Ha Giang off the Beaten Path

Day 3 of Ha Giang Province – February 6, 2016

Quyet Tiet market in Ton Ba district is an ethnic minorities market off the beaten path — not quite as popular nor colorful as Cao Bac’s Flower Hmong market. I went the week preceding Vietnam’s lunar new year, what they call Tet, and the famous peach blossoms were in full bloom in this mountainous region of the country.

My motorbike driver, Son, was quiet, and spoke bits and pieces of English, which he picked up from tourists only. In the off season he is a rice farmer.

We exchange yes-no’s throughout the day, but his quiet demeanor, the beauty of the mountains, make it the perfect day.

One of the highlights of our conversations is about whether or not to go fishing, which is a kind of free “add-on” to the trip. There is no cost involved as the driver has only time on his hands, fishing poles are borrowed from the villagers as part of the day visit, worms are free, maybe, I think because staying in one spot does not require additional petrol.

“Do you like fishing?”

“I don’t know. I never tried.”

“We go fishing in the lake this afternoon.”

Afternoon arrives. “Do you still want to go fishing? I need to look for worms.”

“Do YOU like fishing?”


“Why do you want to go fishing?”

“Because you want to go fishing.”

Another highlight of the visit was a forest fire along the side of the road. Two ethnic minority girls with babies strapped on their backs were putting it out, without concern for smoke inhalation of their infants. Similar views that would shock Westerners, who have a very high standard for health and hygiene, peppered the day’s sights.

In the market, a girl eating lunch with her mother next to a pig carcass. Outdoor barber shops. Rice wine infused with unidentified forest herbs stored in a reused water bottle. However, when it is 40 degrees drinking rice wine seems the perfect ailment to the cold weather. When you are the only person walking around with a camera, the locals amused and friendly, and unlike the Hmong and Zao of Sapa, shy away from pushing souvenirs on you. They just smile, and smile with an expression of amusement that I take to mean something like “Why you would come to a market to photograph me instead of buy things. Silly tourist.”

We visit a Red Zao village, take a hike around the village, which is dotted with 30 foot high hay stacks and traditional clay houses.

The rice wine combined with the hike has made me sleepy, and we finally decide not to go fishing. But the spontaneity of being able to go fishing — that was fun.

If I had had more time, I would take the motorbike village run by Mr. Quang in Tay village and take the 2-3 days to go north to Dong Van, the ancient palatial grounds of the Hmong empire in the French imperial era, home to the National Geopark, one of the largest geological passes in the world,  and gateway to China from northern Vietnam. However, for me, with three days in Ha Giang, there were already so many beautiful landscapes in central Ha Giang – I can see the sites in warmer weather.

Perhaps I will come back another time during the month of September when the weather is nicer.

For more information about Ha Giang, I recommend speaking to Dong, the owner of Bong Café in Ha Giang City. Truong Xuan Resort is the best place to stay, whose English-speaking receptionists can help to arrange a similar motorbike tour to Quyet Tiet market and local Zao village.

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Green Prosperity in Indonesia

Yesterday, I went to the first round table talk about the Indonesian MCC Compact. Pak Dino, the Ambassador to the United States, spoke about how this is the first true partnership between the US and Indonesia. Rather than focusing on single issues such as human rights or democracy & governance, the MCC compact truly addresses the priorities of the Indonesian government. In this case they are: procurement capacity building, stunting prevention and sustainable agriculture (Green Prosperity Project). The Green Prosperity project is a great example of the direction in which economic growth projects should head in developing countries that are stripping their natural resources in the race for growth. I remember from my visit to a small village outside of Jogja just how demanding the environmental concerns are.

Indonesia’s Green Prosperity

Nigel Purvis, Nonresident Senior Fellow , Global Economy and Development

Michael Wolosin, Director of Research and Policy at Climate Advisers and Visiting

NOVEMBER 21, 2011 —

On November 19, 2011, in Bali, Indonesia, Secretary of State Hillary Clinton signed a new partnership agreement with the Government of Indonesia providing more than $600 million of U.S. aid through the Millennium Challenge Corporation (MCC). More than half of these investments are dedicated to “green prosperity”—the sound idea that sustainable natural resource management and clean energy technologies accelerate economic growth and poverty alleviation.


Save to My PortfolioDouble Jeopardy: What the Climate Crisis Means for the Poor

Vinca LaFleur, Nigel Purvis and Abigail Jones
The Brookings Institution
February 2009

Save to My PortfolioHumanitarian Silos: Climate Change-Induced Displacement

Elizabeth Ferris
Population-Environment Research Network
November 2011

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What does this mean in practical terms? New U.S. funds will help Indonesia make wiser land-use decisions by, for example, guiding future palm oil plantations away from pristine rainforests and toward abandoned, degraded lands, which are abundant. These “land swaps” hold enormous potential. While palm oil plantations on degraded lands require higher up-front investments (and are therefore uncommon without government intervention), over time plantations on degraded lands are usually more productive and profitable than palm plantations grown in newly deforested and drained peat lands.The United States can provide affordable bridge loans and long-term financing, and technical assistance to help local communities map surrounding lands, clarify land-rights and develop community-supported strategies. In so doing the United States can help Indonesia increase economic growth, strengthen its democracy, reduce illegally logging, respect the rights of forest-dependent communities, conserve threatened tropical forests and orangutans, and reduce a major source of climate pollution.

Investments in renewable energy—such as modest sized hydropower projects and geothermal power plants—are also contemplated in the new green prosperity program and can also provide important benefits. Affordable, clean electricity in rural communities spurs business development and lays the foundation for long-term growth by enabling school children to study in the evenings.

The green prosperity program represents an important milestone in Indonesia’s own development and a step forward in modernizing U.S. foreign aid programs.

Nowhere is green growth a more pressing need than Indonesia. Natural resources are a major part of the Indonesian economy, but Indonesia’s runaway deforestation and wetland destruction, driven by illegal logging and unchecked expansion of oil palm and pulpwood plantations, threaten Indonesia’s social stability, national security, environment, health, and future economic growth.

