Rural-urban linkages for

poverty reduction
A review of selected approaches
from Asia and the Pacific

United Nations
2005
 Acknowledgement

This document is part of an on-going project on rural-urban linkages for

poverty reduction being implemented by UNESCAP. The case studies were
prepared in collaboration with Mr. Ramesh B. Munankami (Nepal), Ms.
Marivel Camilon Sacendoncillo (Philippines) and Mr. Wicaksono Sarosa
(Indonesia).

E/ESCAP/2405

Disclaimer

This publication has been issued without formal editing.

The designations employed and the presentation of the material in this

publication do not imply the expression of any opinion whatsoever on the part
of the Secretariat of the United Nations concerning the legal status of any
country, territory, city or area or of its authorities, or concerning the
delimitation of its frontiers or boundaries.

The views expressed in this document are those of the authors and do not
necessarily reflect the views of the United Nations Secretariat.

The opinions, figures and estimates set forth in this paper are the
responsibility of the author, and should not necessarily be considered as
reflecting the views or carrying the endorsement of the United Nations.

Mention of firm names and commercial products does not imply the
endorsement of the United Nations

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 Table of contents

1. Introduction.................................................................................................................1
2. The rural-urban partnership programme (RUPP) – Nepal.......................................3
2.1 Background ....................................................................................................................... 3
2.1.1 Spatial Analysis ......................................................................................................... 3
2.1.2 Physical Infrastructure ............................................................................................... 4
2.1.3 Communications........................................................................................................ 5
2.1.4 Environment .............................................................................................................. 5
2.1.5 Settlement System .................................................................................................... 6
2.1.6 Social Profile ............................................................................................................. 7
2.1.7 Economic Profile ....................................................................................................... 8
2.1.8 Demographic Profile.................................................................................................. 9
2.2 Development context....................................................................................................... 11
2.2.1 Main development issues ........................................................................................ 12
2.3 Focus of rural-urban partnership programme.................................................................. 16
2.3.1 The Basic Premise: ................................................................................................. 16
2.3.2 Basic Strategies: ..................................................................................................... 17
2.3.3 Operational Strategies:............................................................................................ 17
2.3.4 Poverty Alleviation through rural-urban linkages ..................................................... 19
2.4 Structure and Components of RUPP .............................................................................. 21
2.4.1 Poverty Alleviation through enterprise development based on rural-urban linkages22
2.4.2 Urban Governance for rural-urban linkages ............................................................ 25
2.4.3 Empowering the Women ......................................................................................... 31
2.4.4 Addressing the Needs of Disadvantaged Group ..................................................... 31
2.4.5 Addressing HIV/AIDs Issues ................................................................................... 32
2.4.6 Addressing issues of Internally Displaced People (IDP) ......................................... 33
2.5 Long-Term Impact of the Intervention/Practice ............................................................... 33
2.5.1 Possible long-term effectiveness............................................................................. 34
2.5.2 Paradigm shift ......................................................................................................... 37
2.5.3 Sustainability ........................................................................................................... 37
2.5.4 Externalities ............................................................................................................. 38
3. Metro Naga Development Council – Philippines ...................................................39
3.1 Background ..................................................................................................................... 39
3.1.1 Location and Physical Features .............................................................................. 39
3.1.2 Infrastructure Services ............................................................................................ 41
3.1.3 Hierarchy of Settlements among MNDC LGUs ....................................................... 45
3.2 The Metro Naga Development Council ........................................................................... 49
3.2.1 Formation of the MNDC .......................................................................................... 49
3.2.2 Main Stakeholders and target groups ..................................................................... 50
3.2.3 Development Strategies of the MNDC .................................................................... 52
3.2.4 Development Roles of the LGUs ............................................................................. 53
3.2.5 Problems Addressed ............................................................................................... 54
3.2.6 Effect of MNDC on rural-urban linkages.................................................................. 56
3.3 Long term impact of the MNDC....................................................................................... 58
3.3.1 Development Mechanisms for Member-LGUs ........................................................ 58
3.3.2 Equity in the Distribution of Benefits among its Members ....................................... 59
3.3.3 Observed Benefits of the Development Mechanisms and PPAs............................. 60
3.3.4 Direction and Pace of Development ........................................................................ 63
3.3.5 Paradigm Shift ......................................................................................................... 64
3.3.6 Sustainability ........................................................................................................... 64
3.3.7 Financial Viability..................................................................................................... 66
3.3.8 Replicability ............................................................................................................. 66
3.3.9 Impact on externalities ............................................................................................ 66

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4. Partnership for local economic development – Indonesia ...................................68
4.1 Background ..................................................................................................................... 68
4.2 Partnership for Local Economic Development in the Tanggamus Region – Province of
Lampung ..................................................................................................................................... 71
4.2.1 Physical-Geographical Conditions........................................................................... 72
4.2.2 Social, Economic and Demographic Conditions...................................................... 73
4.2.3 Legal/Regulatory Frameworks................................................................................. 76
4.3 Intervention by KPEL in Tanggamus............................................................................... 76
4.3.1 Brief History of KPEL’s Intervention in Tanggamus................................................. 76
4.3.2 Concept and Application of KPEL ........................................................................... 77
4.3.3 Implementation Process .......................................................................................... 77
4.3.4 Program Impacts ..................................................................................................... 78
4.3.5 Lesson Learned....................................................................................................... 82
4.4 Rural-Urban Linkages in Yogyakarta Special Region ..................................................... 83
4.4.1 Background ............................................................................................................. 83
4.4.2 Physical-Geographical Conditions........................................................................... 84
4.4.3 Social, Economic and Demographic Conditions...................................................... 84
4.4.4 Legal/regulatory framework ..................................................................................... 85
4.4.5 Brief history of the RUL phenomenon ..................................................................... 85
4.4.6 Government Interventions ....................................................................................... 89
4.4.7 Lesson Learned....................................................................................................... 89
4.5 Conclusions..................................................................................................................... 90
4.5.1 Comparative Analysis: KPEL-related RUL and Non-KPEL related RUL ................. 90
4.5.2 The role of government intervention........................................................................ 91
4.5.3 Sustainability of Activities ........................................................................................ 92
4.5.4 Overall Lesson Learned .......................................................................................... 93

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1. Introduction
In recent years, there has been a growing recognition that rural and urban areas have become
increasingly interconnected through a constant movement of people, goods, capital, ideas and
information. In view of this new reality, “urban” and “rural”, as concepts, seem to fall short to cover
the complex web of flows and exchanges that have made rural and urban areas dependent on
each other. The fact is that urban and rural areas are becoming increasingly integrated as a result
of better transport and communications, rural-urban and return migration, the dissemination of
urban norms and values in the rural areas, and the spread of urban economic activities in the rural
areas (rural industrialization) and of rural economic activities in the urban areas (urban agriculture).
This is blurring the distinction between urban and rural areas.1
Unfortunately, this recognition has rarely been reflected in the formulation of poverty reduction
policies and interventions. Urban development tends to concentrate on the development of the
urban areas and neglects both its impact and dependence on rural areas, while rural development
policies tends to focus on agriculture-related interventions and ignores the urban areas, as if rural
areas exist in isolation. A number of factors have reinforced this artificial separation. Under the
present economic climate, urban areas are generally recognized as engines of economic growth
and, therefore, the focus of most development policies. Furthermore, increasing urbanization has
brought attention to the need for addressing urban-based economic growth and the reduction of
urban poverty. Unfortunately, even this has focused on capital cities and large urban
agglomerations while the potential of small towns and secondary cities for economic growth,
reducing poverty and mitigating rural-urban migration from mega-cities has often been neglected.
Finally, even in those situations where attempts have been made to deal with urban and rural
areas as part of one system, efforts have been hampered by the administrative and sectoral
division of areas into urban and rural.
The need for approaches to poverty reduction that cover both urban (large and small) and rural
areas has also gained urgency on the face of increasing disparities in levels of income, economic
opportunities, and quality of life between these areas. A UN report on the level of MDGs
achievement in the region2 recognizes that there may be substantial variations within countries
which are hidden by the use of national average indicators. The report further indicates that, while
many countries are on track to meet some or all of the Millennium Development Goals, progress is
concentrated among the easier-to-reach urban populations and is less advanced in remote and
isolated rural areas.
Poverty reduction in rural and urban areas requires an integrated approach which, on the one
hand, provides rural population with access to urban opportunities such as urban markets for rural
products, urban services for rural population, and urban employment opportunities for rural
population. On the other hand, it is necessary to modify urban structures such as jobs and good
markets, and service provision and delivery to accommodate the specific needs of the rural
population. In other words, there is a need for strengthening rural-urban linkages in a number of
areas, particularly economic linkages (markets, employment) and physical linkages (infrastructure,
transport, communication). It should also be noted that linkages will be increasingly important in
open and globalizing economies. The starting point of this strengthening will be a planning
approach that covers small towns and surrounding rural areas
Rural-urban linkages take many different forms. In general, “rural-urban linkages” refers to the flow
of people (migration, commuting), (public and private) capital and goods (trade and in-kind family
support) between rural and urban areas. It is important to add to these three economic flows, the
flow of ideas, innovation and information and the environmental impact with urban areas have on
rural areas and (to a lesser degree) vice versa. This exchange between urban and rural areas can
be beneficial or detrimental to either or both areas.

1
Reducing Disparities: Balanced Development of Urban and Rural Areas and Regions within the Countries of Asia and the Pacific,
UNESCAP, 2001, ST/ESCAP/2110
2
A Future Within Reach, UNESCAP, 2005, ST/ESCAP/2376
Studies of rural-urban linkages indicate that the nature of the linkages differs from one place to
another and differs for different sectors in the same place. It is equally necessary to identify
successful practices that promote local rural and urban development and alleviate poverty, using
rural-urban linkages, and to build the capacity of rural and urban local governments to review,
adapt and replicate such practices.
In recent years, UNESCAP has undertaken a number of activities focusing on rural-urban linkages
as tool for poverty reduction. In 2001, it published the study entitled “Reducing Disparities:
Balanced Development of Urban and Rural Areas and Regions within the Countries of Asia and
the Pacific”. In 2002, it organized a workshop on “Poverty alleviation through rural-urban linkages:
The role of small and medium sized towns”. In late 2003, a project was started focusing on
“Poverty reduction through rural-urban linkages of secondary towns in Least Developed Countries”.
The present publication is part of this on-going project. It documents three cases where rural-urban
linkages have been the basis for successful poverty reduction interventions.
In each case a different approach was taken in order to meet the specific needs and conditions of
each location. This variety of methods, activities and processes may serve as “toolbox” for
development practitioners who want to tap into the potential of rural-urban linkages for poverty
reduction.
The rural-urban partnership programme (RUPP) from Nepal is a national level programme
involving 13 municipalities and 33 rural market centres. RUPP sees rural – urban linkages as a
fundamental element of regional development. The premise of a complementing rural and urban
development is based on strong and mutually supportive rural-urban interactions with urbanization
seen as an invisible force, transforming patterns and styles of living both in urban and surrounding
rural areas. Therefore, the development of urban centres is considered as an integrative approach
for exploiting potential resources and improving economic status of the people in the rural areas.
Entrepreneurship development, promotion of community based linkage economic enterprises and
rural labour linkage to industrial/commercial establishments are key components of the
programme.

The case of the Metro Naga Development Council (MNDC) from the Philippines illustrates a
successful attempt to overcome the obstacles presented by administrative division classification of
local government units as either urban or rural. The MNDC bypasses the rural-urban dichotomy by
bringing together Naga City and 14 surrounding municipalities into one administrative entity. The
MNDC has provided development mechanisms for its member local government units including (1)
cluster planning of the LGUs that has helped enhance and focus economic and development
plans; (2) resource pooling that has increased capacity of LGUs to improve in certain areas; and
(3) better access to opportunities for capability-building that has helped LGUs become more
efficient and effective.

Finally, two cases from Indonesia provide the opportunity to examine mechanisms for cluster
development and incorporation of small rural producers into international value chains. The
documentation describes the characteristics of the Partnership for Local Economic Development
(PLED) program implementation of a coffee economic cluster in Tanggamus District and the non-
PLED programme for terracotta pottery production in Kasongan Village. The documentation shows
the importance of partnerships (with private sector, government, other producers, etc.) not only to
facilitate capacity building and expansion of productive activities but, in the case of the
government, also as a mechanism for protecting small producers from exploitation.

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2. The rural-urban partnership programme (RUPP) – Nepal
2.1 Background

The landlocked and mountainous Kingdom of Nepal is located along the southern slopes of the
Himalayan mountain range between India and the Tibet Autonomous Region of China. The country
has a rugged terrain and topography of middle and high mountains in the north and a very fertile
land 'Tarai' in the south. The country is divided into five Development Region and 75 districts.

