
more than 1 hectare covered only 16% of total rural households, but they
occupied around 69% of the overall land holding area. Moreover, the
percentage of the peasant farmers who held less than 0.5 hectare of land on
average increased by 2.39% within the past ten years. The increase was
faster in Java Island almost by 5% compared to 3% in Outer Java.
Figure 6 suggests that the income of farm laborers and poor farmers holding
less than 0.5 hectare of agricultural land were constantly at the lowest ladder
of the income groups in the country during the last two decades. These
farmers only earned halve of the national average income, which was
comparable to the income earned by the farmers holding one hectare of
agricultural land or more. This inequality in land distribution often compels
the peasant farmers to use the limited land possessed, which is already in
critical condition, to the maximum productivity level of resource use in
order to sustain their life. Soil and water degradation and the loss of pest and
drought-resistant crop and livestock varieties thus become major threat.
Figure 6 Indonesia: Ratio of per capita disposable income to the national averaged income
among economic groups of households, 1975–1999 (the national average = 100%)
Rural non-farming, high income
Urban non-farming, high income
0
50
100
150
200
250
300
1980 1985 1990 1993 1995 1999
%
Farm laborer
Own farms of 0.5 ha
or less
Own farms of 0.501-
1.0 ha ha or less
Own farms of 1.0 ha
or over
Rural non-farming, low
income
Rural non-labor force
Rural non-farming,
high income
Urban non-farming,
low income
Urban non-labor force
Urban non-farming,
high income
(Source: Calculated from Sosioeconomic Accounting Matrix or SAM, BPS, 1999)

Ecosystem Services
Ecosystem such as forests, grassland, freshwater and coastal
ecosystems provide essential ‘service’ that contribute in numerous
ways to the productive activities of rural and urban populations.
These services are ‘public goods’, providing indirect values that are
not consumed or traded in the market place, but which are vital to
the livelihoods of the poor, especially in more marginal
environment or where the poor have limited access to external
technology and other inputs16
Ecosystem services are defined as the natural services or natural capitals that
support life on the earth and essential to the quality of human life and the
functioning of the worlds’ economies.17
Some of the very significant
services provided by the ecosystem include the function of watershed
protection and maintenance of hydrological cycles, including recharging of
water tables and buffering of the extreme hydrological conditions which
might otherwise precipitate drought or flood condition. Furthermore, the
ecosystem also plays its role in maintaining soil fertility storage and in
cycling the essential nutrients. Both hydrological cycles and soil fertility
maintenances are very crucial for Indonesia as the agrarian country where
almost 40% of the poor populations are engaged in agricultural activities.
In Indonesia, more than 16 million people live in the country’s 15 largest
watersheds. The forests help protect freshwater supplies by stabilizing soil
on hillslopes and regulating the speed and timing of river flow.18
Disturbance to these functions will affect the sustainability of the poor’s
livelihoods. Local people in Kayu Tanam village, West Kalimantan, for
instance, convinced that water supply for both drinking and agricultural
purposes decrease significantly following the massive rate of deforestation
partly due to wide-spread shifting cultivation. This has led to the drying up
of two main rivers where people usually obtain the water for household and
agricultural purposes. As the poor people in this village relied heavily on
growing crops in the wetland for their sources of livelihoods, decrease in
water resources therefore hurt them. Figure 7 attempts to illustrate trend of
water supply versus forest cover over time in Kayu Tanam village, West
Kalimantan, based on result of Focus Group Discussion (FGD) among local
community. The group discussion concluded that rapid decline in forest
cover especially in the 1980s was followed by significant drop in water
supply.
16
Koziell, I. and J. Saunders. 2001. Living off Biodiversity: Exploring Livelihoods and
Biodiversity Issues in Natural Resources Management. IIED, London
17
G. Tyler Miller, Environmental Science: Working with the Earth, 9th
edition 2003
18
Forest Watch Indonesia, The State of Forest: Indonesia, 2003

Figure 7 Trend of Water Supply and Forest Cover in Kayu Tanam Village, West
Kalimantan
2.3.1. Forests and Poverty Nexus
Issue on poverty and deforestation linkages can not be simply explained
using the macro data analysis. The linkages are often locally specific
depending on geographical and cultural condition of the local people.
From a result of series of FGDs in different villages of Mandor Sub-
District, Landak - West Kalimantan, each village revealed completely
diverse perspective with regard to poverty and deforestation nexus.
According to people of Mandor Village in Mandor Sub-District, massive
deforestation occurring in their village was mostly caused by illegal gold
mining practiced by local villagers. People in Kayu Tanam Village, where
is located nearby Mandor Village, however accused illegal logging as the
main causes of deforestation by which the poor were engaged to gain
legitimatization of this illegal activity. Moreover, difficulty in
understanding the nature of relationship between forest and poverty is
further complicated by lack of reliable data. In Indonesia, forestry data is
far from comprehensive, and the figures are frequently inconsistent
between different sources. This report hence attempts to explain the
forest-poverty nexus using most readily available data, which was
published by the Forest Watch Indonesia and the World Bank.
The World Bank (2002) in its report titled ‘Environment and Natural
Resources Management in Transition’ mentions that main causes of
Indonesia massive deforestation were the large scale conversion into
timber or estate crops, small holder conversion, and unsustainable
illegal logging. The smallholder category had been overrated as cause of
deforestation since the government tended to relate deforestation, and

