Preparing for the next crisis : establishing a vulnerability and shock monitoring and response system in Indonesia

 70638 Preparing for the Next Crisis: Establishing a Vulnerability and Shock Monitoring and Response System in Indonesia Poverty Team World Bank Office Jakarta Jakarta, Indonesia October 2010 This report was prepared by the Poverty Group from the Poverty Reduction and Economic Management team in the World Bank Office Jakarta. The World Bank CMRS team was led by Ririn Purnamasari and Matthew Wai-Poi, with Michael Colledge as lead analyst with support from Taufik Hidayat and project management by Luc Spyckerelle, and overseen by the Poverty Group Task Team Leader Vivi Alatas. The team worked closely with members of the National Development Planning Agency (Bappenas) and the Central Bureau of Statistics (BPS). The project was financed by the Australian Government Overseas Aid Program (AusAID). All queries should be directed to valatas@worldbank.org. Table of Contents Table of Contents ........................................................................................................................ i Abbreviations, Acronyms and Terminology............................................................................ iii Executive Summary .................................................................................................................. iv 1. Introduction ...................................................................................................................... 1 1.1 Background and Rationale ...................................................................................... 1 1.2 Purpose and Structure of the Report ....................................................................... 2 2. Vulnerability and Shock Monitoring Experience in Indonesia ........................................ 4 2.1 Vulnerabilities, Shocks and Crises ......................................................................... 4 2.2 Monitoring in the 1997 Asian Financial Crisis....................................................... 5 2.2.1 100 Village Survey ..................................................................................... 6 2.2.2 Kecamatan Crisis Impact Survey ............................................................... 7 2.2.3 Nutrition and Health Surveillance System .................................................. 7 2.3 The Crisis Monitoring and Response System ......................................................... 9 2.3.1 General ........................................................................................................ 9 2.3.2 Implementation of the CMRS ..................................................................... 9 2.3.3 Strengths, Weaknesses and Challenges of the CMRS .............................. 10 3. Expectations and Overall Design of a Vulnerability and Shock Monitoring and Response System ............................................................................................................ 12 3.1 Intended Scope of a Vulnerability and Shock Monitoring and Response System12 3.2 Characteristics of an Effective Vulnerability and Shock Monitoring and Response System .................................................................................................................. 13 3.2.1 Phases of a Crisis ...................................................................................... 13 3.2.2 Monitoring ................................................................................................ 15 3.2.3 Response ................................................................................................... 17 3.3 A Conceptual Framework .................................................................................... 18 3.3.1 Data Demand and Data Collection............................................................ 19 3.3.2 Data Analysis ............................................................................................ 21 3.3.3 Availability of Information ....................................................................... 21 3.3.4 Information Use ....................................................................................... 22 3.3.5 Coordination and Collaboration ............................................................... 23 3.3.6 Capacity Building for System Implementation ......................................... 24 4. Data Demand and Data Collection ................................................................................. 26 4.1 Data Demand and Data Collection in the CMRSS ............................................... 26 4.1.1 Choice of Crisis Impact Indicators and Data Collection Approach .......... 26 4.1.2 Household Data ......................................................................................... 27 Planning for the Next Crisis: Establishing a Vulnerability and Shock Monitoring and Response System Table of Contents ii 4.1.3 Health Data ............................................................................................... 27 4.2 Sakernas Data ....................................................................................................... 28 4.3 Susenas Data ......................................................................................................... 30 4.4 Other Data ............................................................................................................. 33 5. Data Analysis and Availability of Information .............................................................. 34 5.1 Data Analysis in the CMRS .................................................................................. 34 5.1.1 Analytical Framework............................................................................... 34 5.1.2 Levels of Analysis ..................................................................................... 35 5.2 Data Analysis in the VSMRS ............................................................................... 36 5.3 Availability of Information ................................................................................... 37 6. Information Use .............................................................................................................. 39 6.1 Use of the CMRS Survey Results ......................................................................... 39 6.2 Information Use in the VSMRS ........................................................................... 39 7. Institutionalization of Vulnerability and Shock Monitoring and Response ................... 41 7.1 The Process towards Institutionalization .............................................................. 41 7.2 Housing the VSMRS ............................................................................................ 41 7.2.1 Three Basic Approaches to Address Fragmentation ................................. 