The latest global Human Development Report 2003 estimates the Human Poverty Index (HPI) for
Nepal at 41.9 with a rank of 70 out of 94 developing countries. The HPI value for Nepal ranked on
second highest position among South Asian countries, indicating a very poor situation. This
situation is attributable to the growth pattern of the country’s economy.

Table 2.1 Human Poverty Index in SAARC Countries

Name of Country HPI Rank HPI Value (%)
Bangladesh 72 42.6
Bhutan - -
Maldives 20 11.4
Nepal 70 41.9
Pakistan 65 40.2
Sri Lanka 34 18.3
India 53 33.1
Source: Human Development Report 2003, UNDP

Over the last fifteen years, Nepal's annual economic growth rate has averaged about five percent.
This growth has largely been derived from the non-agricultural sector, particularly from export of
garments, carpets and import based industries, which now contributes about 60 percent of GDP
compared to a mere 40 percent 15-20 years ago. However, the structure of employment has not
changed. About 80 percent of the Nepalese population still works in the agriculture sector.
Consequently, imbalanced growth in different sectors of the economy and subsequent regional
disparities has been intensified. This to a large extent has forced the movement of rural population
to the urban areas in search of economic opportunities and to access the basic services like health
and education. Thus, as in other developing countries, Nepal is also undergoing a process of rapid
urbanisation and it is becoming a major problem. In 1971, a mere 4.1 percent of the population
lived in urban areas, which has increased to 15.9 percent in 2001. If this trend continues, half of
the population of Nepal will be living in urban areas by the year 2035.

Income distribution has become far more uneven, with severe impacts on those whose livelihoods
depend on the natural resources. Poverty is overwhelming in both rural and urban areas of Nepal.
The government has estimated that 44 percent of rural households live below the poverty line,
while the figure for the urban areas is 23 percent. Although, the national economic indicators
divulge the transformation of economy's structure, the growth trend and nature indicate that more
efforts should be made for the balance growth and development of both rural and urban areas.

2.1.1 Spatial Analysis

RUPP has identified several market zones in the country taking municipalities as the nodal market
centres of the area. The Market Zones are identified mainly based on:

• Existence of direct flow including intensity of man, money and materials

• Existence of socio-economic linkages
• Linked with road network and transportation facilities and

3
 • Identification of localities or areas where people become indifferent on choosing either
market to undertake trading and/or marketing functions.

While the hinterland areas (Rural Market Centres) of a market zone are determined on the basis
where more than 50 percent population relied on concerned market zone for direct marketing
services, flow of people for acquiring socio-economic services and linkage potentialities.

The market zone encompasses diverse social and environmental conditions. Geographically,
market zones can be divided into three major physiographic regions based on terrain feature viz.
Tarai, Inner Tarai and Middle Hill range.
Table 2.2 Market Zones and RMCs by Location, Population and Size Base
Density
S Market Zone/ Physical Area
HH Pop. per Coverage VDC/RMCs
N Municipalities Location sq.km
sq.km
1 Nepalgunj Tarai 10592 57535 12.52 4599.12 Khajura, Betahani,
Birendranagar Mid Hill 7139 31381 34.95 897.88 Kohalpur
Tulsipur Mid Hill 7056 33876 92.22 367.34 Chhinchu,
Tribhuvannagar Mid Hill 8945 43126 74.45 579.26 Babiyachour
Bijauri, Narayanpur
Lamahi, Bhalubang
2 Bharatpur Inner Terai 19922 89323 162.16 550.83 Gitanagar, Rajhar
Hetauda Inner Terai 14271 68482 47.77 1433.58 Gadi, Bhimphedi,
Tansen Mid Hill 4813 20431 21.72 940.65 Handikhola
Butwal Inner Terai 16281 75384 69.28 1088.11 Aryabhanjyang,
Harthok
Pokhara Mid Hill 37305 156312 55.22 2830.71 Kotihawa, Khaireni,
Murgiya, Pharsatikar,
Byass Mid Hill 6511 28245 60.02 470.59 Saljhandi
Lekhnath Mid Hill 9362 41369 77.45 534.14 Bharatpokhari,
Prithivinarayan Mid Hill 5588 25783 60.28 427.72 Dulegaunda,
Ratnanagar Inner Terai 7456 37791 35.62 1060.95 Naudanda, Jogmadi
Jamune, Keshavtar,
Sishaghat
3 Biratnagar Terai 33678 166674 58.48 2850.10 Jante, Katahari,
Dhankuta Mid Hill 4789 20668 48.21 428.71 Rangeli
Itahari Terai 8624 41210 42.37 972.62 Manglung, Sindhuwa
Inarwa Terai 4497 23200 22.36 1037.57
Source: CBS, HMG/Nepal.

2.1.2 Physical Infrastructure

Road Accessibility:
Different Highways of the country link all the market zones, which facilitate the horizontal
movements. For example, East-West Highway links all the urban areas located in the Terai area.
Some highways like Ratna Highway, Karnali Highway, and Sidhartha Highway facilitate vertical
linkages. Similarly, there are district roads like Biratnagar- Dhankuta road, which vertically links the
mid-hills areas of certain market zones to Tarai (North-South). There are some feeder roads that
are either gravelled or asphalt tracks or seasonal roads in all the market zones that greatly
facilitate the horizontal flows including the flows from RMCs to urban areas. Likewise, there are
certain roads that link the RMCs and/or hinterland areas of the municipalities - Narayangarh-
Mugling road and Prithivi Highway and Dhankuta-Therathum road.

Road network facility within the municipalities is very good in the Tarai and valley and good in the
Hill municipalities. Most of the municipal wards and settlements come under the municipality road
network system in the Tarai municipalities but it is limited within the market areas and periphery in
the Hills as well as in rural nature municipalities.

Transportation Facility:

4
Types of transportations available in all the market zones are air transport (in six municipalities),
people carrier (bus, car, jeep, van, microbus, rickshaw), goods carrier (Truck, Tanker, medium
transport, man/animal pulling cart) and other small transports.

Transportation facilities are reasonably sufficient in bigger urban centres like Biratnagar, Nepalgunj
and Pokhara and the market zones connected by Highways and district roads. There the
transportation linkages between the municipalities are quite sufficient and also for linking
municipality with surrounding rural market centres. The frequency of services and number of
transportation facilities are also large there. However, some market zones falling within the Hill
areas have limited transportation services to link the urban areas with rural areas e.g. in Pokhara,
Tansen, Dhankuta and Birendranagar.

River System:
Many of the market zones have major river system and their tributaries that function for drainage
like Seti River and its tributaries in Pokhara, Naryani River and its tributaries in Bharatpur, etc.
Some urban areas do not fall in major river system like Birendranagar and Tansen but the streams
and rivulets there are sufficient to drain the rain water as well as the water discharged by the
households. Even the rural market centres have access to such major river system. The Nepalgunj
market zone also has major river system like Rapti and other tributaries but the Nepalgunj city
faces shiver drainage problem due to very low contour of the whole city.

Table 2.3 Drainage System within the Programme Area

S.N. Name of Municipality Major River Tributaries
1 Dhankuta Tamor
2 Biratnagar Koshi Kesaliya and Sinhiya
3 Hetauda Rapti Karra
4 Bharatpur Rapti, Narayani Khageri
5 Butwal Tinahu Danab, Rajapur and Chidiya
6 Tansen Holangdi and Chanaute
7 Byas Madi and Seti Buldi, Falesti and Sato
8 Pokhara Seti Thamdi, Furse and Kali
9 Tulsipur Babai Patu, Ranighat, Gahate and Bhamake
10 Tribhuwannagar Babai Katuwa, Hapur, Gurje and Sewar
11 Nepalgunj - -
12 Birendranagar Bheri Itram, Neware, Khahare, Amkholi and
Kharkholi
Source: Rural Urban Partnership Program

2.1.3 Communications

Communication facilities in the entire Program areas are good. All types of communication facilities
(Telephone, Fax, Government post offices, private postal services, internet/email) are available.
These facilities link the municipalities with each other and with surrounding rural market centres.
Few remote and/Hill rural market centres cannot access email and Internet facilities due to
conventional telephone system.

2.1.4 Environment

Drainage Facilities:
There are mainly three types of drainage facilities in all the market zones: 1) Systematic drain: it is
large in size with drain cover. Household sewerage also could join into this system; 2) Drain with
slab: it is medium types of drain and households wastewater flow from this drain. This drain is
joined to the systematic drain; and 3) Surface drain: It is not permanent and is open. Rainwater
flows from open drain.

5
Drainage facilities in the municipalities and rural market centres are concentrated within the urban
core area and some are extended to periphery and residential areas. The density of the drainage is
low in the outer areas of the municipality. Drainage facilities are different in big/urban nature
municipality and small/rural nature municipality. Situation of the municipality located in the Tarai
have more drainage facility than in the Hilly municipalities. But the Hilly municipalities have better
drainage than Tarai municipalities due to the slope of the land and availability of river to discharge
the drain. In the case of rural market centres, only some have drainage facilities.

Water Resources:
Main source of water is ground water in the valley and Tarai market zones for both the household
and industrial uses including for irrigation. Rivers, lakes and stream are the main water sources in
the Hilly market zone. In some market zone like Pokhara and Nepalgunj water resources are used
for recreational purposes while in Bharatpur efforts are being directed towards using waterways
transportation.

Land Use Pattern:

There is not much difference in the land use pattern in all the market zones. The predominant land
use type is agriculture. Even in the large municipalities like Pokhara, Biratnagar and Nepalgunj,
land use for agriculture is dominant. As a result ‘urban-agriculture’ carries special significance in all
market zones. Second dominant land use is human settlement followed by open land,
forest/bushes and water body. In the rural market centres and some market zone like Dhankuta,
Tansen, Birendranagar, etc. the primary land use type is agriculture followed by forest and bushes,
open land and human settlement.

Solid Waste Management:

Solid waste management is one of the biggest challenges of urban areas of Nepal. Municipalities
and rural market centres do not have systematic mechanisms for solid waste management so the
situation of solid waste management is not good. There is lack of systematic dumping sites in all
the market zones and as a result the collected solid wastes are dumped haphazardly in the
riverbed, open land, in the forest and often are burnt. A significant amount of municipal budget and
human resources are used for this purpose but due to lack of trained and capable manpower, lack
of proper landfill sites and lack of proper coordination between local authorities and citizen the solid
waste management problem has remained unresolved. In some market zones like Butwal,
Bharatpur and Hetauda efforts are being directed towards recycling of the solid waste but without
much success. In Biratnagar a private sector company is being mobilised for urban solid waste
management. The private sector collects the solid waste from the main core city area (only) and
dumps in the systematic dumping site, recycle them and produce organic fertilizer.

2.1.5 Settlement System

Settlement Pattern:
Settlement pattern is different in the Tarai, valley and Hill areas of the market zones based on the
availability of physical facilities and socio-economic and cultural factors. In the Tarai and, to a great
extent, in the valley as well the settlement pattern is compact and clustered while in the Hill areas it
is scattered. When one looks at a specific market zone, it could be generalized as: settlement
pattern is compact as well as linear in the urban core area, linear and agglomeration in the
periphery and linear and dispersed in rural market centres.

6
2.1.6 Social Profile

Health:
All market zones have hospitals and health service facilities of different standards. Hospitals in the
urban areas are relatively well equipped and provide good health services. Some market zones are
equipped with specialised health services due to the existence of Medical colleges and specialised
hospitals like B.P Memorial Cancer Hospital and Medical College in Bharatpur, B.P Memorial
Hospital of Dharan and Eye Hospitals. At other market zones, some health related bi-lateral
projects like INF, Safer Motherhood program, Amda Nepal, British Nepal Medical Trust, UMN
hospitals are providing health care facilities to the people. In the rural areas of the market zones,
limited health services are available through the health post and sub-post. The distribution of
health facilities within a market zone clearly indicates that the people in the rural areas are
depended on the urban health services creating a major factor for the flow of people from rural to
urban areas.

Education:
There are differences in the magnitude of available education services in different market zones. A
large number of nurseries, pre-primary and primary levels of education facilities are even available
in the rural areas, especially along the highways, but the quality of education is very poor. Each
zone has Campuses and all level of schools both run by the government and the private sector.
Academic and training institutions for computer, technical and vocational education, medical
colleges are also growing, particularly with the involvement of private sector, but all these are
mostly concentrated in the urban areas. Some municipalities are gradually developing as
educational centres servicing the whole market zone and larger area. Thus, the people of the rural
areas either commute daily or temporarily migrate to the urban areas for higher or specialised or
quality education. On the other hand, establishment of certain specialised educational institutions
in the rural areas like the Medical College at Kohalpur and Bharatpur, Agricultural Campus in
Bharatpur, Mahendra Sanskrit University, Dang, have initiated the reversal flow of people from
urban to rural area. But this trend is still very insignificant.

