By Kathryn McConnell | Staff Writer | 10 February 2012
Washington — The U.S. Millennium Challenge Corporation (MCC) and the government of Indonesia are putting in place a structure to implement the five-year, $600 million compact signed in November 2011.
The compact, one of MCC’s largest, will focus on three projects to expand economic growth. The Green Prosperity Project will expand renewable energy and improve natural resources management in 12 provinces. It supports Indonesia’s commitment to reducing greenhouse gas emissions, and will empower local people to manage their own resources more effectively, said Martha Bowen, MCC program officer. The project can be a catalyst for more private sector investment in low-carbon growth strategies, spur local entrepreneurship through new opportunities in renewable energy and innovative land use practices “and build greater capacity and commitment among government, civil society and the private sector to the principles of sustainable development,” she said.
The second part of the agreement will focus on preventing low birth-weight, childhood stunting and malnourishment in six provinces. Currently, more than one-third of Indonesia’s children are stunted, Bowen said. Stunting leaves children prone to experiencing chronic disease, delayed cognitive development, delayed enrollment in school, low academic achievement and reduced earnings potential. This is the first project in Indonesia that will provide incentives to the health system to meet community demands for better tools to prevent stunting, she said.
The third part provides assistance to Indonesia's government to achieve savings in procurements and improve public services delivery. The project will focus on building a professional procurement workforce and institutionalizing procurement practices.
The compact’s implementing structure will be called the Millennium Challenge Account and take form as a trust under Indonesian law. It will be responsible to the government of Indonesia.
In keeping with MCC’s commitment to country ownership, the compact’s programs were designed and will be implemented by the people of Indonesia, Bowen said. Each of the three projects builds on the government’s priorities for reforms related to improving land use practices, slowing environmental degradation and strengthening social service delivery.
The compact, or agreement, “is a partnership model, not donor implemented like others that the government of Indonesia is used to,” Bowen said. While MCC has guidelines and certain requirements for implementation, the implementing body will be responsible to Indonesia’s government, she added.
“Our Indonesian colleagues like to say that they haven’t always loved the work that they’ve had to do to prepare for this investment but they are very glad they have had to do it,” Bowen said. “They often tell us they feel a genuine sense of ownership over this program.” Indonesia steering committee working with MCC includes members from business, nonprofits, academia and government, she said.
Previously, Indonesia was part of MCC’s “threshold” program while it worked to achieve eligibility for a longer-term compact agreement. The $55 million threshold program sought to reduce corruption by bolstering several key anti-corruption bodies.
Indonesia was named eligible for MCC compact assistance in December 2008.