especially the forest fires, to “shifting cultivators”. 19
However, the
overall impact of shifting cultivation on the forest cover is relatively
small. During the 1997 forests fires, the Government at last
acknowledged that the large plantation companies, forestry
conglomerates and transmigration contractors were primarily
responsible for setting the fires in the course of clearing land.
Commercial development, especially for oil palm plantations, has
become the main agent in accelerating the process of deforestation
during 1990s.20
Figure 8 Processes of Forest Degradation and Deforestation in Indonesia
(Source: Forest Watch Indonesia, The State of Forest: Indonesia, 2003)
Furthermore, Figure 8 above aims to picture direct and indirect causes
of deforestation, as well as the prevailing condition that makes
deforestation is more likely to occur (Forest Watch, 2003). From the
19
Traditional farmers who practice rotational farming
20
The World Bank, Environment and Natural Resources Management in Transition, 2003

figure, one could argue that commercial activities in forest areas are the
main causes of deforestation while small scale farmers contributed only
a small portion to the forest degradation. In addition, forest degradation
by small scale farmers is mainly driven by the immediate causes of rural
poverty and landlessness. The incidence of poverty and landlessness
was very much related to the official indifference to traditional forest
land and resource rights. In the Island of Kalimantan for instance,
almost the entire land under forest is currently being designated for
logging concession that is mainly given to the large companies (See
Figure 9). Only few low access forest areas are left. Furthermore,
Ministry of Forestry reported that 30% of the forest under this logging
concession was in damaged condition.21
Figure 9 Forest Cover and Logging Concession in Kalimantan Island in 199722
(Source: Forest Watch Indonesia, 2003)
According to Scherr (1999), property rights to resources such as land,
water, and trees play a fundamental role in poverty-environment
nexus.23
Property rights consist of a various set of tenure rules and other
aspects of resource access which are important for natural resources
management. Possessing property right means providing access to
income generation from using the resources, therefore, guaranteeing
property rights equally and fairly has a direct relationship with the
distribution of wealth. Property rights held by poor people are their key
assets that may provide income opportunities to meet essential
household subsistent needs and to provide a means to sustain their
21
The World Bank, Environment and Natural Resources Management in Transition, 2003
22
This 1997 forestry data is believed as the most reliable data to this point.
23
Scherr, S. 1999. Poverty-Environment Interaction in Agriculture: Key Factors and Policy
Implications. Poverty and Environment Initiative Background Paper 3, UNDP, New York

livelihoods.24
When the poor possess very few property rights and have
little access to natural resources, the level of resource use necessary to
sustain life is very close to its maximum productivity level of resource.
Even short periods of ecological stress may upset delicate balance of
ecosystem leading to a downward spiral of resource degradation and
declining resource productivity.25
One sound illustration in strengthening resource rights for the poor is
the concept of Community Forestry, which is implemented in Sumber
Agung, Lampung. Forestry Ministerial Decree 677/1999 legalized
forestry user groups by giving them rights to use and manage specified
plot of land in the conservation forest area. The local communities has
engaged in agro-forestry for living since 1940s by planting coffee,
cacao, fruits, and rubber in the area that was later designated as a
conservation area. Prior to 1999, regardless of the conservation status
given to the area and the ban to undertake any activity inside the
conservation area, the local people stealthily continued their activity
inside the area.26
Surprisingly, after the rights to manage the area were given by the
Government, the forest condition is currently in an improved condition
compared prior to the rights guaranteed. Moreover, from the social and
economic points of view, the villagers are better off than before. This
can be seen from the improvement of housing quality and ownership of
new motorcycles, etc. The people explained that since the land rights
have been provided, the local people can optimally use the resources for
improving their livelihoods and surrounding environment at all. This
thus not only results in better harvest but also gives incentives for the
people to protect the forest.
2.3.2. Poverty and Coastal Degradation
Coastal zones, which are one of the major ecosystems of Indonesia’s
biosphere, possess unique characteristics. Coastal zones represent an
intermediate habitat between sea, land and fresh waters, which provides
a complex and dynamic mixture of transitional ecosystem conditions.27
Fishery activities taken place in Indonesia’s coastal zones generally
differ between western and eastern parts of Indonesia.
24
25
Baltzer, K. Property Rights and the Use of Natural Resources, Institute of Economics, University of
Copenhagen, 2004
26
Safitri, M, Decentralizing, Local Rules, and Forest Management: Creating A Shared Responsibility
in Forest Protection, the Case of Lampung, Indonesia, 2004
27
Sukardjo, S. Integrated Coastal Zone Management (ICZM) in Indonesia: A View from a Mangrove
Ecologist, Southeast Asian Studies, Vol. 40, No.2, September 2002