Public and Social Amenities:

Public and social amenities such as Bus Terminals, Public Garden, Park, Libraries, Pond Park,
Children Park, Public Toilets etc. are available in all the market zones but at a minimum level.
However, some of these are not functioning well due to poor management of local authority.
Therefore, the private sector and the community organisations are being increasingly involved in
their management in all market zones. For example, Hetauda municipality has handed over the
management of a public toilet, a library, a garden park and a view tower to the Tole/Lane
Organisation (a local community institution). Likewise, Nepalgunj municipality has maintained a
public pond in joint collaboration with private sector. Municipalities in other market zones also have
taken some initiatives to hand over the public constructions as well as management of public and
social amenities to the TLOs.

Sanitation:
Solid waste and sewage system is a major problem in the urban areas of all the market zones. In
RMCs, the problem has not been serious. The municipalities have begun to mobilize TLOs to
manage the problem. For example, Tribhuvannagar municipality has managed a drainage system
by mobilizing the people and resources through TLOs and Bharatpur, Hetauda, Biratnagar
municipalities are using TLOs for effective management of solid waste. Hetauda has declared itself
a plastic free zone with TLO support. Birendranagar, Nepalgunj, Tulsipur and Hetauda
municipalities are implementing greenery town programmes by tree plantation. Likewise, TLOs of
Tulsipur municipality are managing a slaughterhouse cum meat selling stalls to maintain the urban
environment clean and healthy.

7
Community Institutions:
There are large numbers of community-based institutions in all the market zones. A total number of
2662 TLOs have been formed in RUPP implementing MZs including in the rural areas. TLOs are
the grass root level institution and are responsible for formulating, implementing and maintaining
plans and programs, which have become an indispensable part of the municipality and VDC's
overall development. Similarly, a large number of NGOs are working in different sector in all the
market zones. Likewise, numbers of milk producers’ cooperative, savings and credit cooperatives
are functioning in almost all the market zone.

2.1.7 Economic Profile

Main Economic Activities:

People living in the urban core areas, where the settlements are large and compact, undertake
commercial activities like wholesaling and retailing of goods and services. Traditionally also, such
market centres have been serving as a trade junction to corresponding rural and hinterland areas.
However, many settlements inside the municipalities are small and scattered and carry rural
characters in terms of economic activities like agricultural production and livestock rising. At the
same time industrial activities are also emerging in those areas. Due to rapid urbanisation the
agricultural land of such areas is gradually converting into the residential areas and also for the
establishment of new businesses and/or industry. As such, a distinctly visible real-estate
commercial activities and ‘urban agriculture’ have emerged in all the municipalities. There is also
Industrial Estate in many of the market zone, which provides employment opportunities to the local
people as well as to the people living in the hinterland areas. On the average more than 23 percent
of the urban populace has been involved in commercial activities/enterprises, 60 percent in
agriculture and the rest in service and other.

All rural settlements are basically agriculture based. Connectivity with road links has facilitated
rural settlements to involve in off-farm activities. With the development of highways and link roads,
many small markets have gained importance. Commercial activities including agro-processing and
other industries are the major economic activities in such small towns along the roadside. These
towns also have become the new gateways to serve the hinterland.

Farm and Off-Farm Activities:

More than 60 percent of the population in the market zones depends upon agriculture for their
livelihood. In the hinterland areas most people with small land holdings are involved in agriculture
wage labour during farming seasons. There is some opportunity for non-farm employment in the
urban areas generated by certain sectors like education, tourism and urban services. The industrial
employment opportunities are very limited except in certain market zones like Biratnagar, Butwal,
Pokhara, Hetauda and Bharatpur.

Production System:
Paddy, maize, wheat and millets still are the major crops grown in all the market zones. Paddy and
wheat are grown as principal crops in the Terai area and maize and millet in the Hill. Livestock
rising is an integral part of the household economy and farming system in all the market zones.
Some specialised production pockets of fresh vegetables and fruits and poultry farming are located
along the main road corridors. Similarly, seri-culture and bee keeping in Bharatpur market zone,
certain cash crops like sugarcane in Biratnagar and cotton in Nepalgunj, citrus fruits in Pokhara
and Byass, coffee in Tansen market zones are certain specialised production activities undertaken
there. Besides, the traditional production system of ‘subsistence’ nature is slowly changing towards
market oriented production system – production targeting to market opportunities particularly the
urban demand. For example the non-conventional products like floriculture, vegetable seeds, etc.

Marketing Opportunities:
The urban centres in all the MZs play a vital role in serving as a major market centre not only for
goods produced in the hinterland rural areas but as a source of supply of daily necessities and

8
inputs supply (like fertiliser, seeds, technology, services) to its hinterland areas. Beside these,
substantial demand for marketing services has emerged due to changing production system. For
example, the demand for cold storage and transportation services for fruits and vegetables,
processing for products like cotton, coffee, honey and sericulture and packaging for floriculture.
The changing food habits towards processed foods have generated a new set of marketing
opportunities in many market zones, especially in Pokhara, Butwal, etc. Similarly, market
opportunities have increased due to facilitating factors for ‘import substitution’. For example, the
increased production of fruits and vegetables has created marketing opportunities to substitute
their imports from the bordering Indian markets. In the hills, markets are fragmented or isolated
due to difficult accessibility providing ample marketing opportunities even within a short distance or
in a very ‘localised’ manner.

Another opportunity for marketing occurs in fairs and exhibitions held in the market zones, which
usually combine social, economic and cultural functions at specific locations. Likewise, door-to-
door selling of many commodities also can be noticed in many areas.

Economic Linkage Pattern:

Flow of goods still dominates the linkages within the market zone and among the market zones.
However, due to above mentioned factors and emerging nature of economic activity the economic
linkages are changing. First, the contents in the flow of goods have been diversified from traditional
goods of daily necessities to processed foods and many new products. Secondly, the nature of
linkages has expanded from goods to services and capital. For example, in many market zones a
large amount of services like agriculture extension and veterinary are being provided from urban
areas to hinterland areas. Similarly, flow of capital in the form of credit and savings could be
noticed in market zones like Pokhara and Bharatpur. Lastly, due to the improvements in road
network the traditionally established north-south economic linkages are diverting to east-west
directions. Thus the contents, nature and direction of economic linkages are under going changes
in all the market zones.

2.1.8 Demographic Profile

Population Distribution and Movement:

Population distribution in the Programme areas follows the national distribution – more people live
in Terai than in the mid Hills and least in the Mountain areas. Size of population living in Tarai
market zones is larger than in inner Tarai zones like Tulsipur and Tribhuvannagar while the size of
population in the Hill market zones like Tansen and Dhankuta are very small. In some market
zones like Biratnagar, Pokhara and Nepalgunj, major portion of the population is living in the core
urban areas while in many market zones population living in the urban fringe areas is larger. In all
the market zones there are mainly three types of population: i) permanently settled, ii) daily
commuters from rural to urban and ii) migrants. The number of daily commuters could be found in
all the market zones but in varying magnitude. Numbers of such commuting people are high in the
‘industrial’ market zones like Biratnagar, Hetauda and Butwal and very small in the hill market
zones like Birendranagar, Tansen and Dhankuta. The population growth rate in the urban areas is
much higher than the national average indicating the flow due to migration. Following chart depicts
the rate of migration in the RUPP implementing municipality.

9
 Figure 2.1
Average Population Growth Rate in Percentage
12 11
9.7
10
7.95 8.18

Percentage
8 7
6.15 6.3 6.4
5.7 5.64
6

3.1 2.9
4

Byass
Butwal
Bire'nagar

Bi'nagar
Nep'gunj

Hetauda

Tansen
Tul'pur

Tri'nagar

Bha'pur

Pokhara

Dha'kuta
Municipalities

Source: Nepal IDP Research Initiative Findings Report 2003

Migration Pattern:
Migration of people from rural to urban areas is heavy in all the market zones and for the country
as whole. In 1971 a mere 4.1 percent of the country’s population lived in urban areas which had
increased to 15.9 percent by 2001. If this trend continues half of the population of Nepal will be
living in urban areas by the year 2035.

A very distinctly visible migration pattern is from the Hill market zone to Tarai market zones.
Movement from the Hills (north) consistently occurred largely in response to better opportunities
and urban services in the Tarai (south) urban and its hinterland areas. Some of the towns in Tarai
are developed exclusively by immigrant population like Ratnanager, Bharatpur and Itahari.
Besides, seasonal migration from Hills to Terai for earnings is also found as a common way of life.
The majority of migrants are of working wage group – 87 percent of the migrants are of up to 49
years. The proportion of female in the migrant population is larger than the male for all age groups
except above 50 years of age. Migrant types by age and gender are depicted in the following
graph:
Figure 2.2
Migrant Types by Age & Gender
53
60
50 55
47
Percentage

40 51
30 36
20
10
13

0-15 16-49 Above 50

Total Percentage
Age Group & Gender Female Percentage

Source: Nepal IDP Research Initiative Findings Report 2003

Flow of People:
Flow of people across the market towns and villages in the market zones is rising constantly due to
two main factors. Firstly, for accessing all kinds of urban services including the administrative
services and social visits. Secondly, the improvement in the transportation networks. These have
maintained strong socio-economic ties and relation across the market zone.

Internally Displaced People:

The current armed conflict has resulted in influx of Internally Displaced People (IDP) in many of the
market zones particularly into the municipal areas. As a result, the municipalities, especially

10
Tansen, Nepalgunj, Birendranagar, Tulsipur and Tribhuvannagar, are facing the problems of
deteriorating urban service deliveries, unsecured livelihoods and substantial rise in urban poverty.
Failing to address these problems timely may create a threat to social peace and harmony in the
urban community. The overall situation has put immense pressure on the municipalities to enhance
urban service delivery and to address the issues of immigration, settlements and peace and order.
The following pie chart shows the reasons for displacement.

Figure 2.3
Reasons for Displacement of Population
Others Business
9% 3%

Security
24%
Education
38%

Work
14% Services
12%

Source: Nepal IDP Research Initiative Findings Report 2003

Flow of Labour:
Movement of labour from rural to urban market centres are common occurrence in all the market
zones. The main purpose is to seek daily wage works. Besides, a large number of labour
movements occur between the market zones seasonally during the lean farming season and winter
season. For example, people from the Hill market zones moves to Tarai market zones during the
winter season. Similarly, the rural farmers who can not afford to live within the farm for the whole
year moves to other market zones where short period employment opportunities are available –
either in farm or in urban areas for construction works. The movement of occupational labour like
blacksmith, cobbler and tailors is very traditional but their movement is very much limited within the
market zone.
Also, a large proportion of population temporarily moving out of their settlements goes to India.
Similarly, a large number of labour force from India moves into the different market zones in Nepal
for the same reasons. In some market zones like Biratnagar, Nepalgunj and Butwal the inflow of
labour from India could be distinctly noticed all year round. In some instances the Indian labourers
are more efficient than their Nepali counterpart, particularly in the construction works and
specialised services like plumbing and electrical works.

2.2 Development context

If development is interpreted as anticipated change in a situation over time then there are only two
ways for most of the poor to experience development. First, becoming a beneficiary of the
development activities being implemented in the country – health, education, security, agriculture,
etc. Such development programmes are always criticized for not reaching to the poor or the ‘target
group’. Second, becoming a doer to bring changes into its own economy. Insufficient
empowerment and the resultant lack of “access” to resources are considered as hindrances to
achieve this. Empowerment of the poor thus becomes the main challenge for development. There
are innumerable approaches to empower the poor but RUPP experiences have revealed that one
initiated based on the fundamental characteristic of the poor proves effective.

Nepal is an agricultural country, where 86 percent of the population lives in the rural areas and
more than 38 percent of the population live below the poverty line. Analysis of rural household
economy in Nepal indicates that only 40 percent of the income of an average rural household

11
comes from farming and the remaining 60 percent from other income sources (Statistical Pocket
Book, Nepal, CBS 2002). Similarly, more than 60 percent of the households owns and cultivate
less than one ha. of land (Nepal Sample Census of Agriculture, CBS 1993) which at most provide
survival source for less than six months of a year. Evidently, most of them need to access other
sources of income to survive which could only be generated through rural-urban interaction – flow
of goods, services and people and rural and urban institutions structuring such flow.