For a long time Indonesia’s forest economy has been notoriously inefficient and corrupt, with profiteering and resource exploitation often trampling the rights of the rural poor. Pulp, paper, timber, and oil palm companies and powerful syndicates have routinely seized the ancestral lands of local communities [1]. The resulting dislocation, economic and upheaval exacerbate social tensions by further marginalizing the struggling rural majority.

Across Indonesia overbuilt pulp and paper mill capacity is driving illegal logging, causing the disappearance of old-growth native forests and costing the government nearly $2 billion in lost tax revenue annually [2]. Rapidly expanding palm oil plantations also are taking the place of healthy forests and wetlands. Deforestation in Indonesia is so prevalent that at current rates of destruction, old-growth native forests could disappear within 30 years [3] with devastating consequences for the poor, wildlife and the world’s climate [4]. Indonesia is the third-largest greenhouse gas emitter, behind only China and the United States [5], and destructive land-use practices account for 85 percent of Indonesia’s emissions, while the resulting oil palm and forest products sectors contribute less than 8 percent to its GDP [6]. Fires caused by the draining of peat-land soils are not only an exceptionally large source of emissions, but also result in economic losses estimated at $4 billion annually, causing major health problems in local populations through smoke inhalation [7] .

In this context, Indonesia’s decision to focus the bulk of new U.S. foreign aid resources on sustainable land-use and clean energy is a cause for hope. Indonesia deserves credit for prioritizing not just growth, but green growth in its partnership with the United States.

The investments announced by Secretary Clinton are also in America’s vital national interest. Indonesia’s strategic importance to the United States is difficult to overstate. As the world’s most populous Muslim nation, its third largest democracy, and an example of religious tolerance in Southeast Asia, Indonesia is an essential partner in promoting democracy, and combating Islamic extremism and terrorism. The United States has major economic and military interests in the shipping lanes around Indonesia, where close to half of the total global merchant fleet capacity transits. Indonesia is a major U.S. trade partner ($18 billion annually) with a large and growing economy (18th largest globally with 5 percent annual growth).

The Millennium Challenge Corporation deserves recognition for responding to Indonesia’s growing interest in green prosperity, and for understanding the essential role that natural resource management and renewable energy play in the MCC’s objective of poverty reduction through sustainable economic growth. The MCC has a strong tradition of investing only in projects that achieve a high rate of economic return for local communities (at least 10 percent) and this green prosperity program is designed to ensure the same. In short, the MCC is innovating while staying true to its mission.

Of course, success is far from guaranteed. Mismanagement and corruption are deeply embedded in Indonesia’s land-use sectors, and entrenched interests will fight against efforts to increase transparency and rationalize natural resource decisions. Indonesia will need to sustain the political will to overcome these challenges at all levels of government.

The MCC will also need to continue innovating by more fully and accurately measuring the economic benefits of proposed green prosperity investments. The MCC should measure not only the immediate jobs and income its projects create but also the broader societal benefits of proposed investments. Well-designed projects that avoid pollution and environmental degradation can lower heath care costs, improve water quality and security, increase agricultural productivity, and safeguard traditional sources of income (such as fruits, nuts and other forest products). These very real benefits must not be ignored, and recent advances in modern economics mean they no longer need to be.

Regardless of the challenges ahead, we must welcome the new bilateral compact between the United States and Indonesia to seek out a new, green prosperity. It’s the right vision and a good start.

[1] Chip Fay and Martua Sirait, in Which Way Forward?: People, Forests, and Policymaking in Indonesia, 2004.
[2] USAID, Growing Conflict and Unrest in Indonesian Forests, 2004; Human Rights Watch, Wild Money, 2009.
[3] United Nations Food and Agriculture Organization.
[4] U.S. Census Bureau and World Bank.
[5] United Nations Food and Agriculture Organization; World Resources Institute.
[6] The National Development and Planning Agency of Indonesia (Bappenas), Reducing carbon emissions from Indonesia’s peat lands, 2009.
[7] The Indonesian National Board on Climate Change, Fact Sheet – Carbon Emissions and Development, 9-6-2010.

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Working Findings: In-Depth Interviews with Youth in Eastern Indonesia

Here is a draft of the findings section of my ‘big’ paper about youth financial inclusion in Eastern Indonesia. The 15 page paper summarizes about 30 hours of in-depth interviews that I conducted earlier this year. While writing it, I thought to myself several times, “How I miss the trips to the village!” I will never forget all the times that I held my breath when the young people talked about how hard it was for them to make a living. They were always so kind and gracious, and maybe happier than some of us. One day we made rujak (a young papaya salad with sweet chili sauce) in Lombok. It was a quite a production, requiring over ten people to make one rujak. Everybody pitched in their own way. Then, when they started eating it they shreiked like little children. The chili sauce had about seven too many peppers. One of them remarked, “The only one who likes it this hot is the one who added the chilis.”

Major Findings

An analysis of the overarching themes in the data concludes in the following findings:

Youth generally lack financial literacy – There is a lack of financial literacy when it comes to financial products among the youth we interviewed. Most of them have never visited a bank. Except for a very few youth, youth could not understand the banking concepts that were in the market research questions unless the interviewer explained the concepts to them. However, they tend to know that banks and other microfinance services exist. They know people in their village who use banking institutions. Youth also mentioned learning about financial literacy after a negative experience. For example, Yana knows the importance of saving large amounts of cash in a bank because her father started to use bank services after he lost 14 million Rp (about 1400USD) on his way back from Malaysia. Nazri learned about interest rates and terms when he borrowed three million Rp from a moneylender to migrate to Malaysia.

Youth feel uncomfortable going to the bank – One challenge to reaching a youth market based on study of the demand is discomfort with using formal financial services. First, youth perceive the products as not used by people who do not have a formal wage. They perceive themselves as ‘masyarakat’ (common people) or ‘farmers’ and therefore different from people who have salaries and use banks, such as teachers and army officers.

When asked how he thinks people perceive him, 16-year-old Dani who did not finish primary school, said this: “Coming from people like me…well…[they perceive me] as someone who does not have a degree. [They feel they] have more and are smarter.”