In the west, the fisheries occur in relative shallow and fertile waters of
the Sunda Strait where population pressure has continuously been
bringing about the rapidly growing number of fishermen engaged in
limited coastal resources. Moreover, trawling practices began in the late
1960s and increased rapidly in the following years. The trawlers
operated in inshore waters where they damaged the gear of the small-
scale fishermen and took large amounts of various fishes. As a
consequence, most small-scale fishermen are poor as they earn meager
income for their subsistent livelihood. Conflict between the trawlers and
small-scale fishermen led to a total ban on trawling except in parts of
the eastern area of the country, where trawling is permitted provided the
nets are equipped with by-catch excluder devices (BEDs). Thus, except
for a growing amount of purse seine fisheries in Java Sea and Malacca
Strait as well as in the Indian Ocean, the western part of the country is
dominated by small-scale fisheries.28
In brief, coastal resources have increasingly been over-exploiting as
population continues to grow. Over-fishing is however a complex
problem with varied impacts on coastal communities and ecosystem, as
well as regional economy. Fishing activities on particular species should
not cause the decline in the amount needed for balancing the life cycle
of these species at a given survival rate. However, widespread poverty
and the generally open-access nature of the coastal zone brings about an
unprecedented over-exploitation of marine resources that nearly reaches
a level of unsustainable fisheries, owing to over-fishing by highly profit-
oriented fishing operations and the continuously growing number of
subsistent fishermen. 29
When over-fishing is caused by large-scale
commercial operations, government interventions and enforcement may
be the key to overcoming the problem. Key element in improving
compliance with fishing regulations includes the development of
alternative livelihoods, the implementation of small fishing and the
involvement of fishermen in decision making process. 30
Issues on over-exploitation as mentioned above are closely related to the
impact of development on open access resources like in coastal areas.
Open access resources represent resources that do not carry a market
price and without institutional mechanisms to exclude potential
beneficiaries. These conditions therefore result in danger of being
overused and consequently degraded resources. The nature open access
resource is unlikely to elicit investment and maintenance as well as
protection of the resources. There is a strong tendency in developing
countries that open-access resources are often more degraded in densely
28
FAO, Fisheries Country Profile, The Republic of Indonesia, May 2000,
http://www.fao.org/fi/fcp/en/IDN/profile.htm visited on 5th January 2005
29
idem
30
idem

populated areas than in remote and rarely populated locations. This
phenomenon leads to the general presumption that development,
especially in its early stages, is detrimental to environmental resources
management, such as the coastal zone. On the other hand, expanding
employment opportunities might counteract this pressure on open access
resources.TP
31
PT
Constant pressure to the ecosystems discussed above threatens the
biodiversity and resources productivity, and this pressure puts the poorer
community at risks due to lack of alternative sources of food.TP
32
PT During
the FGD among fishermen community in East Java, following issues on
coastal degradation and poverty are found:
• Over-exploitation of the marine resources was mainly caused
by increase in number of fishermen and more sophisticated
fishing equipment or technique. The usage of trawler has been
identified by the fishermen in East Java as the major causes of
reduction in fish catches. The trawler, which is able to seize
every object in the water including tiny fish eggs, is very likely
to destroy coral reefs – the important feeding ground of the
fishes. Furthermore, operation of illegal catching by foreign
ships which mainly operate trawls and fine-nets also becomes a
threat to the already degraded resources.
• Pollution generated from the land-based activities such as waste
disposal from industrial activities was also reported. These
industrial activities include petrochemical company discharging
the waste to the sea without proper monitoring, thus leading to
the reduction in fish catches as it has destroyed the surrounding
coral reefs and mangrove.
• Habitat modification including damage to coral reefs and
conversion of mangrove to settlement, industrial estate, and
shrimp ponds is often found in the country’s coastal area
particularly in East Java. Coral reefs damage in East Java
coastal zone was caused mostly by the usage of trawlers.
Reports from other regions in Indonesia reveal that coral
mining, the usage of explosive and poisons to harvest reed dish
and other biota and by sedimentation from upland soil erosion
also resulted in the damage of the coral reefs.TP
33
PT
Several other issues faced by the poor community were also revealed
during the FGD in Lamongan and Tuban. Among these include the
importance of income alternative sources for the fishermen. The
livelihood of the poor fishermen communities are constantly subject to
TP
31
PT Liese, C, Martin D. Smith, Randall A. Kramer, Open Access with Product and Labor Market
Failure: The Case of Artisanal Fishing in Indonesia, Duke University, April 2003
TP
32
PT United Nations University , Conserving Our Coastal Environment, UNU 2002
TP
33
PT United Nations University , Conserving Our Coastal Environment, UNU 2002

hardships related the seasonal cycles of fishing periods. During the rainy
season, when the seas are rough with strong wind and storms, the
fisherman cannot venture into the sea. They can only conduct their
fishing activity nearby the shoreline and the fish catches are
consequently dwindling sharply. As the poor rarely have protection
against these seasonal stress periods due to lack of alternative sources of
income and savings, they are thus compelled to over-exploit the
resources in nearby shoreline by operating mini-trawls. The use of mini-
trawl has also damaged the coral reefs. In these poor communities that
rely heavily on natural resources for their livelihoods, cycles of over-
exploitation can therefore occur due to the continuous degradation of
natural resources, and lack of alternatives income generation.
2.3.3. Conclusion and Recommendation
The following section aims to conclude the main issues found in the
study with regard to livelihoods-environment linkages, as well as to
present recommendation and necessary policy interventions.
Access to Resources (Property Rights) In the case of Indonesia, where
land and natural resources are distributed unequally and mostly held by
the elites, the poor people are then pushed into the marginal land. Lack
of access to land and resources among the poor to sustain their
livelihood further compels them to use the limited resources possessed
into the maximum productivity level that further aggravates the
resources condition. Degradation of the only resources accessed by the
poor as sources of their livelihoods will decrease resources productivity
which instead traps the poor into a constant destitution. Moreover,
resources that are held by the elites are not at all in a good condition.
For instance, the forest resources, which are mainly held by logging
companies, are currently in dire condition. Figure 10 aims to picture the
hypothetical linkages between access to natural resources and poverty in
Indonesia.