The recent rapid urbanisation trends with 6.4 per cent population growth, raised urban population
to 14 percent in 2001 in Nepal. Number of medium sized towns are rapidly growing along the
Highways, feeder roads and district roads (East-West Highway, North-South Highway); and
sporadic growth of small towns and settlements all over the country are few of the situational
evidences of rural poor adopting the rural-urban interaction as their survival strategy. Under such
situation development efforts need to be directed towards (a) strengthening rural-urban linkages,
(b) empowering the poor so that they can access the socio-economic development opportunities
and potentials emanating from linkages, and (c) constituting an appropriate institutional mechanism
that enables them to cope with the risk inherent in the rural-urban interactions and reduce their
vulnerability. Thus, empowerment of most of the rural poor in Nepal is very much dependent on the
strengthening of rural-urban linkages and interactions.

Poverty has always been an overriding concern of development efforts and remained the main
development objective. Government has clearly stated that Nepal is caught up in a vicious cycle of
poverty and economic stagnation - at present providing a fertile ground for disorder. Poverty
alleviation was explicitly stated as a development objective from the Eighth Five Year Plan (1992-
97). The consecutive Five Years Plans have further refined the strategies and programmes
components to address the poverty issues more effectively. In that process the Ninth Plan
recognized RUPP as an effective tool for poverty reduction, urban development and governance,
and found its strategies and operational modalities appropriate for Nepal. Thus, government
selected RUPP as a national core programme, and RUPP approach of poverty alleviation and
urban development has been incorporated into the Tenth Plan (2003-2008) of the country. In the
Tenth Plan, Government has taken on the challenge of poverty reduction and shown its
commitment to achieve a remarkable and sustainable reduction in poverty level from 38 percent of
the population at the beginning of the Plan period to 30 percent by the end of the Tenth Plan.

RUPP was initiated to address poverty alleviation from such perspectives and was made urban
based for obvious reasons, e.g. ‘urban centres including small and medium sized towns and
settlements functions as ‘growth centres’ and fits best with the survival strategy of majority of the
poor in Nepal.

2.2.1 Main development issues

Imbalanced Growth:
Imbalance economic growth of rural and urban areas has been widening the gap between rural
and urban poverty. Economic disparity (as reflected by human development and poverty indices)
exists not only between rural and urban but also between Mountain (less urbanised and
developed), Hills and Terai (more urbanised and developed). Also, it exists between Eastern (more
developed), Central (most developed and urbanised), Western, Mid-western and Far western
regions (least developed).

12
 Table 2.4 Major Development Index, Year 2000 - Nepal
HDI HPI
Nepal 0.466 39.2
Sector
Rural 0.446 41.4
Urban 0.616 23.9
Ecological belt
Mountain 0.378 46.1
Hill 0.510 37.2
Tarai 0.474 40.2
Development Region
Eastern 0.484 42.0
Central 0.493 40.7
Western 0.479 39.9
Mid-western 0.402 43.4
Far-western 0.385 45.3
Note: HDI = Human Development Index; HPI = Human Poverty Index
Source: UNDP

It is generally stated that unequal economic distribution has drastically increased during the last
decade. And the disparity in income distribution is greater in the more developed region – Central
region – than in less developed region like Far-Western Development region. Similarly, the income
disparity in the Terai (which is comparatively richer) is greater than in other ecological regions like
Mountain (poor region). Some specific indicators of development like life expectancy and literacy
also shows the imbalance growth between rural and urban areas. The per capita income is almost
twice in urban as compared to the rural where as the per capita income is the lowest in the
Mountain.
Table 2.5 Some Indicators of Development - NEPAL
Life Literacy Per capita
Expectancy Income (PPP$)
(Years)
Nepal 59.5 50.70 1237
Rural 58.7 48.00 1094
Urban 71.1 69.00 2133
Mountain 49.8 44.50 898
Hill 65.1 55.50 1262
Tarai 62.4 46.80 1267
Source: Nepal Human Development Report 2001

Rural economy is mostly based on agricultural activities whereas non-agricultural activities are
concentrated in urban areas. Similarly, basic services like education, health, employment and new
technologies are urban centralized. RUPP is directed towards contributing to reduce such
disparities, particularly the rural/urban and Hill/Tarai.

Widespread Poverty:
Poverty is recognized as a deep rooted and complex phenomenon in Nepal. Due to wide
disparities in income distribution, social and economic infrastructure development and employment
opportunities, the poverty problem is becoming more complex throughout the country. Poverty is
intense in rural areas; however, urban poverty is fast increasing because of the rapid urbanization.

Among the people residing in the rural area 44 percent of them fall below the poverty line whereas
it is 23 percent in urban areas. Geographically, the proportion of people living below poverty line is
about 56 percent in Mountain, 42 percent in Tarai and 41 percent in the Hills.

13
 Table 2.6 Poverty in Nepal
(Income NRs. 4,404 per person per year)
Number of People under poverty line
Description
Ecological Zone:
- Mountain 0.56
- Hill 0.41
- Tarai 0.42
Rural & Urban Area:
- Urban 0.23
- Rural 0.44
National Average 0.42
Source: NPC 1998/WB 1999

According to a World Bank report, poverty in Nepal increased during the decade 1984/85-1994/95.
Poverty in the Kathmandu valley and other towns of hill areas decreased but it has increased in the
urban areas of the Terai. In general, poverty has increased in the rural areas of the Western, Mid-
western, Far Western regions and in the hills of the Eastern region. However, poverty has
decreased in the East, Mid-Tarai and Mid-hills. Poverty is increasing by 3 percent and the people
living under poverty line have doubled in the past 20 years (Nepal Human Development Report
1998).

Rapid Urbanization:
Natural population growth, poor infrastructure link, insecurity and lack of employment opportunity in
rural areas, subsistence agriculture forcing people to seek additional income sources for survival,
changing farm production system that demand for more urban services, urban export based
national economic activities like carpets, garments and curios, and remittances becoming the
major source of foreign exchange earnings have played a crucial role in rural to urban migration
and rapid growth of small towns in Nepal. Besides, rural people migrate to urban areas in search of
better livelihood. As a result, the trend of urbanisation is rapidly increasing. All these have not only
created pressure on existing urban areas but many new small towns have emerged mostly along
the Highways and district roads.3 Rapid urbanization has created many urban ‘issues’ which are
increasingly becoming unmanageable. But the Municipalities with limited financial and
management capacities are facing problems to manage its areas resulting into physical, social and
economic disharmonies. The haphazard growth of the urban areas not only destroying the
aesthetic value of a urban centre but is also devoid of proper facilities to cater the needs of the
urban dwellers as well as of the rural areas.

Table 2.7 Urbanization Trend in Nepal

Year No.of Total Urban Total Urban Urban
Urban Population Population Population Population Population
Areas Growth Growth (%)
Rate (%) Rate (%)
1952 10 8,256,625 238,275 - - 2.89
1961 16 9,412,996 336,222 1.56 4.6 3.57
1971 16 11,555,983 461,938 2.28 3.7 4.00
1981 23 15,022,839 956,721 3.00 10.7 6.37
1991 33 18,491,097 1,695,719 2.31 7.7 9.17
2001 58 22,736,934 3,227,879 2.30 9.0 14.20
Source: CBS Census Report

Insufficient Urban Service Delivery:

Rapid urbanization has created pressure on urban services and facilities like water, health,
sanitation, drainage, housing, etc. and creating traffic congestions and environmental pollution.
The supply of urban services is lagging behind its demand. The resource poor and ‘not well
managed’ municipal governance is loosing incomes while the citizens are not getting those
services. There are great potentials in the private sector since it can provide such services more

3
HMG/Nepal plans to increase the number of municipalities from 58 to around 96 in the country.

14
efficiently and economically than the municipal government which needs to be mobilized. Similarly,
the community themselves are also willing and can be made capable to manage those facilities for
their own benefits and for all.

Lack of Information on Rural Demand for Urban Services

Urban areas are unaware of the nature and components of rural needs/demand for urban services
and institutions that can facilitate rural economy in terms of increased socio-economic transactions
due to the lack of information. Often the national statistics do not or cannot reflect such local
needs. For example, the rural areas within a market zone may be requiring ‘coffee processing
facilities’ due to increasing production of coffee beans there but the urban areas may be unaware
of such opportunity. A very conventional example is the livestock productions like goat raising and
poultry birds in the rural areas in a very scattered way but corresponding required institutional
mechanism and services to channel those products into the urban areas will be lacking.
Information on rural needs of agricultural inputs such as fertilizer, pesticides, high yielding varieties,
new /appropriate technology and extension services required to diversify and/or enhance
agricultural production often are not available to the service providers in the urban areas.

Lack of Information on Urban Demand

Similarly, the information on urban demand for rural products and services are also not available to
the rural people which are crucial for them to take production-planning decision. As a result, a
mismatch between the demand for and supply of rural products and services generally occurs and
are always detrimental to the rural areas. Farmers throwing their milk in the stream or selling the
products at throwaway prices or feeding their cabbage to the animals, etc. happens at the loss to
the farmers. This is one of the important reasons for the failure of many rural production
programmes in Nepal.

Poor Urban Service Delivery to Rural Areas

Lack of information as mentioned above is one of the reasons for underdevelopment of required
urban services for the rural areas. But even within the existing system of rural urban interactions
the infrastructures and institutional mechanisms in the urban areas are either non-existence or
insufficient to cater the needs of the rural areas. Infrastructures that directly affect the accessibility
to/from rural areas from/to urban areas like roads, link bridges, culverts, transportation facilities,
etc. are lacking or poorly maintained. Flow of goods and services between urban and rural areas
take place in a particular hierarchical market places such as collection centres, assembling
markets and/or periodic markets (Hatt Bazaar) or regular markets (Gudri Bazaar), wholesale and
retail markets. Such markets often are insufficient and in many places, non-existent. Beside,
appropriate institutional mechanism like the assemblers/collectors, commission agents,
wholesalers, transport companies, etc. even in the existing markets are not properly developed or
established. On the other hand, the existing institutional mechanism is often blamed for being
‘exploitative’ to the farmers. The involvement and/or mobilisation of the private sector to address
these institutional issues still are far from adequate while there are much potential to do so.

Lack of synergy among local governments

Local governments are not giving due emphasis to the importance of the rural - urban linkages that
could help improve local economic development both in the rural and urban areas. In general, the
programme activities needed to strengthen the rural-urban linkages extend beyond the territorial
jurisdiction of one local government institution. Concerted efforts among the local government
institutions – VDC, Municipality and DDC are required. But coordination at such cross-jurisdictional
level is very weak. They need to improve the planning process, establish effective coordination
among themselves, mobilize local resources and ensure people's participation. Coordination
between DDC/VDC and municipality is important to explore the economic potential and opportunity
provided by the urban demand for rural products. The role of urban areas should not be over
looked for rural economic development and at the same time it should also be recognized that the
urban development could not be achieved in isolation. Development efforts at rural and urban
areas need to be made complementary to each other.

15
Weak Community Participation
Community participation is weak in development activities in Nepal. The concept of people's
participation in Nepalese context has not been formally crystallized. In general, it still denotes
merely the mobilization of voluntary contribution for development activities at local level. People of
the rural and urban areas are not much aware about the importance of the rural-urban linkage.
Therefore, well-established community mobilisation process is needed to mobilise local resources
and community participation for development that could strengthen rural-urban linkages.
Community empowerment is crucial for the people's participation in planning, implementation,
monitoring and evaluation of the development activities.

2.3 Focus of rural-urban partnership programme

The focus of RUPP interventions are directed towards addressing development problems and
guided by the lessons learnt from the past development efforts in the country. While doing so,
RUPP has taken a long term sustainable approach so that the Programme approach and
strategies are continued even after its termination. As a result, the intervention activities are
formulated to develop, establish and strengthen institutions and their operational mechanism such
that they impact on the good urban governance to help reduce poverty and empower the poor and
disadvantaged groups in the society. All these are implemented in a way to achieve local
development based on the local potentials and opportunities generated by the existing and
potential rural-urban linkages.

2.3.1 The Basic Premise:

The social and economic interactions emerging from the process of urbanisation can be optimally
used to stimulate growth of both the urban and its rural hinterland areas. Therefore, the
urbanisation process should be addressed as a ‘rural to urban continuum’ and in terms of its
spatial, functional and institutional dimensions. The theoretical axiom for such experience is
manifested in the premises of Central Place Theory, namely, that hierarchically ordered and
integrated systems of settlements provide the rational and efficient spatial systems for the
organisation of population and their functional relationship. Urban development is linked to the
advantages of rural market centres and development of rural market centres is linked to the growth
of strong rural economies. Forward and backward linkages of rural and urban economies should
be adopted as the guidepost for the urban development.

