1. The National Dialogue on Water in Indonesia
The National Dialogue on Water in Indonesia focused on two pillars: 1) financing water infrastructure; and 2) non-structural measures for flood disaster risk prevention. Stakeholders from inside and outside Indonesia’s water sector participated in the Dialogue, representing all levels of government, state-owned enterprises, private sector, and development partners. This chapter also provides a readers’ guide for the rest of the report.
This document reports on the National Dialogue on Water in the Republic of Indonesia (hereafter: Indonesia), which took place between June 2022 and March 2023. The Dialogue aimed to support actions to address Indonesia’s water sector challenges by identifying:
Policy priorities, including priority areas for water-related investment,
Options to address financing needs and enhance financing capacities, and
Technologies and innovation in line with policy priorities, financing strategies and capacities.
The Dialogue was led by the Ministry of National Development Planning (BAPPENAS) and the Ministry of Public Works and Public Housing (PUPR). It has been facilitated by teams of experts from Asia Water Council (AWC) and the Organisation of Economic Co-operation and Development (OECD), who prepared this report. The report is a result of a literature review, a questionnaire filled out by various government institutions, workshops, stakeholder interviews and focus group discussions. The strong engagement with stakeholders from across the country made the National Dialogue on Water a true dialogue.
Water policies around the world are in urgent need of reform and water challenges cannot be resolved all at once. This is also the case in Indonesia, with a range of policy and institutional challenges (Chapter 2). The Dialogue therefore centred around two priority areas, which were defined by BAPPENAS and PUPR, in consultation with their stakeholders:
Pillar 1: Financing water infrastructure. Stakeholders showed a strong interest in developing a robust financing and funding mix for water, consisting of existing financing strategies and additional sources for capital, operation and maintenance. A robust financing mix has the potential to attract private finance. There is an opportunity to make better use of existing finance, such tariffs for drinking water supply services and water abstraction and pollution charges (Chapter 3). Land value capture can be an innovative source of funding water infrastructure that inherently increases the value of land, such as green and grey infrastructure for flood risk reduction or improved water supply (Chapter 4).
Pillar 2: Non-structural measures for disaster risk prevention. Flood disasters have been one of the most serious catastrophes in the last two decades in Indonesia. Stakeholders showed a strong interest in non-structural measures to mitigate flood risk, such as water-related disaster forecasting and early warning systems by using satellite information. To support disaster risk management, Indonesia aims to strengthen its water resources information systems (Republic of Indonesia, 2020[1]). Chapter 5 discusses policy pathways to implement integrated flood information systems and early warning services.
To keep the momentum of the National Dialogue on Water, particularly in light of the development of the National Medium-Term Development Plan, the National Long‐Term Development Plan, and the forthcoming Presidential Decree on Land Value Capture, a tentative action plan that emerged from the Dialogue is presented in Chapter 6.