Figure 10 Poverty and Access to Resources
Experience from Sumber Agung Village shows that when an individual
is guaranteed to use and benefit from the resources, he cautiously has
incentive to invest in conserving and protecting the resources. The
provision of rights to use and manage the natural resources by those
groups who heavily rely on the resources can hence be an effective
strategy for preserving the eco-systems. Guaranteeing a wide equal
access to natural resource for the poor helps to promote effort to sustain
national development.
However, full control over natural resources will not always be the best
solution to environmental protection as the poor communities may lack
the skills, information and understanding on how to manage these
resources effectively and responsibly. Before assisting the communities
to formalize their rights to natural resources, experience shows that it is
important to educate the communities to be aware of environmental
impact of their actions and to maintain the ecosystem.34
Furthermore,
the right on paper are necessary but insufficient as the highly
marginalized groups lacking organization and resources may be unable
to realize their formal rights. It is hence necessary to give them leverage
to lobby for realization of rights.
Alternative Sources of Income One important issue related to the poor
communities in coastal areas is the need for providing alternative
Access to resources
held by elites, not equally
distributed
The poor are pushed to
marginal land
Degraded natural
resources
Low productivity of
resources use
34
Emilie Filmer-Wilson and Michael Anderson, Integrating Human Rights into Energy and
Environment Programming, UNDP, 2004

income generating activities. As most poor fishermen heavily depend on
marine resource for their livelihood, a key strategy to reduce the
pressures caused by this dependence is to help the poor create
alternative economic activities as their coping mechanism. Only with
such strategies, the economic activities, which drive the escalating
degradation and pressure over the limited marine resources, can be
redirected thus the subsequent over-fishing can be reduced.
Finally, establishment of regulation to manage commercial and
industrial activity is necessary to protect the quality of natural resources
and environment. Degradation of the resources due to the
commercialization and industrialization during the process of
development will first hit the poorest group in the country. It is hence
important to integrate environmental consideration into development
planning process in a systematic and continuous way, both at the policy
formulation and programme management levels.
2.4. Environmental Health
2.4.1. Poverty, health and the environment
Poverty, environmental-related ill health and sustainable development
are inextricably linked. Improved health is both an outcome of and a
condition for achieving equitable economic growth and poverty
reduction. Human health is essential for sustainable development since
without health, human beings would not be able to combat poverty or to
care for their environment. Especially among the poor, illness will
immediately affect their household daily livelihood as they are forced to
be out of their casual work. Managing environment health risk is thus
essential for the sustenance of livelihood and the improvement in health
conditions of the poor.
Environmental health shall be conceptualized as the prevention and
reduction of risk through control of human exposure to harmful
environmental factors. There are obvious differences in the context of
environmental health between rural and urban areas. Accesses to
housing, safe water and adequate sanitation are more commercialized in
urban areas than in rural areas. Health risks are also much more affected
by densely populated settlement and production activities in urban areas
than in rural area. The poor are also most likely vulnerable to the
incidence of infectious and parasitic diseases, morbidity and mortality,
as they live and work in unhygienic conditions.35
Lower income groups
35
Bradley, David, Carolyn Stephens, Sandy Cairncross and Trudy Harpham (1991), A Review of
Environmental Health Impacts in Developing Country Cities, Urban Management Program Discussion
Paper No. 6, The World Bank, UNDP and UNCHS (Habitat), Washington DC, 58 pages.

generally have more dangerous working environment where
occupational hazards constantly threaten them.
The poor are commonly the least able to afford the homes that protect
against environmental hazards, such as good quality housing in
neighborhood with piped or safe water and adequate provision for
sanitation, garbage collection, paved roads and drains. In Indonesia as a
whole, households with access to safe water were made up of 45% by
2003, with 56% for urban dwellers as compared to only 37% for their
rural counterparts (see Figure 11). Among the lowest income (quintile
1), the figure was 37%, or much lower than those of the higher income
groups. Similarly, those with access to sanitation were around 64%,
with 75% for urban and 54% for rural (Figure 12). Among the lowest
income group, the figure was 54%, as compared to around 70% among
the highest income groups.
Figure 11 Indonesia: % Households with Access to Safe Water by
Expenditure Quintiles, 2003
(Source: BPS, Susenas, 2003)

