Background

It has long been recognized that the more isolated parts of countries fail to develop economically because they are left out of the mainstream development agenda. The designers of KPEL (formally PARUL) postulated that this situation could be rectified with prudent investment if human motivation and the dynamics of trade could be harnessed by potential beneficiaries. The idea was to identify local (urban) and international market opportunities, and then link rural producers to those opportunities through improved rural-urban infrastructure linkages. The aim was to mobilize and link producer associations with buyers and traders through participatory planning and management processes that demonstrated a "win-win" scenario through improved trade relations, supported by local government infrastructural investments. The project's objectives, therefore, focused on preparing Indonesian institutions at the local/regional-levels to form local partnerships based on marketable economic clusters, supported by national-level partnerships to connect them to national and international markets.

Activities
The Project designed, tested and institutionalized a 13-step approach to identify viable economic clusters and build multi-level partnerships between key Indonesian institutions at local/regional and national levels. A total of 51 Districts were supported in a wide variety of economic clusters such as copra, fishing, shrimps, cashews, handicrafts, emping and coffee. These partnerships comprise representatives of local governments, the business community, and civil society, linked to a network of small-scale producer groups at the sub-district and community-levels.

Results
The project successfully developed and tested the concept into a set of working arrangements, procedures, and techniques which were documented into a Local Economic Development Handbook and widely disseminated through the project web site. 50 local-level and nine provincial-level multi-stakeholder, multi-sectoral partnership forums were established as platforms for participatory decision-making and citizen input into District-level economic planning and monitoring. The provincial level partnerships coordinated between districts and cities, facilitating cooperation rather than inter-regional competition. 30 new producer associations were established, which enabled producers to negotiate for better prices, resources, market conditions and skills development. By organizing themselves, producers were also able to lobby government and other private sector stakeholders around their priority concerns. Participating government officials changed their business approach by (i) recognizing the importance of markets and market demand (ii) providing opportunities for public-private dialogue (iii) recognizing the value added by citizen input into economic planning (iv) understanding the government's role as facilitator, not implementer, of economic development. A series of cluster development plans were facilitated and implemented resulting in increased economic activity and benefits to producers. Efficiency was improved, markets expanded, incomes increased, jobs were created and networks and linkages between actors in the production chain improved.