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Affordable housing for underserved communities in Indonesia

Indonesia, 26 January - 6 February 2015

The world’s fourth largest country and home to over 250 million people, Indonesia, is facing a housing crisis of epic proportions. Rapid urbanisation and poor urban planning and policy-making has resulted in a shortage of 15 million affordable houses for the 91 per cent of Indonesians who are classified as low-income. Successive governments have tried many fixes including building high-rise towers and subsidizing mortgages for the poor but the backlog continues to grow by approximately 600,000 units every year.

During the third annual BASF Sustainability Drives Future Business Programme facilitated by GIFT, 25 global managers from 14 countries in Asia, Europe and the Americas first convened in Hong Kong for dynamic classroom sessions where they explored issues including the impacts of globalisation, the reshaping of capitalism and the role of business in society. During the experiential component of the programme participants travelled to Greater Jakarta to work on a field project connected to the provision of affordable housing.

In Indonesia the group took part in site visits hosted by BASF’s supporting partner and one of the country’s leading property developers, Ciputra. They met with stakeholders including urban planners, mortgage lenders and representatives from the Ministry of Housing and Real Estate Developers Association, as well as NGOs involved in the provision of low-income housing and residents themselves.

Over the course of the programme participants produced recommendations for the establishment of a new low-income social investment fund dedicated to funding land acquisition, mortgages for the unbanked and SMEs involved in the design and manufacture of affordable housing construction materials. They also proposed a new quasi-governmental agency to act as an affordable housing authority and essentially be the operational arm of the fund. These recommendations were presented to an audience which included Management of BASF Indonesia, Ciputra, DBS Bank and the Vice Chair of the Real Estate Developers Association.

 

basf.com

 
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Indonesia is a vast country of more than 17,000 islands and home to over 250 million people. Its geography and disparately located population present significant challenges to the government as it seeks to ensure that all citizens enjoy the benefits of economic growth rates that are the envy of most western nations. Not least of these is the provision of reliable and affordable electricity. In efforts to meet this challenge, and to reduce its dependence on fossil fuels, the government is committed to increasing the share of renewable energy to 25 per cent of primary energy supply by 2025. As of 2010 renewable energy, including hydropower still made up only 6.9 per cent of the nation’s energy mix.

Over 70 million Indonesians (more than the population of the United Kingdom) do not have access to a consistent electricity supply. Current energy business models rarely result in investments in rural small-scale renewable energy production because of high perceived risk and the difficulty of identifying and developing new projects.

To overcome these challenges participants on GIFT’s 33rd Global Leaders Programme developed a new business model which reduces risk through co-ownership with communities and leverages award-winning NGO IBEKA’s healthy pipeline of projects around the country – the new company, NusaTerang, also takes a groundbreaking approach to factoring in the true cost of valuable natural resources by paying for their eco-system services.

 

ibeka.netsains.net

 

 
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Integrated community development plan for NIKP Sangatta

East Kalimantan, Indonesia 8 March – 20 April 2010

GIFT launched the inaugural Integrated Leadership Programme (ILP) in partnership with IMC Group in Singapore and East West Learning Enterprises. Based on the YLP methodology, this programme brought 25 managers from around the company’s various business units to perform a needs assessment and propose an Integrated Community Development Plan for one of the investments within IMC Plantations in East Kalimantan, Indonesia. Participants had the rare opportunity to tackle real-world socio-economic development issues within the complex environment of an oil palm plantation and put the company philosophy of Active Citizenship into practice. This programme is an example of the great potential to use the dynamism and experience of internal resources to provide a fresh perspective on challenges and opportunities facing the company and achieve a robust executive learning experience in the process.

As the project is internal to IMC, the briefing note and business plan are not available to the public. However, please watch the video to have a brief experience of the ILP.

 


                        
www.imcgroup.info  

 
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In Dec 2009, GIFT participants collaborated with the Aceh Partnership for Economic Development (APED) to write a plan for a new model cocoa processing and trading company which would improve livelihoods for smallholder farmers and promote economic recovery after the tsunami of 2004.  APED was a partnership between the UNDP and the local government in Aceh and had also done work in the coffee and rubber sectors. Due to a lack of education in proper cultivation and harvesting techniques as well as a lack of access to market data, cocoa farmers were regularly underpaid for their crops by collectors. They also produced yields far below their potential in both quantity and quality and had no standardized processing techniques which were necessary for them to move up in the value chain for cocoa products. As a result Aceh lagged far behind other Indonesian provinces in the production of this important cash crop.

Participants proposed a new model for cocoa farmers to increase their income through a standardized system of collection and processing and a company structure which aligned the interests of all local stakeholders involved. For a visual overview of the field visit please see the photo story and for a comprehensive review of the site visit please see the round up.

 

     www.undp.org