Figure 12 Indonesia: % Households with Access to Sanitation by
Expenditure Quintiles, 2003
Relatively low proportions of households with accesses to safe water
and sanitation undoubtedly in part led to high exposure to various
environmental-related diseases. Available data indicates that around
one-thirds of death in Indonesia was most likely caused by
environmental-related diseases, such as acute respiratory infections,
diarrhea and tuberculosis.36
In order to look at the magnitude of environmental health risks among
the poor in Indonesia, the study uses infant mortality rate (IMR) as a
proxy of health performance indicators provided the unavailability of
DALY statistics as noted in Section 1.4. IMR as an outcome and impact
indicator for health interventions may reflect multifaceted dimensions of
poverty, including low income, poor access to inadequate sanitation and
safe water supply, poor housing conditions and bad surrounding
environment. Figure 13 attempts to examine the associations between
poverty, health outcome as indicated by IMR and environmental health-
related indicators (i.e. accesses to safe water and sanitation).37
First, for
Indonesia as a whole, there was a moderately positive association
between the incidence of poverty and IMR, with a Pearson’s r of 0.42. It
means that the higher poverty level in a particular district the higher
IMR in this district. As might be expected, this association suggests that
access to health services in relation to maternal, pre- and post-natal are
less affordable by the poor, thus leading to potential death risk for their
newly born infants.
36
See Kandun, I.N. (1998) Pencegahan dan Pemberantasan Penyakit Berbasis Lingkungan, Perpektif
Baru dalam Kesehatan (Prevention and eradication of environmental-based diseases, a New health
Perspective) Jakarta: Departemen Kesehatan.
37
This is a very simple exercise to provide the extent to which regional variations (using districts as
unit of analysis) in poverty are correlated (Pearson’s correlation) with variations in IMR, the
percentages of poor households without accesses to safe water and sanitation, in Java and Outer
Islands, urban and rural areas, and separated by major income sources.

Figure 13 Indonesia: The Poor with Various Livelihoods in Association with
Environmental Health Indicators in Urban and Rural, 2002
Second, with regard to regional differentials in the strength of
relationship between poverty and IMR, Figure 13 (left side) shows
interesting findings. In urban areas, both in Java and Outer Islands, IMR
tended to be positively correlated with poverty among households
without access to safe water, whereas the relationship was negligible
among poor households without sanitation. On the contrary in rural
areas, both in Java and Outer Islands, IMR tended to be positively and
reasonably correlated with poverty among poor households without
access to sanitation, while the relationship was weaker among poor
households without access to safe water.

This finding seemed to indicate that lacking access to and provisioning
for safe water became a pressing issue in urban poverty, and poor access
to inadequate sanitation was a main problem in rural poverty. This
indication is however too simplified, provided that the combined
provisions of adequate sanitation and safe water supply are
indispensable for effective improvements in people welfare, rather than
only focusing on one intervention alone.
Indeed from different angle in data interpretation in Figure 13 (right
side), the incidence of urban poverty had associations with both poor
accesses to safe water and sanitation among poor households with main
income source from informal sector (IFS), though the association with
poor access to safe water being stronger than with poor sanitation. As
expected, the degree of relationships was significantly stronger among
urban poor IFS in Outer Islands than in Java, with coefficient of 0.64 for
poor access to safe water and 0.63 for poor sanitation as compared to
0.44 and 0.30 respectively, manifesting an overall situation of lagged
development in Outer Islands. Meanwhile in rural Java, those poor
households with agricultural and mining livelihood tended to have poor
sanitation with r at around 0.4, whereas access to safe water was not
statistically correlated with poverty. Interestingly, the relationship
between rural poverty and poor sanitation and lacking safe water were
more significant in Outer Islands, once again reflecting the overall
condition of lagged development.
Premature death and illness attributable to environmental factors have
been increasingly becoming a major contributor to total burden of
disease in developing countries like Indonesia. Hence, the provision of
safe water and improved sanitation becomes a greater challenge as
economic development and population growth place increasing
demands on limited water resources in Indonesia. Target in MDGs is to
halve the proportion of people unable to reach or afford safe drinking
water and improved sanitation, between 1990 and 2015. How this target
can be reached at the national level as a whole and at the regional level
in Indonesia certainly depends on the government commitment in
providing the access to these two basic infra structure and on the
affordability of the poor to get these accesses.
2.4.2. Best practices in poverty and environmental health links
Concerns and awareness over the environmental health condition of
surrounding settlement often come up from individual initiatives among
poor communities. When local diarrhea endemic in 1985 caused the
death of five children from poor families, a local community
leader―Mr. Agus Gunarto led a small group of his neighbors to initiate
an integrated community-based sewerage system (called as AG Tank) in
their neighborhood, Tlogomas, Malang, East Java. With a total

investment of 6 million rupiah in 1985, fully self-funded, this low-cost
waste disposal system has proven quite well in improving the overall
condition of environmental health in Kampung Tlogomas. The system
has changed people’s habit from the direct disposing of human feces
into the river of Brantas to the use of toilets in their houses. The waste is
disposed into the main sewerage that is planted under the paved road
along the kampung before it gravitates down into three waste collecting
ponds. Not only the changing waste disposal habit did occur in
Tlogomas, people’s livelihood also improves as households receive
additional income from room rental by students and workers as the
accommodation has indoor toilets. At the present time, the AG Tank has
been developed in other urban slum areas in Malang and other cities,
including Singosari, Pasuruan, Bangil, and Probolinggo (East Java),
Bandung (West Java) and Kendari (South East Sulawesi).
Efforts to improve the condition of settlement environment by
community are also found in urban slums living in the riverbank of Kali
Brantas in Surabaya. Different from the case of Tlogomas, the poor
people in Kampung Gunung Sari-Sawung Galing and Kampung Baru-
Ngagel Rejo illegally occupy the State’s land. Both poor urban
communities are constantly threatened for forced eviction. They
therefore initiate to improve the living condition of their settlement and
at the same time to conserve the riverbank, by widening and hardening
paved road, collecting households’ solid waste disposal to be regularly
picked up, and using toilets for disposing human feces instead of
directly disposing to the river (see Box 1).