As members of a close-knit village, the youth respondents tend to not want to stray from the norm. Behavior change, it would appear, requires someone ‘brave’ enough to try first.

“I have no courage to go there [the bank]. I don’t even think about it…. I am afraid, I mean I never have been to the bank before, so I am afraid to take a loan from a bank.” – 21 year old Delfi

Second, they were also were reluctant to save, borrow or lend to people whom they felt they did not know well.

The respondents in West Timor had the choice to save with loan officers in a newly launched savings account with an BPR in West Timor called TLM. Jeni saved about 30,000 Rp every week this way. She said she preferred this method to the local financial cooperative: “I choose TLM just because…. I am happier [with] them. Many people here choose TLM.” She mentioned that she trusted TLM because they had a relationship with the church she attended.

Third, youth perceived that there was either too much paperwork involved in banks or that the branch was too far for them to travel to justify keeping it outside their homes. Youth who did have BRI accounts opened them when they had a large enough amount of savings. The average threshold amount is difficult to gauge without a larger sample. In this study, there were five youth who put their savings in the bank if it reached more than 1 million Rp (about 100USD).

Fourth, they perceived opportunity costs to visiting a bank, including time and cost in terms of productive activities and travelling to the city.

Youth use informal financial services  – The most common form of saving was in the home. Usually it was in a bamboo box called a celengan. Ayu and Hilmiyah, always had about 100,000Rp each week for the following week’s living expenses. Jeni always had about 300,000Rp that she used for contingency expenses for her cake business. Other informal methods included saving with in livestock, saving with a loan officer/MFI, saving in school, saving and borrowing with a cooperative, arisan (group savings and loan mechanism), borrowing in-kind or zero percent loans from friends and family, or a loan at interest from a moneylending neighbor. Even if a youth knows how and where to access bank products, they are reluctant to make the decision to join because of the perceived convenience of services that exist in their village.

18-year-old Edi perceived borrowing from his family as the fastest and easiest way to pay for a sudden emergency that cost him about 100USD, but felt uncomfortable about asking them if they did not have the money.

Yusi: Is it convenient to borrow from family?
Edi: Yes, it’s convenient if the family has it. I can borrow when the family has the money whenever. Apart from that, it’s convenient because I can get it right away.
Yusi: If they are not alright, what then?
Edi: That’s all. If there is no money, then it’s not cool to ask, and then I don’t feel good about asking.

23-year-old Iwar saved in an arisan that she participated in with other women in the village once every month for the past five months and enjoyed the ability to buy things she would not have been able to afford on her own and because she enjoyed the socializing aspect:

If our arisan falls, and if we need it, yes, we are happy for sure. Just that. For example… also it’s fun because friends like to go to the arisan…It’s fast to get a loan…Yeah we just relax-relax (laughs). The profits are the advice that we friends give each other.”

While convenient, the most commonly perceived disadvantage of borrowing from others was the risk of gossip and losing one’s reputation. Delfi’s grandmother died and the family was forced to borrow a pig from a neighbor, which they are paying back “little by little”. The family also had to pay about 1.2 million Rp for the burial and the rice for the feast. When asked why she wouldn’t take out another loan, she answered, “It’s hard to take out a loan for us…. If we borrow from people around here, they don’t really believe in us.”

Youth face several barriers to managing their money (savings habit and on-time loan repayment). They include their small and unsteady incomes, lack of discipline and they may be less committed to saving long-term because of their mobility.

Youth who were a part of this study worked in small farm agricultural, or owned small businesses. They were motor taxi drivers, kios (convenient store) owners, fish sellers, vegetable sellers and to a lesser degree kindergarten or primary school teachers and warung (restaurant) employees. Unless they received a sufficient amount in remittances or worked in the formal sector, youth had an unsteady income, which affected their ability to save and budget for unexpected expenses.

“Every month saving is not steady. Because we teach in a private school, so the income is not steady. So we don’t know when we can save our salary.” – 24 year old Arnold

When we asked 17-year-old Roni if he saved on his own, he explained that he is just a teenager and lacks the discipline to save:

Yusi: Roni, do you save? How do you do it?
Roni: Never. Money that is given to me, it’s already gone.
Yusi: Why didn’t you think about saving it?
Roni: Because with teenagers, we spend what we get right away.

24-year-old Nazri’s mobility has affected his ability to be loyal to just one financial institution. For example, he withdrew all his savings at the school after he realized he was going to Malaysia instead of continuing on to junior high school. He discontinued saving in the LKP cooperative after he decided to Malaysia for a second time. He discussed why he has taken so long to finish school, which he attributes to the unemployment and underemployment in his village and timely opportunities:

“I am a madrasah junior high school student. Actually I just graduated and will go on to high school. I graduated primary school in 1999 but I took a break before joining the madrasah. In 2001, after my break, I had a small problem [paying for school]. Because there was no work at home, I went to Malaysia for two years, and then I came back here, joined a computer course in Mataram, but it wasn’t useful. Finally, I went back to Malaysia, and in 2008 I came back here again. Here, you know, every day is just like this. Last year I wanted to register to go to Singapore, but there was some difficulty and I decided it was better to just attend school.”[1]

There is demand for financial products – There is a large demand for formal financial products. Even if a youth did not have any experience with financial instruments, when asked if they needed them they always mentioned at least a few that they felt they needed.

For example, 24-year-old Arnold expressed feeling dissatisfied about never having very much money at any one time and perceived a minimum balance account as an opportunity to create a nest egg: “If there is a choice like that [50,000 Rp minimum balance], I like that…. The reason is because at least it’s nominal. It is a pretty big deal for common people like us.”

Remittances can serve as an entry point to formal banking.[2] All youth had some a migrant family member or had at one point migrated and sent home remittances. Several youth who have migrant siblings mentioned that they needed ATM cards and bank accounts in case they wanted to receive money from relatives.


