Third Kecamatan Development Project

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The Third Kecamatan Development Project (KDP-3) for Indonesia aims to reduce poverty and improving local-level governance in rural Indonesia. It is part of a long-term village level governance program that began with the first Kecamatan Project in 1998. Specific development objectives for KDP-3 include: (i) institutionalizing participatory processes in local government; (ii) the cost effective provision o f basic social and economic infrastructure; and (iii) strengthening the capacity of the micro-finance institutions developed under KDP- 1 and KDP-2 to manage and monitor funds sustainably. There are 6 project components. Component 1 consists o f block grants that are transferred directly from the Special Account to the subdistricts that are participating in KDP. Block grants take two forms. One block grant supports investment proposals made by villages and selected by consensus in an inter-village decision meeting. The second consists o f block grants to support the participatory planning process. Each i s described below. Component 2 consists o f activities to strengthen the local government councils formed under Laws 22 and 25, with a particular focus on the village representative forum (BPD), inter-village forums (FAD), and the district parliaments. Most o f the component finances social and technical facilitators. Facilitators are recruited from the private sector. They receive a project-managed training program as well as periodic refresher courses. Other activities include: technical assistance for BPD capacity development; training in administration and monitoring skills to reinforce village administration, and village-level civic information and education programs about decentralization. Component 3 gives support to micro-finance institutions. Project support will be limited to training, technical assistance, Additional activities funded through this component include training courses in legislative drafting, and support to PMD for carrying out overall project evaluations through the provision o f technical assistance. Major activities to be funded through Component 5 are a program o f poverty impact assessments using quantitative and qualitative methods, continued support to the justice for the poor program started under KDP-2, pilot programs for community based monitoring, and studies on village and subdistrict revenue generation, trade, and infrastructure. Component 6 funds operational costs.