Box 1 Between fears of forced eviction and initiative to improve living
conditions:
A story of “jogo kali” among illegal urban poor residents in the
riverbank in Surabaya (Results from the field work during FGDs)
These people called themselves as “jogo kali” (river guard). They live along
the riverbank of Kali Brantas in Surabaya. Two poor communities observed, one in
Kampung Baru -Ngagel Rejo and another in Kampung Gunung Sari - Sawung
Galing, have different settlement history, residential status and living condition, but
both illegally occupy the State’s land along the riverbank. Early settlement in
Kampung Baru began four years ago, as a site for poor migrants who were engaged in
such various marginal economic activities as pemulung (collectors of reused and
recycled materials for sale) and tukang becak (pedicab drivers) to gather at night. In
its development, Kampung Baru became a place of low-cost night entertainment,
including night clubs and prostitution. Early settlement in Kampung Gunung Sari
began in 1968 to accommodate poor people being evicted from their homes in slum
areas in city center during National Sport Competition (PON) VII venue.
All people in Kampung Baru do not have official ID (KTP), as they are not
recorded as residents in Kelurahan Ngagel Rejo. In contrast, people in Kampung
Gunung Sari mostly have KTP, and they pay land and building tax (PBB) every year,
although the land they occupy are not their property. Both communities however are
very aware that they anytime can be forcefully evicted from their present homes.
Given a constant fear of forced eviction, both communities attempt to show
a good intention by improving the living condition of their settlement and by
conserving the riverbank. In Kampung Baru, community initiatives to improve their
settlement include widening and hardening pave road, households’ solid waste
disposal being picked up, and the use of indoor toilet. All households in Kampung
Baru purchased water for drinking from Regional Water Company of PDAM, and
they used water from river or well for bathing and cloth washing.
Meanwhile, a more progressive effort has been pursued by community in
Kampung Gunung Sari. With self-funding and mutual help from all residents, they
built a hardened road with around 4 metres wide and 800 metres long in the site along
the riverbank where their houses ware previously located. As a consequence, their
houses were relocated to site next to newly built road. The idea of providing a road
and open space along the riverbank initially came from the advice of Minister of
Settlement during his visit in Kampung Gunung Sari in 2002. The Minister suggested
them to conserve the riverbank (road, open space, planting trees) in order to please
regional authority (Pemda) over their existence, thus Pemda will not evict them from
the present settlement.
In addition, community in Kampung Gunung Sari has also been changing
from their usual way of disposing human feces directly to the river to the use of
toilets inside the houses, with some using septic tanks (public and private MCK) and
some other still disposing into the river.
2.4.3. Conclusion and Recommendations
In the following we discuss several important focus areas where there
are links between poverty and environmental health:

Improving the environmental health of the poor by providing accesses
to safe water and sanitation Based on the data analysis, only around
one-thirds of the lowest income group in Indonesia had access to safe
water, and around a half of them had access to adequate sanitation. With
this low coverage of basic infrastructure, even categorized as one of the
lowest level in Asia, the poor are notably at risk to environmental-
related ill health. Therefore, ensuring accesses of the poor to safe water
and adequate sanitation is important to address the issue of
environmental-related ill health especially among the poor in urban
areas. Improving access of water and sanitation in urban area should be
integrated into a kind of kampung improvement program, which
includes the provisioning of access to housing, improvement in paved
roads and sewerage system. In addition, hygiene education for poor
households is also one of indispensable interventions for reducing and
mitigating environmental health risks due to poor accesses to safe water
and adequate sanitation.
Promoting multi-sectoral cooperation in the environmental health
agenda Although the health sector has an important role to play in
promoting the environmental health agenda, other sectors are often
responsible for the action needed to mitigate environmental risk factors.
Thus, we need more comprehensive and innovative cross-sectoral
cooperation between health and environment authorities, bilateral and
UN agencies, NGOs and public-private partnerships. The national
priority being given to poverty-related diseases has resulted in a
renewed focus on the need to improve the capacity of national health
systems. Environmental health efforts at country level also require
improvements in capacity both in the health sector and in other key
sectors. Environmental health management at this level requires sound
health information systems which can provide relevant environmental
health data, qualified staff, and capacity and skills within the health
sector that can be effectively used in cooperation with other key sectors,
both within the public administration and in the non-governmental and
private sectors.
Initiatives for pro-poor resource management The links between
resource management, health and poverty are varied and complex.
Effective interventions must therefore be based on thorough empirical
knowledge of a specific area. However, one fundamental insight serves
as a general starting point: poor people typically live in habitat where
they are more exposed to the adverse health effects of environmental
degradation and pollution than those who are better off, and they lack
the material, political and legal power and resources needed to prevent
and mitigate these effects. To reduce poverty and exposure to
environmental health risks, it is essential to expand and safeguard the
resource base available to poor people so that they can develop
sustainable livelihoods. Measures such as participatory management of