An improved understanding of the behaviors, needs and demands that motivate youth to use financial services warrants improved product design. This paper offers recommendations regarding products and features that would resonate with rural youth of Eastern Indonesia who live in similar conditions. One should bear in mind, however, the success of a new financial product, policy or program will depend on sound commercialization and marketing strategy. [3]

Market segmentation – The youth market can be segmented, and financial products designed for their particular segmented needs, based on age, school going status, remittance relationship, degree of financial responsibility and ability to save:

–       Age –youth with a KTP national identity card who are eligible to open a bank account (age 17-24) vs. youth who are not old enough (age 15-16).

–       Degree of financial responsibility – youth who contribute minimally to household expenses vs. breadwinner who acts as head of household because parent breadwinner has died or is unemployed. The findings from this paper finds that taking on a large financial responsibility is a better segmentation nexus than age because youth can be forced to take on adult roles at any age depending on their family’s particular circumstances.

–       Ability to save – youth who own an amount of money large enough to not feel safe keeping in the home vs. those will an amount of money they perceive as being too small to validate a trip to the bank.

–       Remittance experience – youth have experience sending or receiving remittances with a banking institution vs. youth those who have not. Includes married women with husbands who regularly send remittances, current or former migrant workers that have sent remittances and family members of migrant workers who send remittances.

These segmentations suggest that youth use financial services differently based on their maturity level. It also suggests that young people use financial services that are pertinent to their lives: as individuals who must cover their own personal expenses and as members of a family or larger social unit, or both. They are also slightly different from those found in the Plan study (age and marriage status) and the Micra study (employment status).

Products and features 
While products and features are segmented to some extent, there were some general trends for all youth:

–       Savings accounts – Savings is an appropriate response to the varied aspirations, responsibilities, financial difficulties and money management challenges that youth face. While youth admittedly used microfinance loans to smooth consumption needs, this is most likely not a sustainable solution to their long-term consumption needs. Youth who had a history of poor repayment and were constantly probed by a loan officer or moneylender became averse to taking out additional loans. In addition, many researchers point to the so-called “asset effect” of building up assets through savings. They argue assets rather than consumption are the key to economic improvement for the poor; asset accumulation provides not only material comfort but greater psychological and social well-being as well (Zimmerman and Deshpande 2010: 2).

–       Mobile products – In East Indonesia, where there are depressed wages resulting from poor agricultural profits, youth will want to migrate for work. Knowing this, it would be wise to offer mobile products and other products that accommodate the transnational nature of the financial exclusion problematic.

–       Mobile banking/door-to-door banking- Youth indicated that the most important feature of a service they wanted was that it was close. They perceived this as being convenient, fast and low cost.

–       Emphasis on customer service vs. price and quality –Youth identified characteristics of good savings and loan products as ‘easy’, ‘fast’, ‘convenient’, a ‘solution’ (jalan keluar) or ‘help’ (bantu) for their cash flow problems. They preferred staff who they knew that would be able to collect on a weekly versus a monthly basis and who could potentially help with their particular business or financial literacy training needs.

–       Cultural competency – Features from informal or traditional products that youth already use can be adapted to formal financial instruments. The administration of these products could take place in the village’s church or mosque, posyandu (maternity center)/village head’s house/village office, primary school or puskesmas (health clinic) and involve stakeholders from local leaders and the parents of youth in the rollout process. If it is a program, it should be offered during times of the day when youth do not have other competing productive or social obligations. Major times in the year to avoid in Lombok are its major holidays, in particular, Ramadan and Lebaran as well as funerals in the village; in West Timor: Christmas, communion season in Catholic families. Harvest times such as the month of June would be auspicious, as people tend to have more disposable income to save. Tying the product to a respected institution, as modeled by TLM’s relationship to the church, can serve to create trust around the product.

Conclusions and further research: Many of the findings confirm previous studies, including the lack of financial literacy and youths’ inclination towards savings over credit. There are also two new findings. First, because youth in depressed areas in Indonesia coincide with high rates of migration and the nature of the Indonesian remittance environment, youth respondents were forced to interface with banks when they remit or receive remittances.  Further research should explore the nexus between remittances and financial inclusion outcomes. Second, because there appears to be some savings threshold at which youth decide to save in a bank, further research is necessary. Studies of statistically significant sample sizes could confirm, deny or elaborate on these two qualitative insights.

[2] The distribution of remittances received in Indonesia through formal regulated channels is concentrated in the banking sector. Six Indonesian banks dominate the formal remittance market: Bank Negara Indonesia, Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Bank Niaga, and Bank Danamon.[2] After the funds have arrived in the Indonesian bank, the recipient can withdraw the money from the local bank branch. Source: Hernández-Coss, R. et al., 2008, “The Malaysia-Indonesian Remittance Corridor”, World Bank. Available at http://www.google.com/url?sa=t&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fsiteresources.worldbank.org%2FINTAML%2FResources%2FMalaysia-Indonesia.pdf&rct=j&q=remittance%20Indonesia%20from%20Malaysia&ei=drmPTtjYDaPk0QHqydBM&usg=AFQjCNGmyHo0rt3G9qav937eb0AcAB9g1A

[3] Findings from this study are by means meant to inform product design before additional product development and refinement takes place. For more information about MicroSave’s industry leading market-led microfinance product development, visit www.microsave.org.

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Indonesia’s Domestic Workers: Economic Heroes, Victims of Foreign Policy Failure

June 16, 2011—the International Labour Conference signs ILO Convention No. 189 on decent work for domestic workers.[1] In a speech to the ILO, President Susilo Bambang Yudhuyono calls Indonesia’s migrant workers the country’s “economic heroes” and labor experts call it a surprising breakthrough for millions of exploited women. [2] Two days later Saudi Arabia beheads an Indonesian maid named Ruyati binti Sapubi.[3] The condemned woman, who killed her employer, said she had been abused.

The turn of events highlight the need for protections and the challenges of putting them in place.

Stories like Ruyati’s regularly make the front pages of Indonesian papers. Sumiati binti Salan Mustapa, another maid who worked in Saudi Arabia, was hospitalized in Medina last year with broken bones and a mutilated face. The conviction of her employer was overturned. Keni binti Carda, an Indonesian maid, went home in 2008 with scars spread across her back and face. She said her employer burned her with an iron and forced her to eat excrement. Similar stories will continue to emerge if not enough is done.