Thus, the Programme has been conceptualised as “Urban Based Local Development Through
Rural – Urban Linkages”. It is also based on the stipulations that urban and rural development
should not be perceived in isolation. Urban development should encompass the development of
economic and social level of awareness, technical infrastructures and institutions for rural-urban
interactions. Sustainable urban development needs proper mobilization of human, economic,
social and financial resources at local level. And this is achievable only with good governance. Use
of information technology is essential for good governance and poverty alleviation; and local
peoples’ participation and the partnership with private sector is required for rural-urban
interactions.

16
 Relative position of village and markets in the urban hierarchy

Metropolis/Capital city

Municipality/Regional
city/High order centre

Secondary city/Intermediate city/Medium

size town

Small town/ Low

order centre

Rural market
centre/service
centre

Village

2.3.2 Basic Strategies:

The rural and urban areas are two faces of the development coin. Rural – urban linkage is a
fundamental element of regional development. The premise of a complementing rural and urban
development lies in strong and mutually supportive rural-urban interactions. And urbanization is
seen as an invisible force, transforming patterns and styles of living both in urban and surrounding
rural areas. Therefore, the development of urban centres should be envisaged as an integrative
approach for exploiting potential resources and improving economic status of the people in the
rural areas. Entrepreneurship development, promotion of community based linkage economic
enterprises (LEs) and Rural Labour Linkage (RLL) are important for strengthening rural urban
linkages.

2.3.3 Operational Strategies:

In supporting its basic premises and strategies, the Programme has adopted four innovative
operational strategies.

Management and Policy Support: Development of appropriate information system and their
dissemination and uses (communication) by the local government and human resource
development are the keys to improve their management system and for appropriate policy
formulation. The focus of this intervention is to enhance the capacity of the local government so
that they can plan and implement programme activities for (a) the development of well-articulated
network of urban centres, rural market centres and villages for linking their production and
consumption systems; and (b) creating conditions for better urban governance for better delivery of
services to strengthen the linkages among that network. Besides, the information is required for the
effective implementation of the Programme activities.

Development of Decentralised Community based Social and Economic Institutions: Formation and
strengthening of the community based multi-purpose grass root institution to undertake social and
economic development initiatives including community based economic linkage enterprises that

17
undertake direct rural-urban linkage interactions is the guiding principles of RUPP interventions.
Social capital formation and empowerment of the community through the urban community
mobilisation process is the entry point while human resource development, credit and seed grant
are provided to/through such community institution for implementing their socio-economic
development plans and programmes. A Municipal Development Fund (MDF) is established in the
municipality to sustain the Programme activities.

RUPP Concept and Operational Strategy

Management and
Policy Support Credit/Seed Grant &
Information System &
Municipal
Communication
Development Fund

Industry/Commerce Urban Based Local

Development Community-based
Linkages with Rural
Through Rural-Urban Linkage Economic
Labor Groups
Linkages Enterprises

Technology, Skill & Social Capital

Human Resource Urban Services Formation &
Development Through Partnership Empowerment
with Private Sector

Urban services through Private Partnership: The private sector is mobilised for the provision of
urban goods and services to facilitate the optimum utilisation of rural and urban social and
economic opportunities for local development. The focus of this operational strategy is two prone:
a) private sector is mobilised to create or establish institutional mechanism that could facilitate the
rural-urban interactions including the enterprises to procure goods and services from rural areas
and supply goods and services required by the rural areas (directly impacting on the rural-urban
interactions), and b) private sector is mobilised to provide urban services both to the urban
dwellers and to the rural areas in partnership with the local governments.

Rural Labour Linkage to Industrial/Commercial Establishments: Rural Labour Linkage (RLL) is an

innovative intervention of RUPP which is well integrated into the process of strengthening rural
urban linkages. Traditional tribes, occupational group and artisans (termed as Rural Labour and
poor communities) are organized into enterprises to link their skill to produce final/intermediary
goods or provide directly their skills (service) to the existing manufacturing units in the urban areas.
Technology transfer and skill development initiatives are keys to establish such linkages. This
action strategy is specifically directed towards the disadvantaged and poor sections of the
community to enable them to mainstream themselves into the development process.

Partners of the Programme:

The partners of the Programme are at three different levels: (1) The central or macro level; (2) The
Municipality and VDC or meso level; and (3) The community level in the municipalities/VDC, rural
market centres/small market towns or micro level.

Macro Level Partners: The UNCHS (UNHABITAT) executed the Phase I of the Programme (1997-
2001) in close co-operation with the National Planning Commission (NPC), Ministry of Local
Development (MLD) and the Ministry of Physical Planning and Works (MPPW). These agencies
still remain the partners while the executing agency is MLD during Phase II (2002-03) and Phase
III (2004-07). Beside, partnership of the national apex institution of private sector (FNCCI) and local
government (MuAN and ADDCN) is also ensured. The focus at this level is to establish a network

18
for coordination in programme implementation, upstream the field level experiences into national
policy and formulate required national policy and programmes to replicate the rural-urban linkage
development approach in the country.

Meso Level Partners: The municipalities, VDCs, and private sector organisations are the partners
at the meso level. RUPP is implemented by 17 Municipalities (urban market centres) and 33 RMCs
(Rural Market Centres) which are the small towns within 33 VDCs. The focus of the interventions at
this level is to introduce decentralised participatory planning and monitoring & evaluation process
by enhancing the capacities of those institutions such that the plans and programmes to strengthen
the rural-urban linkages are incorporated into their plan and budget. RUPP is simultaneously
implemented at both ends – the rural and urban – so that the synergy for strengthening rural urban
interactions is established at the outset.

Micro Level Partner: The partners at the micro level are the general populace (community) of the
municipalities and the rural market centres. The focus of interventions at this level is to organize
the grass root community institution, strengthen them to participate in the decentralized planning
process, empower them to implement socio-economic development activities at the community
level that could facilitate rural-urban linkages and increase their access to economic resources to
undertake linkage enterprise activities at the local level. It is focused to mobilise and support the
women, dalits and disadvantaged group of the community. The participation of the people is
ensured through their grass-root level organization called Tole/Lane Organization (TLO).

Focus on Rural Market Centres:

RUPP is simultaneously implemented in both the rural and urban areas so that synergies required
to strengthen rural-urban linkages is established at the outset of the Programme implementation.
However, the focus of the interventions there is unlike the other rural development programme.
RUPP is implemented within a ‘rural market centre’ in the rural areas which is the market
catchment area of a bigger market (municipality) and has its own market catchment area in the
rural hinterland. The focuses of the interventions there are also same as in the municipality (urban)
because those rural market centres play the role of an urban centre like municipality for its
hinterlands.

2.3.4 Poverty Alleviation through rural-urban linkages

Micro-enterprise development of the nature that links the rural areas with urban and vice versa is
the entry point for harnessing the local potentials and opportunities for poverty reduction. The focus
of the interventions to achieve them are: a) providing information on existing linkage opportunities
and potentials to the community; b) organize the community to receive the information and jointly
harness the opportunities for their socio-economic development; c) empower them to implement
socio-economic development activities at the community level that could facilitate rural-urban
linkages; and d) increase their access to economic resources to undertake linkage enterprise
activities at the local level. In terms of linkage analysis, these interventions address the physical,
economic, technological and service delivery linkages.

Physical Linkages
The community and the local government units are encouraged to construct local level small
infrastructures like roads, trails, link bridges, culverts, etc. to facilitate rural urban interactions. The
community themselves are encouraged and empowered to implement such programme – need
identification, plan, construct, operate and manage. Both the local government and the community
are supported to mobilize local resources and the resources from local development partners
including private sector and/or adopt cost sharing principles. To instigate such efforts the
Programmes provides only the ‘seed money’ to construct such infrastructures.

19
Economic Linkages
Establishing and strengthening rural urban economic linkages is the main focus of RUPP. A
number of interventions are implemented in this regard which are presented in Figure – 2.2.C and
described below.

Information and Communication:

Information on existing social and economic opportunities in the urban and rural market centres are
collected and disseminated to the communities through the process of community mobilisation and
other communication means. Other different ways of sharing such information are also adopted.
For example, interactions within the TLO members and among the TLOs, information sharing
between the TLO and the development agencies/projects and the private sector, observation visits,
etc. are adopted for information sharing. Besides, use of ICT is emphasised. A system of collection
and dissemination of daily agricultural price information in collaboration with the apex institution of
private sector organisation (AEC/FNCCI) through the web site has been initiated. Similarly, the b2b
e-commerce has also been initiated to match the rural and urban demand and supply of various
products and services.

Figure 2.4 Linkage Enterprise Development Concept

Community Tole/Lane Organization Savings

Information Social Capital & Enterprise Management Technology & Equity Credit
System Empowerment Training Skill Development Generation

Enterprise Development

LE FA RLL Poverty
Reduction

Rural-Urban Linkages

Organising the Community:

Development of linkage enterprises is based on the formation of social and institutional capital by
organising the people into the TLO and facilitating the interested and potential members of the TLO
to organise themselves into self-managed Linkage Enterprises (LEs) (Fig – 2.2.C) to undertake
commercial activities that enhance and/or strengthen rural-urban economic linkages. They are
organised following the provisions of the existing laws and regulations. Besides, enterprises are
linked to the services of existing financial institutions, the professional services of government line
agencies, NGOs and private sector.

Access to economic resources:

An important focus of the RUPP intervention is to enhance the community’s access to economic
resources for addressing the poverty issues. The emphasis is laid on their capacity building and
equity generation. Entrepreneurship of the interested and potential members of the TLO (identified

20
by the TLO itself) is developed by providing them with different training, technology and skills. All
these help the entrepreneurs to be ‘matured’ to undertake postulated enterprises. As a result, they
can access credit from the Programme or financial institutions. Their savings as the TLO member
often help them generate equity for undertaking the enterprises.

Entrepreneurship:
Entrepreneurship development is focussed so that the enterprises could become sustainable.
Formation of linkage enterprises is directly related to undertaking specialised functions or
economic activities, which take consideration of market opportunities in both the urban and rural
areas. Emphasis is on: a) promoting high value/low volume and market led cash crops, leading to
agricultural diversification and specialisation; b) promotion of value adding enterprises based on
existing demand and supply situations of different goods and services; and c) formation of
enterprises for the provision of urban services to rural areas. Positive discrimination to enhance the
participation of women and the disadvantaged group of the community in undertaking such
enterprises is adopted.

Technological Linkages
Promotion of technological linkages is not the specified objective of RUPP but it is achieved in the
process of enterprise development. RUPP focuses on the ‘transfer of technology’ - modification or
upgrading of existing technology through training and providing financial assistance to the
prototype unit to enhance the business efficiency and demonstrate to surrounding community – as
an important factor for enhancing the capacity to sustainably run an enterprise. Besides,
technological services from the urban to rural areas are supplied through the creation of
enterprises. For example, a ‘Focal Agent’ (FA) providing veterinary services to the rural areas, a
cycle or other maintenance and repair shops, ISP provider and/or cyber cafes, etc. The
participating economic enterprises are helped to acquire new technology as per their requirement,
however, environmental mitigation and employment creation issues are considered.

Promote Service Delivery Linkages

One of the focuses of linkage enterprise development is to encourage and empower the
community members to undertake ‘service enterprises’ linking rural and urban areas. The
emphasis is to develop an individual with special skill in the TLO as Focal Agent (FA). Such person
usually is with a running ‘service business’ and with Programme supports s/he expands and/or
upgrades the business so that services could be provided to the rural areas as well. A Focal Agent
works as a resource person to disseminate the special knowledge s/he has to other community
members and for the dissemination of RUPP approach and strategies.

An important component of RUPP is to instigate ‘Public Private Partnership’ initiatives for the
provision of urban services. The private sector – on individual basis or their institution (Chamber of
Commerce and Industry) - is mobilized to undertake service enterprises jointly (or under some
other arrangements) with the municipality or VDC e.g. slaughter and meat selling house/place,
fruits and vegetables retailing places, auto-park, etc.