community resources, land ownership reform, and public investment in
land conservation, sanitation infrastructure, housing, health care, and
energy services will increase household and community capacity for
income earning and substantially reduce exposure to environmental
health risks. Higher priority should be given to support national and
regional water management plans and a focus on the reduction of water-
related health risks. This realization yields a new dimension to our
understanding of the complex links between sustainable development,
environment and health. Above all, it gives some indication of the gains
that may be possible in terms of better health and poverty reduction if
we are willing to invest in safer environments.
3. Concluding Remarks: Policy Implications
USummary of findingsU
Attempts have been made in the study to investigate the linkages between
poverty and environment in Indonesia context. From a framework on how
these linkages operate, there are four sets of environmental-related
determinants, namely access to and quality of natural resource base,
accesses to safe water and sanitation and air quality, accesses to information
on environmental resource and degradation, and exposure to ecological
conditions, by which all affect poverty incidence through its various
dimensions.TP
38
PT Dimensions of poverty here include livelihoods (i.e.
income/expenditure and inequality), environmental health risks (i.e.
infectious and parasitic diseases), and vulnerability. In brief, environmental
factors constantly intervene poverty incidence and efforts to reduce the
number of poor, which in turn influence the welfare of the entire
population―notably the poor and the most vulnerable groups.
However, given the lacks of readily available data on some key
environmental issues in the country, the analysis is restricted to focus on the
dimensions of livelihoods and environmental health to provide a brief
account of poverty-environment nexus in Indonesia. Major findings are as
follows. First, a substantial number of the poor relied on natural resource-
based economic activities for their livelihoods, including food and cash
crops, animal husbandry, forestry, and mining-quarrying. It suggests that
access to natural resource base and environmental condition are crucial for
the sustenance of the poor’s livelihoods as the degraded resources would
badly hurt them. Second, there was unequal land distribution among
agricultural land holders, with the poorest being unable to maintain the
productivity level of resource use even for subsistent livelihoods due to
TP
38
PT See Bucknall, Julia, Christiane Kraus, and Poonam Pillai (2001). “Poverty and Environment”.
Background Paper for the World Bank’s Environment Strategy. World Bank. Washington, D.C.

limited land holding. Third, evidence on poverty-forest nexus show that as
the resources are mostly held by the elites, the poor are then pushed into the
marginal land and tend to further exploit the limited resources held. This
will potentially aggravate the ecological conditions while at the same time
the resources held by the elites were not at all in a good condition.
Guaranteeing the resource rights for the poor, as legalized forestry users in
the State-owned or communal forests might be the best solution for
improving the poor’s livelihoods along with conserving the forest. Fourth,
with respect to poverty-coastal degradation link, it was found that the
incidence of coastal poverty was very much related to over-fishing, habitat
modification and pollution along the shorelines where the poor live. The
root causes of this condition were the usage of trawlers and fishing
equipments, as well as illegal catching by foreign ships. The continuous
cycle of over-exploitation and degraded coastal resource tend to decrease
the poor’s income which is further complicated as the poor have lack of
alternative income sources.
Finally, ample evidence on the relationship between poverty and
environmental health show that the coverage of safe water and adequate
sanitation among the poor in Indonesia was still low, indicating that the poor
are continually at risk to environmental-related ill health. Poverty incidence
also appeared to be related to IMR―as a sensitive health outcome indicator.
The poor understandably cannot afford to get access to basic maternal, pre-
and post-natal health services, bringing about death risk for their newly born
infants. In addition, not all poor are hopeless in dealing with the appalling
condition of their living environment. Innovative, low-cost and community-
based kampung improvement and waste disposal system, as well as
sanitation improvement management have been feasibly practicing in
various poor slum areas, notably in cities. It shows that the poor have
willingness, yet with limited capacity, to improve their daily living
conditions.
UThe importance of rights to the environment and natural resources - a
review on the existing legal aspects on poverty strategy and
environmentU
The above findings strongly suggest that guaranteeing the resource rights
and providing basic services for the poor call for the importance of
addressing poverty-environment issues using a right-based approach. This
approach provides a framework for addressing some contemporary and legal
issues. These include conflicting between rights and interests, supporting the
achievement of the Millennium Development Goals, preventing elite
monopolizing the resources which are believed as the root causes of
environmental degradation and fulfilling basic rights of the poor and the