ILO estimates there are up to 100 million domestic workers employed around the world.[4] Fearing deportation, domestic workers often become bonded labor to pay off those who smuggled them to the new country. To keep workers in bondage, passports are confiscated from them. It would seem that slavery does not only come in the obvious form in which one person owns another person.[5]

Part of the blame lies on sending countries’ governments. For example, Human Rights Watch has found that Indonesian migrant domestic workers continue to confront a range of abuses both during the recruitment process and while employed abroad:

“The government has failed to stop local recruiters from charging prospective migrants exorbitant fees that leave them highly indebted, which contributes to situations of forced labor abroad. Citing concerns about abuse, the government has maintained bans of new migration to Malaysia and Kuwait, and in 2010 imposed and lifted a ban on migration to Jordan. Negotiations to revise a 2006 memorandum of understanding with Malaysia on domestic workers, initially expected to be concluded in 2009, have repeatedly stalled on establishing a minimum wage and a recruitment fee structure.”[6]

The other end of the problem is the unhealthy competition from countries that demand less protection. In countries where domestic workers make up most of their overseas workers, such as Indonesia and the Philippines, domestic worker protection has become a foreign policy issue, which they often find themselves on the losing end of. [7] Instead of responding to the negative publicity and calls for accountability after Ruyati’s execution, Saudi Arabia announced it would no longer allow new hires of Indonesian and Filipino domestic workers. Saudi recruiters then described plans to hire thousands of Bangladeshis at wages of $170 a month, less than half what the Philippine government demanded.[8]

After a string of abuse cases in Malaysia, Indonesia announced a freeze on migration in 2009 but lifted its ban two years later, after Malaysia started recruiting women from Cambodia and negotiations went practically nowhere. Indonesia won a few concessions and no guarantee of a minimum wage. [9]

History shows that freezes on migration and bilateral negotiations do not result in effectively securing better employment conditions for the long-term. More often they just shift migration patterns — with increased migration from countries that seek fewer protections for domestic workers.

What should be done? More must be done to implement the good intentions of the newly signed Convention on both ends of the problem, and from the world’s most influential players. Sending countries’ governments, in addition to signing the Convention and continuing to make demands of receiving governments, should also prohibit the practice of charging migrant workers recruitment fees and insist the cost be borne by employers, educate workers about their rights before departure. These governments should also make agencies responsible for ensuring passports stay with the workers and take reasonable measures to screen the employers they contract with.

More international pressure needs to be placed on receiving countries to implement the principles of the Convention. Seeing that negative publicity and calls for accountability have resulted in few changes, international pressure should take on more serious forms. For example, the world’s most influential trade partner, the United States, could impose incentives and punishments around the issue in bilateral negotiations on receiving countries and sending countries that continue to ignore protections that are set out in the Convention. Domestic worker protection, after all, is important because it is a question about the morality of slavery.

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A Visit to Dian Desa in Maumere

In August, I went to Flores. Not only was it one of the most beautiful place I have been to, but it is also one of the least developed islands in Indonesia.

Dian Desa works to build awareness about sanitation and asked me to help them market their new pre-fab toilet product to the 500 villages they work with in Sikka province.

By the way, apart from drinking all the homemade vodka you could ask for, Sikkanese people have a long and rich history.

Unfortunately, none of the culture or history is documented despite all the anthropologists that exist. My friend Haeke is currently writing a book with a Sikkanese expert in Maumere before it all disappears. If anybody is interested in helping her do this, let me know.

Here are some pictures of the JDD toilet that is mentioned in the rest of this blog.

Recommendations for JDD Marketing

After reading the affordability and willingness to pay report, I identified four major problems regarding sanitation in Sikka (26):

  1. Innovative Financing Scheme is needed.
  2. Technical solution to address such problem is needed.
  3. Innovative sanitation service provider (which take into account the “practicability aspect”) is needed Innovative sanitation service provider (which take into account the “practicability aspect”) is needed.
  4. Intervention related to awareness and behavior change is needed.

I did not include ‘awareness-behavior change problem’ in my analysis because the report mentioned that at present it is done through STBM (26). I also could not offer any technical solutions for problems relating to the toilet-making private sector (‘technical solution needed’) because I do not have enough information about the private sector providers there. I think that Dian Desa has solved the ‘innovative sanitation service provider needed’ problem because Dian Desa developed the JDD toilet, a pre-fab toilet that meets the needs of the ‘practicability aspect’ mentioned in the report.

Given these constraints, I focused my recommendations on the ‘innovative finance scheme’ problem and offer the following recommendations (26).

All of the seven recommendations that I offer should meet the three features of good sanitation marketing. These recommendations respond to opportunity, motivation and ability to purchase the JDD based on the information that I have[1]:

R1) Identify the people who want to buy the JDD toilet. Then, market it using salient messaging.

There seems to be demand for the JDD. The study shows that 57.9% of respondents were willing to pay for a ready-made toilet like the JDD toilet (29) and that the average ability to pay is about 84,000 Rupiahs per month. There is also a gradation of the ability to pay (30).

Dian Desa should use door-to-door, in-person conversations with people they already do awareness trainings for. This is the most effective way to work with the population, both rural and urban. This can be done in the village meetings or home visits or existing groups that have a history of receiving other Dian Desa services. A map of where the families who are interested should be created for follow-up and tracking purposes. All tracking should be done in a shared document that all staff can access in case the responsible staff member become absent.

Note: In a separate document, I offer a focus group discussion tool that you can use to identify and test the main messages for including in marketing products such as a conversation guide.

Based on the reasons for not owning a toilet in the report, there are already several basic messages that should work because they respond to people’s excuses for not owning a toilet.

Affordability messages:

“We offer an affordable installation plan.”
“It costs only X per month.”
Reason: Economic reason and to be simple. No money to make private family toilet.
Space messages:
“You don’t need land for the JDD toilet.”
“The JDD toilet takes up less space than a camplung”

“If you don’t have land, you can share a toilet with a neighbor who does not have a toilet, and share the costs too.”

Reason: No space to make private toilet. For example the land is very limited and no possible space. Such reality is commonly found in densely populated urban area.