41 7.2.2 A Possible Setup for the VSMRS ............................................................. 43 7.3 Key Institutionalization Issues .............................................................................. 45 7.3.1 Institutional Design of the VSMRS .......................................................... 45 7.3.2 Determining Personnel Needs and Assignment of Staff ........................... 45 7.3.3 Securing Funding for Continued Development and Support .................... 45 8. Proposed Workplan ........................................................................................................ 47 8.1 General .................................................................................................................. 47 8.2 Description of Proposed Activities and Outputs .................................................. 51 8.2.1 Data Demand and Data Collection............................................................ 51 8.2.2 Data Analysis ............................................................................................ 53 8.2.3 Dissemination of vulnerability and shock information ............................. 55 8.2.4 Information Use ........................................................................................ 56 8.2.5 Institutional Setup ..................................................................................... 57 9. Bibliography ................................................................................................................... 59 Planning for the Next Crisis: Establishing a Vulnerability and Shock Monitoring and Response System Abbreviations, Acronyms and Terminology At risk As applied to a district, as evidenced by an adverse movement in an indicator due to the effects of a crisis, caused by, for example, a global financial crisis or a tsunami. Bappenas Badan Perencanaan Pembangunan Nasional, National Development Planning Agency BPS Badan Pusat Statistik, the Central Bureau of Statistics of Indonesia CB Census Block CMRS Crisis Monitoring and Response System CMRSS Crisis Monitoring and Response System Survey Crisis Effect of shock or more gradually deteriorating situation. Can be caused by a natural event such as disease or earthquake, or be human- related, for example, financial or political turmoil, or conflict. It can develop suddenly, following a shock, or over a longer period as conditions gradually worsen, for example, as result of a prolonged drought. District The term used to refer to administrative units below provinces. It thus covers both rural districts (kabupaten) as well as municipalities (kota). HH Household In-crisis A district in-crisis is defined as one adversely affected by the Global Economic Crisis or other crisis, as determined by adverse changes in a number of indicators. NSS Nutrition and Health Surveillance System PRS Poverty Reduction Strategy Puskesmas Pusat Kesehatan Masyarakat, Community Health Center Sakernas Survei Angkatan Kerja Nasional, National Labor Force Survey Shock Sudden, unanticipated event, such as current financial crisis or tsunami, that is not considered a part of a business trend or cycle, or seasonal, trading day or random effect. Susenas Survei Sosial Ekonomi Nasional, National Socio-Economic Survey TKPK Tim Koordinasi Penanggulangan Kemiskinan, Coordination Team for Poverty Reduction TNP2K Tim Nasional Percepatan Penanggulangan Kemiskinan, National Team for Accelerating Poverty Alleviation VSMRS Vulnerability and Shock Monitoring and Response System Planning for the Next Crisis: Establishing a Vulnerability and Shock Monitoring and Response System  Executive Summary Economic and natural crises and shocks are unfortunately recurring events, but the better a country is prepared for such eventualities, the lesser the impact may be. Sometimes there are advance signs of a crisis, but crises can also develop rapidly, with little or no warning. Whatever the nature of the event, if it can be identified quickly, the sooner the government can respond through initiating alleviation measures targeted at affected or at-risk groups or regions. Such early response measures – together with other social safety measures – can help to shield vulnerable groups from the worst effects of a shock, and establish a basis for quicker recovery. In 2009, in the wake of the global economic crisis, the Government of Indonesia piloted a Crisis Monitoring and Response System (CMRS). More than 14,000 households in 471 districts1 were visited three times by National Statistics Agency (BPS) staff at three month intervals. The visited households were asked about the employment situation of the head of household, if and how the crisis affected the household and in what ways, and what coping strategies – if any – they used to meet the challenges they faced. The data was then analyzed for national, provincial and district levels to determine what the impacts of the crisis were, and to consider whether crisis response measures were required, what they should be and where they could most effectively be deployed. The CMRS experience provides valuable inputs for the design of a long-term Vulnerability and Shock Monitoring and Response System (VSMRS). The CMRS covered the whole country, which meant that there was no need for a priori guesses on where crisis impacts might be worst. The CMRS survey was conducted as an add-on to the BPS’ Sakernas survey, and this gave good assurance of the quality of the data and made data collection logistically easier. An important difference between the VSMRS and the CMRS is that the VSMRS will also need to operate under non-crisis conditions, but this may well be done with a less intensive mode of operation. When there is no known shock or apparent crisis, the VSMRS operates in basically a stand-by mode; a minimum set of data are being collected and analyzed, but as there are no signals that warrant a government intervention to address worsening conditions, the level of effort put into this activity can be relatively small. If however there are signs that the country as a whole, or parts of it, are affected by a crisis, more efforts and resources can quickly be put into the monitoring in order to obtain better and more actionable information on what measures would be required to avert or mitigate the impact of such a crisis, especially for the regions or population groups that are most at risk. The Sakernas and Susenas data are proposed as the core data for the VSMRS. The Sakernas and Susenas surveys of BPS are well established surveys, and are recognized as being among the most reliable data, if not the most reliable data on socio-economic and labor conditions of Indonesian households that are available with high periodicity. That periodicity will become even better since, starting from 2011, both surveys will be conducted quarterly 1 The term “district