marginalized. It will also correspond to pro-poor legal practice and it is
likely to produce better end result for sustainable development.39
In the national context, the final draft of Indonesia’s national poverty
reduction strategy paper (SNPK – Strategi Nasional Penanggulangan
Kemiskinan) employs a right-based approach to eradicate poverty in
Indonesia. It also clearly acknowledges the linkages between poverty and
environment as poverty is viewed as to be closely related to lack of access to
natural resources which is the main sources of livelihoods of the poor.
Decrease of the resources’ quality will hence hurt these poor. Furthermore,
SNPK defines poverty as the failure to fulfill basic needs that are necessary
for an individual to survive and live in dignity. Ten basic rights
acknowledged in the SNPK include right to adequate food, health,
education, decent work, housing and sanitation, clean water, land, natural
resources and environment, personal security and participation. Moreover,
law 23/1997 mentions that every citizen has a right to environment and
natural resources. The law further acknowledges three rights to the
environment include 1) right to healthy and good environment 2) rights to
information on the environment that relates to the role of managing the
environment 3) rights to participate in managing the environment.
The Draft Declaration of Principles on Human Rights and the
Environment further sets out a series of general principles of environmental
rights which include rights to a secure and healthy environment; rights to an
environment adequately to meet the needs of the present generation without
impairing the rights of future generation; rights to benefit equitably from the
conservation and sustainable use of natural resources for cultural,
ecological, educational, health, livelihood, and recreational spiritual or other
purposes; and rights to freedom from pollution, environmental degradation
and activities that adversely affect the environment and threaten life, health,
livelihood, well-being or sustainable development within, across or outside
national boundaries.40
The right-based approach also establishes the principles of claims and
corresponding to obligations as it lays the foundation of relationship
between individuals and groups with valid claims (rights-holders) and State
and non-state actors with correlative obligations (duty- bearers). States are
hence obliged to respect human rights by refraining from acts of
infringement. Their obligation to protect human rights requires the
government to regulate and control private actors. Finally, the obligation of
39
40
On 16 May 1994, an international group of experts on human rights and environmental protection
convened at the United Nations in Geneva and drafted the first-ever declaration of principles on human
rights and the environment.

governments to fulfill human rights involves taking positive measures to
bring about the realization of such rights.41
However, in order to achieve all the above mentioned objectives, a thorough
work should be engaged in establishing the conceptual and operational
standards of the rights to environment and natural resources. Defining such
standards is hence imperative not only to set the expected targets but also to
establish a series of measurable indicators that enable to carry out systematic
monitoring and evaluation. A simple analysis that can be conducted in order
to establish standards of the rights to environment and natural resources is
sustainable livelihood analysis. It offers one way to prioritize constraints on
people’s livelihoods, suggesting which kinds of rights are the most
important one for a particular group at a particular time, or the sequence in
which rights should be approached for a given group.
Implications for environmental management in the context of regional
autonomy
Environmental management in Indonesia is further complicated by a rapid
decentralization process embarked in 1999, by which much of the
responsibilities for public services were devolved to local level. Lack of
clarity is in part due to weaknesses in the decentralizations law itself, such
as the forestry law largely ignores the decentralization Law 22/1999.
Issuance of the Law 32/2004 that aims to amend the Law 22/1999 has
indeed resulted in clarity on distribution of the authorities between the
central government and provincial as well as the kabupaten/kota government
in the financial, general service and utilization of the natural resources. With
regards to natural resources, the Law further details the relationship between
central government and the regional administration as well as inter-regional
governments in the utilization of natural resources and management of sea
territory and natural resources beneath the seabed.
As Indonesia economy remains natural resources based, authorities
devolved to the regions in managing the natural resources sectors – forestry,
mining and fisheries – creates potent mix of uncertain control of resources
use which may lead to environmental degradation. Under the
decentralization scenario, newly empowered local authorities would embark
in more intensive local resource use to boost local income and revenues
without adequate environmental safeguards. The right-based approach will
therefore impose duty on every autonomous region to safeguard the
environment or natural resources.
41

Annex 1. Technical Notes on Quantitative Data Analysis
This section is to provide technical notes, as a complimentary document for the main
report on “Poverty–Environment Nexus in Indonesia: With a Special Reference to
Livelihood and Environmental Health Dimensions Using a Right-based
Approach”. It contains a brief account of data sources employed in the analysis,
limitation on the scope of the study, strengths and weaknesses of indicators, as well
as definition of statistical terms. In addition, the section provides a simple
explanation on statistical exercises used in the main body of the analysis in the study
report.
1. Note on Statistics
Data sources and limitation
The indicators presented in this report are based on the best use of readily available
data from a wide range of sources. For quantitative analysis, the data used are
mainly computed from the raw data of National Socio-economic Survey (Susenas)
2002 and 2003, and Village Potential Census (Podes) 2003. Other data sources are
also used, including from Indonesia National Human Development Report (NHDR),
2004.
Since the data used mainly from Susenas and Podes, it is worth noting to explain the
nature of information gathering process in both data sources. First, Susenas data
tends to be under-representative among respondents categorized as middle and upper
income classes. Tendency of sample replacement from middle/high income to low
income household during the survey is fairly significant, yet it has not been proven
in a specific study. This is partly due to operational difficulties faced by field
workers in re-interviewing the selected respondents and low remuneration rates.
Second, Podes data are gathered based on information from village officer as a
resource person. Since there are a series of information in Podes that require
quantitative number or calculations, the figures obtained often capture a rough
estimation, and they tend to be subjective of resource person’s knowledge and
perception. It is most likely that different resource persons asked for the same
information will provide different estimation for particular statistics and indicators.
For further analysis, a great caution on data interpretation from both sources should
always be borne in mind.
Note on Indicators
Given the data limitation, several particular indicators have been introduced as
proxies for the intended indicators. For example, analysis on the linkage between
poverty and environmental health usually uses data on DALY (disability-adjusted
life years). DALY is to measure burden of diseases experienced by population as an
impact indicator of health intervention programs on the improvement of the overall
health condition of the population. Since data on DALY is not available in
Indonesia, data on Infant Mortality Rate (IMR) are used as a proxy. IMR has been

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