Convenience/tidakribet/enak messages:

“JDD is convenient”

“JDD enak dan nyaman

“JDD technicians build the toilet for you.”

“It only takes six hours to put together” OR “There are only x number of steps and they are….”

“No need to know how to build a toilet.”

“No need to dig a pit.”

“No need to build a slab.”

“The JDD is already made.”

“No need to buy materials from the city.”

Reason: in Indonesian term, usually it is called as “ribet” which more or less means “too complicated for me”. For example someone needs to save money. After that he needs to procure needed materials from the city which is very far from his village. Then bring respective materials to village. The next headache is to get skill labor in respective village. On other hand he is not idle and practically every day has to work to survive. The bottom line of this reason is “no appropriate service provider”

Reason: Technical reason such as do not know how to make correct toilet. On top of that the local available skill he also does not know about labor in respective villages.

Habit messages:

-no suggestions, STBM awareness campaign is sufficient

-demonstration effect from neighbors and peers may eventually change attitude

Reason: Habitual reason such as feel very inconvenience to defecate in toilet and prefer in open space.

Example of typical response: “Yeah, I am embarrassed if people pass by, but I think everybody is used to it, everybody also does that …”

“If everyone is doing it, then why can’t I? Conversely, if no one is doing it, can I?”

Legal messages:

-no suggestions

Reason: Legal status reason – for example the house where they stay is not owned by them (rent or borrow from relatives). In other words they perceive as temporary settlement only.

Water shortage/natural condition message:

“The JDD toilet comes with a water delivery service”

“The JDD toilet can be built on your neighbor’s house.”

Reason: Reason related to natural condition. For example water is very scarce or their house is located above water, etc. So they think that it is impossible to make any toilet in such condition.

Awareness messages:

-no suggestions, STBM awareness campaign is sufficient

-demonstration by neighbors and other peers may eventually change perspective

Reason: Existing practice is enough or good for them. In other words they feel/perceive that the way they defecate is OK and no need to make any toilet. This reason has close correlation with their level of awareness.

Examples of typical responses. Be prepared to respond to these:

“We have been defecating in open places over the decades. We acquired this habit from our antecedents. It has been transforming from generation to generation. We haven’t yet given up this habit. I think it will take more time to be habituated with the latrine use.”

“I don’t think it is a mistake [to defecate in the open] as I often see that my waste is beneficial to feed the fish in the river. They eat it directly while it is there.”

“If the water goes to the paddy field, [my waste] can act as fertilizer; it will help the paddy to grow, using organic fertilizer.”

Other Messages:

There may be other messages although they will need to be tested with a focus group first. Some other suggestions are the following, and come from other sanitation programs from around the world:


“Avoid snakes, toilets are safer”

“Buy a toilet; it’s safer for you and your children.”

“Children can use the toilet”


“JDD is comfortable”

“Toilet nyaman”

“No more flies”

“A toilet that is clean and does not smell”

Privacy (for women in particular)

“Buy privacy”


“The JDD toilet will make you an important person to your village.”

“Toilet keren”

Pride and self-esteem

“Don’t be a person who defecates outside.”

“Don’t be ashamed anymore.”


In follow-up conversations with households who express interest, it will be important to have them answer the following questions to ensure they are ready to purchase this agreement. The marketing field person can help to find answers for these questions if the household asks:

What type of latrine should be built?

What features does the JDD have that I need?

How much will be spent and how will money be saved up?

Where will it be installed?

Who will be able to access and use it, that is, will it be shared with neighbors?

Who will choose the construction materials? Where will they be bought and who will do the actual purchase?

Who will install the latrine?

R2) Do not offer a loan option. According to my conversations with Joko and Shantoy, the villagers are backed up on credit from four years of successive droughts. It is important to segment the market. I think there are two markets: Strata A and Strata B, C, D.

After segmenting the market into these two groups (Strata A and Strata B and above), Dian Desa could offer the following financing three schemes:

R3) Offer an 85,000 Rupiah per month installment option – one JDD per household. This option targets Strata B, C and D who are willing to pay for a toilet and do not already have toilets.

In general, Dian Desa needs to create a cheaper installment plan because 75% of those without a toilet were living under the poverty line (31). The research showed that 42.05% were willing to pay up to Rp 50,000 per month even if they were poor and 37.50% were willing to pay Rp 50,000-100,000 per month, while only 14.20% were able to pay Rp 100,000-150,000 per month. The installment price should be equal to the average all no-toilet consumers are willing to pay, Rp 85,000, in order to draw in the Strata B and above market.

Ability to Pay

Economic Strata

Up to Rp 50,000 per month

From Rp 50,000 – Rp 100,000 per month

From Rp 100,000 – Rp 150,000 per month

More than Rp 150,000 per month

Grand Total

Strata A – under Poverty Line






Strata B–Fragile 1






Strata C–Fragile 2






Strata D – Not under Poverty Line






Grand Total






R3) Offer a collective installation and billing option (84,000 Rupiah per month[2] divided by three or four neighbors)–one JDD for three or four households. This option targets Strata A, who comprise mostly of the no-toilet market which can pay no more than Rp 50,000 per month. This option should be marketed to neighboring houses living below the poverty line (Strata A) that do not have toilets.

Because Strata A makes up over 70% of the market, it will be important to offer collective installation and collective building. The benefit of the collective billing option is that it helps to lower costs to a point where the willing Strata A customers are able to pay for it, and it effectively provides Dian Desa with group insurance coverage regarding the bill payment. In the collective billing option, individual households provide this insurance by assuming liability for the full extent of the services consumed. Because they are all neighbors, they have the most to lose from failure to pay due to moral authority and ability to impose sanctions on each other. This option also provides social insurance to the members, because if one household has cash flow problems in a given month, the other members can help cover shortfall.

R4) Offer a bulk toilet installation and billing option (840,000 Rupiah per month) serving up to forty or fifty households – 10 JDDs per village. This option targets Strata A customers who cannot find neighbors to go into the three to four family collective installation and billing option with. This option should be marketed to residents without toilets during the regular village meeting. Residents pay per use to use the toilet at something like 1000 Rupiah. Revenues that exceed the installment could be kept in an emergency fund that can be used for those months when revenues are not enough to reach monthly installment cost.