2.4 Structure and Components of RUPP

Supports of the Programme are particularly concentrated at the meso (Municipalities and VDCs)
and micro (rural market centres and villages) levels. Supports at the micro level are directed at: 1)
developing linkage economic enterprises that contribute towards establishing and/or strengthening
rural-urban linkages for poverty reduction; 2) developing the capabilities and capacities of the
community institution – the TLO to: a) plan and undertake socio-economic development activities,
and b) participate in the municipal delivery system. Supports at the meso level are directed at
enhancing the capabilities and capacities of local authorities to plan and implement development
programmes to strengthen rural-urban interactions. Besides, supports also are directed for 1)
facilitating the implementation of Programme activities at the local level; 2) monitoring the

21
implementation of Programme activities and its impacts on improving livelihoods and the local
economies; 3) providing advisory and professional supports in a facilitative mode. Supports at the
macro level are directed towards developing policies and programmes based on lesson learnt from
the field. Besides, RUPP has certain focussed programmes a) to address the gender issues, b) for
disadvantaged groups of the community, c) issues of HIV/AIDS, and d) the issues of Internally
Displaced People (IDP). The later three issues are incorporated into RUPP due to their urban
nature.

2.4.1 Poverty Alleviation through enterprise development based on rural-

urban linkages

The Programme aims at poverty reduction through empowering the community to take advantages
of the social and economic development opportunities that can be obtained through strengthening
rural-urban linkages. Its interventions are structured to forge rural urban linkages in various ways:

• By community mobilization, which is a base for enterprise creation and providing integrated
support packages,
• By forming group enterprises in the urban areas that procure goods that are raw or semi-
processed or processed from rural areas and sell in the urban areas,
• By forming enterprises around a ‘focal agent’ who can undertake marketing of goods and
services and work as resource agent as well for the community,
• By forming enterprises in the urban areas that can provide “urban services” both to the
urban and rural dwellers,
• By arranging contacts between urban enterprises and groups of rural traditional
occupational tribes to supply inputs, products and/or labour required by those enterprises,
• By forming group enterprises in rural area that collects goods and services from rural areas
and supply to the urban areas, and
• By forming enterprises both in the rural and urban areas that establish business linkages
beyond a market zone.

All these ways are materialized through enterprise development component of the Programme
which includes following types of supports to the community members.

Enterprise Development
Enterprise development is the nodal activity for strengthening rural urban linkage and thus for
poverty reduction. Enterprise development activities are directed towards improving the livelihood
of poor and disadvantaged people both in urban and rural areas by enhancing their capacity and
creating enabling environment for them to undertake economic initiatives as listed above.
Programme support components are structured to exploit every possible business opportunities at
the local level that is generated by available and/or existing rural-urban linkages. At the same time,
potential linkages are also explored in the process of implementing the Programme activities.
Creation of enterprises is always propelled by linkage opportunities, and their sustainability is
ensured by minimizing risks.

Community Mobilisation:
Entrepreneurship Development and Enterprise Creation are taken as an integrated process, which
follow different stages as devised by the Programme. The intervention starts with the community
mobilization and sensitization of the TLO members in order to stimulate their entrepreneurial
attitudes towards economic linkages and business knowledge that could be available due to rural-
urban linkages. Community mobilisation is a ruling principle for awareness creation and hence TLO
members are always at the forefront in enterprise creation. TLO members both in the urban
(municipalities) and rural market centres are made aware of and facilitated to form self-managed
enterprises to take advantages from local opportunities.

22
Besides, the private sector and its organizations and institutions are mobilized to link with those
enterprises that foster economic transactions and strengthen linkages between rural and urban
market centres.

Information on opportunities:
4
The community mobilization is supplemented with the information on business opportunities
emanating from existing and potential rural urban linkages which are disseminated to create
people’s interest and suitable environment. The mobilization together with information further leads
to the improvement in their skills for identifying business opportunities. Based on such information
the TLO members are mobilized for the preparation of Enterprise Development Plan (EDP) by
willing and interested members. They are supported to form group enterprises to carry out the
linkage economic activities at the local level. These groups are supported to undertake their
selected enterprises.

At the later stage of the Programme, the use of ICT was initiated. This component provides
agriculture price information electronically from the web site developed for the purpose
www.agripricenepal.com and facilitate to establish linkages also through b2b e-commerce web
site – www.b2b.com.np
Institutionalisation:

The community mobilisation is also structured to facilitate the enterprises to get registered as
group business entity in the municipality or at concerned level of local authority and open a bank
account (if needed). The mobilisation and institutionalization leads the enterprise group towards
‘maturity’. Delivery of Programme support is made as per the needs and demand from the
members of the group enterprise or ‘Focal Agent’. The ‘Focal Agent’ is an individual with special
skill selected by the TLO who also goes through all the process as group enterprises. Most of the
time the focal agents are found with running business while its further expansion and up gradation
takes place with Programme supports. A focal agent works as a resource person to disseminate
the special knowledge s/he has to other TLO members.
Capacity Building:

The potential groups and focal agents selected by the TLO are given training as per the needs to
enhance their capacity to undertake the potential enterprises and to facilitate the entrepreneurship
development. The trainings provided for linkage enterprise development are: a) Enterprise
Management Training, b) Skill Transfer training, and c) Technology Transfer Training. These
training components are structured to build their capacity to undertake the selected enterprise.
Thus, the capacity building is tailored made to the specific enterprises. As a result, the attrition rate
is virtually zero. It leads to viable enterprise creation at grass roots level.

Enterprise Management Training (EMT) is provided to the member of enterprise group,

especially focal person of that group and the focal agent. It is basically designed to provide basic
knowledge about the enterprise management for potential entrepreneurs. The main objective of the
training is to promote entrepreneurship. As RUPP promotes community initiated linkage
enterprises among the TLO members with emphasis on poor, women and disadvantaged group of
people, EMT plays important role to build confidence, empowerment and further consolidate their
business ideas. The EMT helps develop entrepreneurship quality of local communities who are
organized in a group to undertake the selected enterprises. It equips them with necessary level of
basic knowledge about business practice. The training is focused to discuss the underlying
business opportunities based on rural urban linkage. Apart from other Programme supports,
knowledge imparted through this training ensures sustainable development of selected enterprises.
The course content covers all the important basic aspects that are crucial to run any small-scale
enterprises. Participants are well exposed to issues like, group dynamics, management quality,
coordination and linkage, principal of business and marketing, business based on rural urban
linkage, simple accounting procedure, environmental implications, etc. in a very simple way It is a
short-term training usually arranged for two to three days. The training is conducted in a very

4
Most of these come from UIC established in the municipality under RUPP support.

23
participatory environment where participants are given enough opportunities for their deliberations
and experience sharing. Very practical examples are cited while discussing different issues in the
training. Lectures, group exercises, role-play (e.g. buyer and seller) are the methods used. EMT is
compulsory in the process of entrepreneurship development and enterprise creation. Successful
participation in the training allows the enterprise group to get maturity certificate, which guarantee
the preparedness of the group to undertake the selected enterprises.

Skill Transfer Training (STT): is another important and specific training organized for potential
enterprises. The STT provides the members of enterprise group with special skill required to
undertake that particular enterprise (e.g. value adding or food processing enterprises). Related
local resource persons are normally mobilized to conduct such training as necessary. Apart from
theoretical know-how, emphasis is placed on practical knowledge dissemination. Very often, this
training is coordinated or linked with the skill development training conducted at the local level by
the Department of Cottage Industry of HMG/Nepal.

Technology Transfer (TT): It has been observed that many enterprises are continuing with old and
traditional technology while introduction of a new technology can help them reap higher benefit
with the same involvement. TT in RUPP refers to modifying or upgrading existing technology or
providing financial assistance for acquiring new technology as prototype unit to enhance the
business skill and disseminate it to the communities. Besides, training on the use of new
technology or observation visits to learn and acquire new technology are also arranged by the
Programme. The environmental issues as well as employment creation in transferring the
technology are always considered. Transfer of technology takes place either with the existing
enterprises or with the creation of new enterprises. Transfer of technology to the group works as a
demonstration site as well for other community members of that area. There are several successful
examples where larger community are motivated and started up a similar enterprise out of that
demonstration effect.

Credit and Equity Participation:

Maturation certificate is provided to the successful enterprises after they undertake needed
training, which is one of the requirements for submitting loan application to the Partnership
Development Committee (PDC) with necessary recommendation of TLO and ward committee.
Equity generation by the entrepreneurs to invest in the enterprise is another factor that ensures
financial participation and ownership. The enterprise members based on their capacity to invest
decide on equity participation. Credit support is provided against social collateral to the matured
enterprises to meet the capital requirement as per their business scheme. The amount of credit
provided to a group is lees than Rs. 40,000. Terms of Partnership (TOP) is signed between
enterprises and the PDC to provide loan and a re-payment schedule is jointly prepare before credit
is sanctioned. Loan period depends on the nature of the enterprise but normally do not exceed
more than one year. To insure repayments, the credit support is provided in a very transparent way
to the partner enterprise in the TLO meeting. Also, enterprise is closely supervised and monitored
to ensure use of credit support as per their business scheme and facilitated to run entrepreneurial
activities successfully. The TLO and staff of the PDC secretariat do regular monitoring of the
enterprise to ensure necessary facilitation for enterprise success and ensure fulfilment of the
obligation of the enterprise.

The enterprises that perform successfully with good re-payment record are provided with golden
certificate. These enterprises attach the golden certificate with loan application to show their credit
worthiness for re-lending from the Programme. Also, RUPP coordinates, encourages and
facilitates these enterprises to link them with financial institutions for getting the loan. The golden
certificate provided by the Programme is used to demonstrate their credit worthiness to such
financial institutions. Re-lending from the Programme is also provided to those needy enterprises,
which is subjected to the natural calamities and those that intend their business expansion and
diversification.

24
Linking with Higher Order Market:
The support from the Programme is also directed towards establishing linkages among the small
enterprises and with larger enterprises at the higher order market. This is structured to develop
market linkages among and between enterprises. The specific requirement, besides the capacity
building, is the need of larger amount of credit to undertake expanded business. In such special
cases, the limit on credit money to an enterprise is waived – providing more than Rs. 40,000 to an
enterprise.

Public Private Partnership

The private sector is mobilized to complement in the enterprise development initiatives. It is done
in two ways. The formal private sector, which is larger, is linked to the small enterprises supported
by the Programme for market linkages – buying/selling from the small enterprises, e.g. small milk
vending enterprises with milk chilling centre or large poultry farm to small vendors. Besides, the
formal private sector is mobilised for higher order market linkages. Secondly, the organization of
private sector (Chamber of Commerce and Industry) is mobilized for price information and b2b
linkages.

2.4.2 Urban Governance for rural-urban linkages

The governance intervention is structured to mobilize the community to plan and implement
programme activities that could help strengthen rural-urban linkages. Similarly, the intervention at
the municipal government level is structured to streamline those communities’ action plan into
municipal development plan. Since the rural-urban linkages alone cannot be the complete or whole
of the development agenda of the communities and the municipal government, they are further
facilitated by RUPP to address other socio-economic issues by streamlining them into the urban
planning process and governance. Such actions are neither unintended nor distraction from its
basic objective of strengthening rural urban linkages. It is rather complementing to develop urban
centres and rural market centres as mastermind of growth. This requires adoption of planning
process by local government that could address the overall development issues and at the same
time concentrate on strengthening the rural urban linkages.

From such perspective, RUPP's interventions in good governance are structured at two levels. At
the community level and at the municipal governance management level keeping into
consideration the participation, equity, responsiveness, and rule of law as the basic attributes of
the good governance.

At the Community Level

The support components at this level is directed towards establishing a grass root level community
institution, strengthening them to plan, implement and monitor projects that strengthen rural-urban
linkage and empower them to participate and streamline such plans in the municipal annual plan.

Formation of Community Based Institution:

Community mobilisation is carried out for establishing the grass root level community institution –
the TLO - for implementing RUPP activities in the municipalities and the Rural Market Centres. The
TLOs are supported to facilitate the mobilisation of local resources, to create conducive
environment for their participation in municipal development, to help in the empowerment of
women, to promote decentralised urban governance and to provide an institutional mechanism for
the empowerment of the communities at large. Therefore, the TLOs formed with the process of
community mobilization are self-governed and self-managed based on the norms of participation,
transparency, accountability and equity. The TLO is developed into a very practical community
based institutional set up where the decentralized participatory planning process could be
affectively initiated.

25
Strengthening/Institutionalising TLO:
Training and awareness creation and savings mobilization are the major components of
interventions to strengthen the TLO. Leadership, savings and credit, gender related, HIV/AIDS
related and participatory planning processes are the areas of training provided to TLO members.
The Programme has emphasized in TOT for the sustainability of such training at the local level.
Registering the TLO in the municipal governance mechanism institutionalizes them. All these
support components help develop the TLO into a mature community institution for formulating
plans and programmes for community level socio-economic infrastructure development in the form
of Tole Development Plan (TDP). RUPP emphasizes and provide supports to establish those
infrastructures that contribute towards strengthening rural-urban linkages. On the other hand, the
TLOs are linked with development process of municipality by adopting Participatory Municipality
Development Planning process and to line agencies, I/NGO, programmes and projects to address
their overall socio-economic development needs. Following trainings are provided to the TLO
members to strengthen their community institution.

