This document summarizes key lessons from Indonesia's decentralization efforts and policies to reduce poverty at regional and local levels. It discusses decentralizing authority to local governments, challenges in implementation including capacity issues, and implications for regional planning and budgeting. It also outlines a policy framework and key actions needed, including developing credible strategies and plans, improving governance, enhancing capacity, and linking national strategies to regional budgets.

1. Presentation Version DECENTRALIZATION AND POVERTY REDUCTION: from Lessons Learnt to Policy Action The Case of Indonesia Bambang Bintoro Soedjito A Workshop jointly organized by the OECD Development Centre and the Development Cooperation Directorate OECD Headquarters, Paris: September 29-30, 2004

6. “ Big Bang” Decentralization: Changing the Map

7. Population below the National Poverty Line, % and absolute numbers 37.3 m 38.4 m 48.0 m 34.2 m 27.1 m 25.5 m 22.2 m 11.3% 13.7% 15.1% MDG target 7.5% 17.4% 18.2% 23.4% 17.6% 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 1990 1993 1996 1999 2002 2005 2008 2011 2014 Source: Susenas % Millions poor population, using 1998 criteria Millions poor population, using pre-1998 criteria Percentage, using pre-1998 criteria Percentage, using 1998 criteria Millions 0 20 60 40 80

9. Increasing Incomes Reducing Expenses Creating Opportunity Community Empowerment Capacity Building Social Protection Planning, Programming and Budgeting Mechanism Banking & non-banking financial institutions; private sector; community Four Pillars of Poverty Reduction Strategy The Basic Building Blocks of Poverty Reduction Strategy

14. Thank You