R5) In areas where water is scarce, offer a water delivery service that is priced within the price thresholds that residents already pay for water. While this may not be beyond the scope of Dian Desa’s work, it will surely increase the likelihood that they will expect to use the JDD toilets as thee require water to function.  Sikka residents already spend 2.5%-10% on water (30). A new water delivery service will also increase legitimacy of Dian Desa as a service provider in these villages. By heightening the economic and social benefit of Dian Desa in the community, Dian Desa will be able to enlist the support of villagers to market, monitor toilets’ maintenance, protect the toilet infrastructure, and ensure timely billing. More value is at stake if they cannot resolve their problems together if Dian Desa is also the provider of other basic services such as water provision.

R6) Offer sanitation collection service. I don’t remember hearing about a collection service but this is the last step to most sanitation marketing programs, and will ensure that people continue to use the toilets because they are properly maintained.

Note: If Dian Desa chooses to offer water delivery, waste collection or both services—it will be important that these services are to be included in the price of the monthly installment when building in these costs to the total price.  This fee should not be advertised as an extra fee, but should be marketed as one of the services included in the purchase.

R7) Do not market the program in October or December. This is a time when people are saving up for communion and Christmas celebrations. They will not prioritize spending on home improvement and this may shape their attitudes towards marketing efforts. If there is information about other big ceremonies such as weddings, funerals, birthday parties, etc., it will be wise to avoid marketing during such times. If the marketer can find out when there is extra income, such as directly after a successful harvest or when villages receive beras miskin, this would be an optimum time to market the program.

[1] Opportunity: Does the individual have the chance to perform the behavior?

Ability: Is the individual capable of performing it?

Motivation: Does the individual want to perform it?

[2] Average price willing to pay was Rp 83,700 (30).

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West Timor Research Insights from a Boren Fellow

1 May 2011

Yvonne Chen, a Boren Fellow in Indonesia (2010-2011) and a graduate student at The George Washington University’s Elliott School of International Affairs, contacted me after reading about my experience here at TLM on the Kiva Fellows blog.  She was interested in conducting her research study in West Timor with TLM to collect data for her thesis on youth financial inclusion in East Indonesia.  Despite her busy schedule, Yvonne was able to share some findings from her West Timor research as well as thoughts on Indonesian microfinance and Kiva’s work.  Enjoy reading the interview below!

Youth borrower, Yani, and her little sister

Q1:  What initially interested you in microfinance and pursuing a degree in development?

Developing countries have always interested me. I grew up to stories about how hard life was for my parents who lived in China before immigrating to America in the 70s. It made me interested in learning about the political and economic conditions that encourage so many people to leave their homes.

I was introduced to microfinance in an international development class in college.  My first thoughts were that it is a far more effective solution to reducing poverty than traditional forms of foreign aid. Look at a country like Haiti, which has received foreign aid for the vast majority of its existence, yet remains one of the poorest countries in the world.

Research assistant, Dewa, and youth borrower, Eki

Q2:  What made you pick your research topic of youth financial inclusion?

When forming my research topic, I knew I wanted to do something that I cared about and I wanted to make a contribution to the development field.

There is not a lot of primary research about how and why poor young people use financial services. Portfolios of the Poor is a groundbreaking study that looks at the financial lives of the poor.  But no published studies to date look at the financial lives of youth in particular. So I saw an opportunity there.  In fact, I borrowed some of the ‘portfolios’ methodology of Portfolios of the Poor for my own research.

As for studying youth, I think the youth population in a country is incredibly salient to the development of a country. In many developing countries there is a youth bulge, that is, youth make up the majority of the population.  Youth movements have led to social change [or political instability depending how you like to look at it]. The Arab Spring movements are an example of the power of youth. However, youths’ needs are much more acute at this stage of their development, and unlike children, they tend to lack an accessible safety net e.g. parents, guardians, or school structure for out-of-school youth. With the pressing social, economic and health issues in a developing country, the situation of young people is more vulnerable than that of older age groups.

Youth borrowers, Yohana and Yosefina

Q3:  Can you summarize your research process at TLM?

I emailed Lisa, who was gracious enough to ask the TLM staff if I could research with them. Then, when I arrived in West Timor, Shanty, the PR Representative at TLM, introduced me to Pak Jon, one of the branch coordinators in Kupang. Pak Jon then talked with his staff and created a list of clients who fit the criteria. During the week, we went out with loan officers to meet the borrowers in their homes and interview them. My research assistant, Dewa Keta, conducted the interviews in Indonesian and I guided him when there were problems, set up the camera and recorder, and took notes about the setting and the flow of the interview. Most of the places we went to were villages that lie about 30 minutes from the center of Kupang. Some of the clients also introduced us to neighbors who fit the criteria, whom we also interviewed. We also interviewed Pak Jon and talked with the loan officers to get information about TLM and the kind of products that they offered. We interviewed a total of 15 people over six days.

Youth borrower, Gaspar, and his family

Q4:  Were there any trends or major findings from your West Timor interviews?

We have not analyzed the transcripts yet so I cannot say definitively. But I can speak about some of my general impressions from observing the interviews.

First, there is a lack of financial literacy when it comes to financial products among the youth we interviewed. Most of them have never gone into a bank and have no idea how many products work. The ones who do understand a lot of what’s out there for them are usually youth who have experience with financial products. They tend to be married, are the primary breadwinners in their households, or have run their own business for some time.

Second, location is very important. Many of the people we interviewed had no vehicle and used a bemo or ojek to get into the city, so it costs them both time and money to get to a bank, even though they live just thirty minutes outside the capital city. TLM clients liked that someone comes to their door to tell them about the product or to make transactions with them. There was only one client who was a commercial bank client, and it was for the local BRI. The other product they knew about were from the local koperasi.

Third, many of the clients used informal financial services. For example, they said they usually saved in the form of cash in their homes and in the form of livestock. When faced with a financial emergency, they said they ask friends and family for help.