Leadership & Management Skill Training: In each TLO there are some people who are active
leaders or live with potentials to lead. In order to deliver sustainable development at the grassroots
level these potential leaders or local talent needs to be utilized. These local leaders, in order for
them to be able to effectively utilise their potential for development of the community, need to be
trained on leadership and organizational skills. In line with this requirement, RUPP provides
training to TLO members on leadership skills, community organisation management skills and
participatory planning process. The trainings also become a forum for communicating to the local
leaders about the opportunities that can be tapped through the strengthened rural urban linkages.
The trained members are playing a lead role in motivating the larger community to take an active
role in the development process of their local area. The effort has produced activists equipped with
improved managerial, leadership and communication skills. These people are playing catalyst roles
in organising, planning and implementation strategies for the development of their communities.

Saving and Credit Training: Based on the needs of the community, a short but intensive savings
and credit training is organized for the TLO on regular basis. It is directed toward capacity building
of the TLO members to mobilize savings among the members, invest it, and keep minimum
necessary records or account. Lectures, group discussion, case study analysis and exercises are
the teaching methods used. Participants are given enough opportunities to share experiences with
colleagues and experts. Relevant practical exercises including four types of ledger entries, filling
up of application forms for loans and receipts and updating financial records, etc are provided to
the participants. Training participants are the treasurers and secretaries of TLOs nominated by
community. The trained treasurers and secretaries effectively manage and mobilize the Tole
Development Fund. A training manual on Savings and Credit has also been prepared as an
important resource material to conduct such training in future.

Gender Awareness Training: The Programme has been directed towards creating and spreading
awareness and consciousness about the gender issues in the community. The interventions are
not only directed to ensure women's participation in all Programme activities, both as participant in
decision making process as well as beneficiaries, but also to develop a better gender relation
within the TLO and in the ways in which it impacts on men and women.

Such trainings have significantly increased the representation of women members and leaders in
the TLO. It has also been able to increase active participation of women in TLO development and
entrepreneurial activities. The Programme's efforts are directed towards empowering women to
lead 50 percent of the TLO within a municipality.

Training on Participatory Municipal Planning and M&E Process: Participatory Municipal

Development Planning (PMDP) is concerned with planning, implementation, monitoring
and evaluation of the development activities at the municipality level. This training is
structured to empower the TLO members to plan and streamline such plans into the
municipal annual plan. It is provided to the TLO leaders at the community level both in the
municipality and rural market centres.
26
HIV/AIDS Awareness Training: RUPP has integrated HIV/AIDS related activities into urban
community mobilization process. Awareness about HIV/AIDS is created in TLOs. Before beginning
the awareness activities, Training of Trainers on HIV/AIDS are provided to municipal staffs. These
trained staffs provide training to the key persons of TLOs. These trained key persons disseminate
information on HIV/AIDS to TLO communities.

Field Visits: are organised for the TLO members to learn from other TLOs and interact on the
institution building and Programme implementation at the TLO level. Such exchange visits between
one TLO to other TLOs helps improve TLO functioning and contributes in TLO strengthening. They
learn from each other’s experience. Members of the weak TLOs are encouraged to visit relatively
strong and well-managed TLOs to interact and learn about TLO institutional strengthening, plan
and implement socio-economic development activities at TLO level by mobilizing TLOs'
participation and resource mobilization.

Apart from the capacity building of the TLO through different training, the TLOs are encouraged to
mobilise compulsory saving among the members and create fund. Saving generated by individual
members of community are the assets of TLO and is the first step towards their self-reliance. It is
one of the essential aspects of community mobilization that works as a bond to keep the members
together. Community savings have become major medium to attract outside resources. It has
promoted community morale, financial discipline and empowered the members. The generation of
capital through savings is of paramount importance towards viability and sustainability of a TLO.
The savings is used in supporting micro-enterprise to satisfy local credit needs, and at the same
time, it is also used to contribute towards development of TLO level infrastructure.

Formulation of Tole Development Plan (TDP):

The TLOs are supported to develop TDP that could strengthen rural-urban linkages and also for
their overall socio-economic development. The intervention from RUPP is directed towards
conducting of planning meeting of the TLO members, formulation of project proposals that directly
or indirectly contributes towards establishing and/or strengthening rural-urban linkages, projects
that addresses the TLO’s socio-economic problems, prioritise the proposed projects and mobilise
resources for their implementation. The TDP formulated by the TLO, therefore, includes many
projects beyond what could facilitate rural urban linkages. TDP thus created serves as a basis to
allocate Seed Grant support by RUPP as well as other resources directed for development of the
particular municipality and RMC.

Implementation of Tole Development Plan:

Provision of seed grant to implement TDP is one of the key elements of integrated support
package of RUPP that directly contributes to develop socio-economic infrastructures relating to
rural urban linkages at the community level. In other words, RUPP encourages investment on
economic rather than social infrastructure that contributes to improved rural urban linkages. Seed
grant interventions have played very important and diverse roles during the implementation of
RUPP. In the initial stages it helped establish cohesiveness among the TLO members to
strengthen their institution. As more and more linkage related infrastructures are constructed, the
TLO members increasingly realise the importance of linkages and start pursuing establishment of
linkages more rigorously. In later stages of RUPP implementation, this component became an
important entry point for adopting Participatory Municipality Development Planning (PMDP)
process. The TDPs have also become a medium for mobilizing resources from different sources.
As a result, the percentage share of resources mobilized from various sources and peoples’
participation in the implementation of TDPs are almost eight times the amount of seed grant
provided by RUPP. High percentage of peoples’ participation in mobilization of resources is due to
the participatory approach that has been adopted in identification, planning and implementation
process of TDP. Community contribution and involvement is assured in every case to create
ownership and secure sustainability. All TDPs are implemented, executed, monitored, supervised
and evaluated by the TLO with technical supports from the municipality and RUPP.

27
Socio-economic infrastructures, such as market facilities, periodic markets, fruits/vegetable/
livestock collection and retailing centres, slaughter/meat selling houses, feeder roads, link
roads/bridges, culverts, road improvements, foot-trials, service centres, multi-purpose community
halls or buildings, etc. that directly facilitate rural-urban linkages are the TDPs supported with the
seed grant. The support delivered to TLOs is mainly on grant basis while RUPP give special
consideration to those projects that demands money on refundable basis. The returning period is
worked out on mutual agreement.

At the Municipality Level

The governance intervention at the municipal and VDC level is directed towards streamlining those
communities’ action plan into municipal/VDC development plan and to enhance the capabilities of
the municipal/VDC government to plan and implement programme activities for strengthening
rural-urban linkages. As in the case of the community, the municipal/VDC cannot limit itself to the
issues of rural urban linkages alone but also has to address many other areas of urban
development. The RUPP initiation to plan for rural urban strengthening has worked as an entry
point for improving the overall planning process of the municipality and its governance to address
the issues of poverty reduction. Such interventions are structured to establish institutions, including
the private sector and its mechanism within the municipality that could sustainably continue the
intervened activities even after the programme supports are pulled out.

Urban Information Centre:

Urban Information Centre (UIC) is established and strengthened in the partner municipalities to
plan for establishing and strengthening rural – urban linkages by making necessary information
available. Municipal database is prepared by collecting information from different primary and
secondary sources including household survey. GIS map of the municipality is prepared which
helps PMDP process and prepare periodic plan. Economic opportunity and potential derived from
the information in UIC are disseminated to the TLO by community mobilizers through urban
community mobilization process.

Human Resource Development:

RUPP accords a high priority to human resource development because it is a prerequisite for the
sustenance of the Programme. The Programme’s focus on human resource development is on two
fronts. Enhancing the capacities and capabilities of the municipality and its staff a) to give
continuity to the Programme, and b) to plan for establishing and strengthening rural-urban linkages
and for overall municipal development by adopting decentralized planning process.

The first category includes TOTs on different training domains that needs to be imparted to the
community for the continuation of RUPP initiated activities such as enterprise management,
community mobilization, saving and credit training, HIV/AIDS, gender, etc. Since gender
considerations cut across various issues, it was felt that staff at all level of Programme
implementation must be gender sensitive. Accordingly, gender sensitization programmes are
conducted so that gender issues including access to resources are adequately addressed across
the whole spectrum of Programme implementation. Besides, elected municipal authorities
including ward chairpersons and ward members, municipal personnel and PDC members are
given field observation and exchange visit tour of the municipalities. Experience sharing and
observation help to develop an understanding about the Programme and see achievements.
During the exchange visit, sharing on the best practices of different municipalities helps in
improving the RUPP initiated activities like municipal governance, planning process, resource
mobilization, mobilization of the people's participation and activities on poverty alleviation.

The second category includes trainings on PMDP, information system, e-governance, b2b e-
commerce, periodic plan preparation, etc. that helps to adopt decentralized planning. The PMDP
training is provided to the municipal staff, elected representatives and other stakeholders both in
the municipality and rural market centre (PVDP). A PMDP manual to ensure a structured approach
and standardized content to be delivered in the training has also been prepared.

28
Human Resource Development Centre:
Apart from the training activities, RUPP supports are structured to institutionalise the trained
human resources and the body of knowledge generated in the implementation of the Programme
activities. Accordingly, municipalities have been assisted to establish a HRDC to institutionalize
RUPP experiences and provide training to its staff in different areas of municipal activities including
the rural-urban linkages. All the guidelines, manuals, directives and other information pertaining to
RUPP implementation are archived in HRDC together with the UIC. It has helped immensely in
providing required minimum infrastructures for undertaking human resource development activities
in the municipalities. With the establishment of HRDC, there have been rise in activities such as
conferences, seminars, workshops and training activities in the municipalities assisting in the
human resource development at the local level. It, at the same time, also helps generate some
income to the municipality. Establishment of a HRDC is an important component in the governance
strengthening supports to the municipality. Because, it has been realized that in order to make
development activities more reliable, effective, participatory and capable of addressing local need,
human resource development has to be location-based.

Establishment of RUPP Section:

The municipalities have been supported to institutionalise the RUPP initiatives into the municipal
organisation by establishing a RUP section/unit for continuation of RUPP activities after the
termination of UNDP supports. This section/unit is a continuation of support office established as
the secretariat of PDC to implement all the Programme activities. All the office equipments,
logistics and other materials provided to SO are transferred to this section/unit. Staffs of the RUP
section/unit have been well trained on RUPP process and model of urban governance and poverty
alleviation through strengthened rural-urban linkages. RUP section as the secretariat of the PDC
promotes urban good governance through community mobilization, participatory planning and
rural-urban linkage, socio-economic enterprises in the municipality and RMCs. As a result,
internalisation of the Programme has taken place and municipalities and VDCs are implementing
the activities on their own.

Municipal Development Fund:

Another area of support to the municipality and VDC is to ensure financial sustainability of RUPP
initiatives. A Municipal Development Fund (MDF) is established in each partner municipalities by
revolving the credit and interest earned money from enterprise development efforts. Initially, it was
created from the credit fund provided by RUPP and contribution of the partner municipality and
VDC. Increasing MDF fund at all partner municipalities ensures the continuation of Programme
even after the withdrawal of UNDP direct support. There is sufficient fund accumulated in each
MDF to continue RUPP activities in the municipality and sustain through lending credit to the
linkage enterprises5. Financial linkages between MDF and other financing agencies ensure the
fund requirement to meet the ever-increasing demand for credit of the poor. Accordingly, financial
linkage has been initiated between MDF and ADB/N in Biratnagar and Byas municipality in
coordination and facilitation of RUPP.

Towards the end of the second Phase of the Programme, RUPP has helped develop the by-laws
and directives to operate MDF autonomously in the municipality. The municipalities are planning to
adopt it through its Council decision. Once formally established, the MDF will function as a basket
fund for municipal development where donors and other agencies also can put resources and
implement activities as agreed upon.

Public Private Partnership:

Municipality in the present context cannot sustainably manage the delivery of urban services
without active involvement of private sector. Public Private Partnership (PPP) is intended to use
public resource optimally through involving private investment for improved rural urban linkages.
The Programme has initiated the activities on PPP in all the municipalities and every activity
accomplished or under progress contributes towards improving rural urban linkage. In this regard,
the ground works such as identification of areas for public-private partnership, their feasibility and

5
The MDF has accumulated capital fund ranging from Rs. 3.5 million to more than Rs. 10 million in different municipalities.