Fourth, there seems to be demand for many kinds of financial products. I think this can be explained by the context in which youth live. For example, when asked what their plans were in the next five years, many said they planned to look for work, start a business, start their own families and build a house. So it makes sense that some of the most highly demanded products they mentioned were bank accounts, home loans, and business training.

Home of youth borrower accessible only by foot on an irrigation canal

Q5:  You found out about TLM from my posts on the Kiva Fellows blog – how did you first hear about the Kiva Fellows program?

Someone at a Christmas party four years ago mentioned receiving a Kiva loan for Christmas, and explained the concept to me. I also have some friends who were fellows.

Q6:  Any general thoughts on Kiva’s work?

Kiva offers a very reliable way to invest in microfinance. I like that Kiva verifies client information and takes into account their partner MFI’s financial performance. Moreover, having worked in NGOs before, and seeing how much of a budget goes towards overhead costs, I also think Kiva loans are an effective alternative to giving money to a charity. All of your investment goes towards a borrower who needs it. After visiting Kiva’s site in West Timor and seeing the good work they do, I decided to become a lender for the TLM group.

Youth borrower, Maria, and her one year old baby

Lisa Skowron (KF14) is currently working with Kiva’s MFI partner, TLM Cooperative, in West Timor.  Check out TLM’s lending team to stay tuned to the latest news.

Previous posts from Lisa Skowron:
Huh, There’s a West Timor?
Video Blog: Trek to Kanaan Village
Hear that? It’s Kupang Bemo Rap!!
A Different Spin on Mobile Savings 

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Entry filed under: Indonesia, KF14 (Kiva Fellows 14th Class), Tanaoba Lais Manekat (TLM). Tags: , , , , , , , , , .

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A Religious Sect and a Mosque Takeover

Last month, a brutal attack against members of the Ahmadiyah occured in Cikeusik, Pandeglang (Banten) that  killed three Ahmadis in the presence of police officers. Now, the mayor of Depok (West Java) ordered the reopening of an Ahmadiyah mosque, which was previously closed. The mosque was reopened for use by all Muslims – except the Ahmadis themselves.
Ahmadiyah is a sect of Islam that was founded in Qadian, Punjab, India, in 1889 by Mirza Ghulam Ahmad (1839-1908) who claims to be the mahdi – a figure expected by some Muslims to appear at the end of the world. The group is guided by a Khalifa (Caliph), a spiritual leader who claimed to communicate with the Almighty and become the successor of Mirza Ghulam Ahmad. Ahmadiyah was first introduced to Indonesia in 1925. There are two groups of Ahmadiyah in Indonesia: Jemaah Ahmadiyah Indonesia (JAI), also known as the Ahmadiyya Qodiyani, and the Indonesian Ahmadiyya Movement (GAI), also called the Ahmadiyah Lahore. While JAI believe Mirza Ghulam Ahmad is the last prophet after Muhammad, GAI consider Mirza only be reformer. The Indonesian Ulema Council declared both JAI and GAI as cults that do not fall into any of Indonesia’s six official religions. In 2008, the Indonesian government issued a joint decision on the recommendation by the Coordinating Body Monitoring Mystical Beliefs in Society (Bakor Pakem) banned the Ahmadiyya sect on the grounds that it failed to carry 12 articles of the Islamic declaration of compliance. After this statement was issued, the attacks on Ahmadiyah increased.

I do not agree with the Mayor of Depok or anyone who thinks it is alright to coerce Ahmadis to stop practicing their religion. Ahamadiyah followers have the right to practice their religion, just as anyone should have the right to practice the religion that they choose, without the fear of persecution or forced conversion. Regardless of whether the Ahmadiyahs are truly Muslim or not does not seem to matter – not  when we are dealing with a country that it is a modern democracy whose motto for statehood is ‘unity through diversity’.

First, it is arguable that the Depok administration has undermined the basic principles of the Qur’an itself. According to the Qur’an, no compulsion in religious life. I believe that the teachings of Islam have deviated from that written in the Qur’an in Indonesia, to such a point where minstream Muslims have used physical violence as an act of intimidation against a group that differs in their religious practices and beliefs.

Second, the intolerance of religion is illegal. This contradicts the second principle of Pancasila (the five-point ideology upon which Indonesian law is derived), which is a just and civilized humanity. Moreover, Indonesia is also one of the signators of the UN Charter on Human Rights. Thus, when there is violation of human rights such as religious persecution, the government has the duty to step in to stop the violation of the human rights of its citizens, not encourage such violence or stand back, for that matter.

Opponents of this issue are vast. In a letter dated March 15, twenty-seven members of the Congress of the United States has sent a letter to President Susilo Bambang Yudhoyono to revoke the decision of the government in East Java, West Java, South Sumatra and South Sulawesi, on the grounds that it discriminates against the minority Ahmadiyah sect and religion. The Presidential Advisory Council has advised President Susilo Bambang to oppose a ban on the Ahmadiyah sect. Some community groups also defend the right to exist of the sect, including the Institute of Culture and Humanity (Maarif), the Alliance for Freedom of Religion and Belief, the Wahid Institute, Legal Aid Institute (LBH), the Commission for Disappearances and Victims of Violence (Contrast) and Equivalent Institute. The sultan of Yogyakarta and Jakarta’s governor refused to issue a decree in their respective provinces to ban the Ahmadiyah sect and disagree with the acquisition of the house of worship in Depok. They claim that religious issues are not the authority of provincial governments, but the Ministry of Religious Affairs.

This turn of events in a country that prides itself on diversity is unfortunate. A bad precedent for future acts of violence against non-mainstream religions? It starts with first with the killing of three Ahmadi, then the banning of their religion, then then took over the house of worship. What next? Prohibition of Shia and Sufi Islam? The take over of churches and Hindu temples? The president tends to remain silent when sensitive issues such as the hotly debated issue of whether or not Ahmadiya is in fact Islam, at the cost of alienating voters. But here is a chance for him to stand up for what Indonesia strives to be, and which the world looks at it to serve as an example of, which is a vibrant democracy that protects the basic human rights of all its citizens.

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