29
dialogue with the related agencies are supported. Though Programme does not make any direct
financial contribution, but then, it plays a very constructive role in coordinating and facilitating
between different parties. The Programme moreover supports on software part of the project. Apart
from individual private party, respective Chamber of Commerce and Industry plays a major role in
the whole activities. The following are few PPP projects undertaken by the Programme in different
municipalities.

• Establishment of a vegetables and fruit retail market place in Pokhara, where private party
joined hands with Pokhara Sub-municipal Corporation. Similarly, a private sector has been
mobilized there for traffic and parking management.
• Hill park construction feasibility study and construction work carried out under PPP
arrangement at Butwal Municipality.
• Mobilized and facilitated private sector to establish Internet Service Provider (ISAP) in
Tansen and Byas municipalities.
• Slaughterhouse including shops constructed under PPP arrangement in Tulsipur.

Publishing Citizen Charter:

The growth of urban area of Nepal over the recent years has brought about corresponding
challenges in urban governance. As the crucial relationship between good governance and
development become ever more apparent, there is an urgent need to focus on enhancing the
transparency in the local governance. The transparency attributes of good governance have many
ramifications that touch upon discipline, accountability and efficiency aspects of local government
functions. It is within this context that RUPP has assisted its partner municipalities in publishing
‘Citizen Charter’ that provides clear and unambiguous insights into their basic development goals
including the urban development for rural-urban linkages and their functioning. It helps create
environment for transparent and efficient discharge of municipal responsibilities towards its
citizenry. The basic premise of citizen charter hinges around the citizens’ right to information and
municipality’s basic obligation with regards to delivering transparent services.

In simple terms, citizen charters list down services that the municipalities provide to its citizens
along with information on fees and service charges that are payable as well as lead time taken to
complete a formality or provide requested service. From citizens perspective, this has been a
welcome departure from traditional mode of functioning where information was hard to come by
and there was no way of knowing in advance about formalities and other requirements in
connection with receiving municipal services without physically visiting the municipality and
engaging in often frustrating queries or labyrinthine of formalities. The introduction of Citizen
Charter has helped remove difficulty faced by the municipalities. As related information is clearly
mentioned in the citizen charter, there is limited room for someone taking undue advantage due to
ambiguities and lack of information. Besides highlighting municipal responsibilities towards its
citizenry, the Charter also spells out the obligation of individual members of the society towards the
municipality. Citizen charters have been published by all 12-partner municipalities of RUPP and
being replicated in other municipalities. The contents of the charter have been spelt out in clear
and succinct manner in Nepali in the form of booklets intended for wider distribution. Beside, the
basic contents of citizen charters have also been outlined in the form of wall paintings in the
municipalities.

Synergy for R-U Link:

Synergy between the local development agencies is very important for establishing and
strengthening rural-urban linkages as it encompasses cross-jurisdictional activities. For example,
the municipality (urban) and the VDC (rural) have to work together for enhancing rural-urban
linkages. Similarly, different line agencies and development partners also have big role in
developing rural-urban linkages as the scope of linkages is multi-dimensional. RUPP has put in
place a very comprehensive method of ensuring coordination and synergy among all stakeholders
at the municipality by devising different institutional mechanism. The foremost one is the PDC
itself. It is structured to achieve coordination between RUPP initiatives with other activities at the
municipality level. A ‘Local Initiative Forum’ (LIF) encompassing all the development partners has

30
also been established to share experiences and coordinate each other’s development activities at
the municipality level.

2.4.3 Empowering the Women

Recognizing the fact that women are the non-participating majority, RUPP supports in creating and
spreading awareness and consciousness among the TLO members for equal participation. It
ensures women participation in all Programme activities, both as participants in decision-making
process as well as beneficiaries. RUPP supports are also structured to create conducive conditions
for women to enhance their capacities and capabilities for their active participation and greater
roles in decision-making and involvement in social and economic development activities. The
interventions in this regard are directed towards ‘positive discrimination’ for confidence building and
empowering the women. They are provided with extra motivation and skill to enable them to take
active participation. Broadly speaking, Programme supports in this regard could be categorised
into a) social empowerment and b) economic empowerment.

Social Empowerment:
Recognizing the fact that women are the non-participating majority in Nepal, RUPP advocates and
promotes awareness and consciousness among the community members for equal participation
through community mobilization. Women in the community are encouraged to represent their
household in the TLO and become the executive member. The male members are encouraged to
give chance to the women members in all TLO activities. Their capacity to lead and/or participate
in the TLO is enhanced by providing them with different training such as leadership, savings and
credit, exposure visit, information sharing, mutual interaction, etc. Women’s participation in all the
training provided by the Programme is given preference over the male participation. There capacity
to handle community savings is particularly enhanced so that the economic resources remain
within their control. All these lead to active participation of women in the formulation of TDP, their
implementation, management, monitoring and evaluation.

Economic Empowerment:
To bring the women into public front, first and foremost, their household economy needs to be
sound and strong. Therefore, enterprise development is a nodal activity for economically
empowering the women. The RUPP enterprise development initiatives are basically concerned
with improving and creating enabling environment for the women to undertake rural-urban linkage
economic initiatives. The TLO mobilizes its members, particularly women members, to undertake
enterprises. However, at the same time great care is taken while introducing new types of
enterprise for women - cautious of having chances of increasing workload and decreasing their
control over household resources.

2.4.4 Addressing the Needs of Disadvantaged Group

RUPP has introduced a special programme component called Rural Labour Linkage (RLL) for the
economic empowerment of the disadvantaged group in the community. It is an innovative concept
that is well integrated in the process of strengthening rural urban linkage. The Programme supports
the underprivileged groups of society under this activity. The effort organizes the traditional tribes,
occupational groups and artisans of both rural and urban areas into enterprises and links their
skills to produce intermediary goods/inputs and/or directly provide their skills/labour for/to existing
manufacturing companies which facilitate rural-urban flow of goods in a larger scale.

The intervention starts with base line survey in both urban and rural areas to identify poor and
disadvantaged communities with skilled and unskilled workers/labourers to undertake
entrepreneurial activities. At the same time, manufacturing establishments are also identified to
which forward linkages could be established to supply their labour and/or products. The
communities thus identified are organized into enterprise group to supply inputs to variety of

31
manufacturing companies. In few cases, such groups are also directly linked with the
manufacturing companies to work with them. In order to meet the requirements of respective
companies Programme arranges training to the selected groups to improve their skill and impart
with technologies of their occupations. In order to make the partner enterprises ever flourishing and
expanding, continuing training programs are arranged to upgrade their skill and familiarize with
latest change in the technology to enable them to add value to their services. This activity has
been very successful in targeting the poorest of the poor community.

2.4.5 Addressing HIV/AIDs Issues

Considering HIV/AIDS as a cross cutting issue and the need for multi - sectoral involvement for an
effective response against HIV/AIDS, RUPP aims to reduce both, a) the spreading of the virus, and
b) social and economic impacts of the epidemic. The interventions in this regard therefore are
directed towards: a) mainstreaming HIV/ AIDS into the municipal planning, and b) linking poverty
reduction not only for prevention of HIV/AIDS but also to mitigate its impacts. The potential roles of
community mobilization process and the resulting institutions built by RUPP that can effectively
reach more than a hundred thousand households directly are mobilized for these purposes.

Mainstreaming HIV/AIDS Issues into the Municipal Planning:

The main objective of mainstreaming HIV/AIDS component into the partner municipalities is to
incorporate HIV/AIDS related issues into their plans and programmes and also builds capacities of
the partner municipalities for their effective implementation. The other objectives are to create
awareness among TLOs and enhance their capability to plan for addressing HIV/AIDS issues at
the community level.

Keeping in line with its goal and objectives, RUPP has operationalised the following supports:

• Conducts awareness campaign against HIV/AIDS through community mobilization process

and utilising the TLOs.
• Enhance TLOs’ capacity to address local HIV/AIDS situation by enabling them to formulate
their own HIV/AIDS related plan to include it in Tole Development Plan.
• Enhance the capacity of municipality to address the HIV/AIDS issues.

Awareness creation: RUPP has adopted a new process for the implementation of HIV/AIDS related
activities by integrating these activities into the community mobilization process. Apart from using
conventional awareness creation methods such as pamphlets distribution, mass rally, HIV/AIDS
Day celebration, different medias, etc., RUPP interventions are focussed towards non-conventional
method of awareness creation. Some such methods used are: affixing red ribbon at the entrance
door of each and every household, use of local Muslim and Hindu religious leaders to preach about
HIV/AIDS to their clients, Information, Education and Communication (IEC), etc. It has also
embraced upon a satellite radio program, broadcasted in Nepali language by Equal Access
channel, for awareness raising activities-specially against HIV/AIDS. Apart from these activities,
one of the agenda of TLO regular meeting is also HIV/AIDS.

Build capacity of TLO: RUPP carries out HIV/AIDS training to TLO executives. The main objectives
of this training are: a) to sensitise TLO executives against HIV/AIDS, b) to enhance capacity of
TLO to conduct HIV/AIDS awareness program at community levels, and c) to formulate TLO level
HIV/AIDS related plans and programme in the form of TDP. The focus of the intervention here are
to enable the TLO members to a) Assess the local situation regarding HIV/AIDS, b) Identify
vulnerable groups in the community, and c) Formulate plan as per the need of situation analysis.
The TLO formulates HIV/AIDS related plans and includes them into TDP which are ultimately
incorporated into municipal annual plan.
Build capacity of municipality: The supports are directed towards enabling municipality to address
the HIV/AIDS issues. To begin the awareness activities, Programme provides Training of Trainers
to municipal staffs, who in turn, train few key persons of TLOs. It is these trained key persons who

32
disseminate information on HIV/AIDS to their respective communities. RUPP supports municipality
to maintain database containing information on HIV/AIDS within a municipality which becomes the
foundation for planning. RUPP also helps mainstream HIV/AIDS issue into the annual and periodic
plan of the municipalities.

Linking HIV/AIDS and Poverty Reduction:

Pursuant to its objectives of linking poverty reduction to prevention of HIV/AIDS and mitigation of
its impacts, RUPP carries out the following activities:

• Linking poverty reduction to prevention of HIV/AIDS and mitigation of its impacts through
the Enterprises Development Plan with credit, training and technology transfer supports.
• Create enabling environment for both vulnerable and infected groups through their
economic empowerment.
The target groups for economic empowerment are: a) those that are most vulnerable to HIV/AIDS,
and b) people living with HIV/AIDS (PLWA). The TLOs themselves identify the people who are
vulnerable to HIV/AIDS and also provide credit, training and technology transfer to those who are
most vulnerable to HIV/AIDS through the process of Enterprise Development Plan.

Thus, RUPP has adopted a markedly different approach in this respect, as community itself is
made responsible for the total management of HIV/AIDS situation by developing its own HIV/AIDS
relevant plan. Secondly, the people who are vulnerable to HIV/AIDS are economically empowered
and diverted to safer alternatives.

2.4.6 Addressing issues of Internally Displaced People (IDP)

Considering the pressure that IDP can have on a peaceful co-existence and social harmony in any
urban setting, and also realizing that an excessive number of IDP can exert pressure on urban
services delivery leading to shortages of potable water, drainage problem, solid waste problem in
Municipal setting, RUPP has perceived that the issue of IDP should be addressed in the broader
framework of urbanization. In this context, RUPP interventions are focused to following activities.

• Strong effort on advocacy at municipal and TLO levels for harmonious adoption of IDPs, at
least temporarily.
• Strong emphasis on research focusing on IDP including identification of IDP, reason for
being IDP, various consequences, etc.
• Creating enabling environment for IDPs resettlement by enhancing appropriate skills that
help to resume their normal life in place of origin.
• Supporting IDPs within the municipality to undertake income generation activities for their
decent living.
• To scale up necessary urban service delivery targeting the IDPs.

2.5 Long-Term Impact of the Intervention/Practice

Most developing countries today are undergoing a process of rapid urbanization and are seeing a
dramatic movement of people to cities and towns. Concurrently, circular migration between the
rural and urban spheres has increased, as has the number of households and families- many of
whom are poor.

Most national planners and politicians are cognizant of the different challenges posed by rural and
urban development. It is generally acknowledged that what happens in one-sector influences the
other, but there is no consensus on how these dynamics work. As a result, countries like Nepal
have invariably developed distinct policies and strategies to translate that dynamism for holistic
development of both the spheres.

33
There is also a common understanding that the problems of poverty manifests itself in rather
different ways in rural and urban environments, but poverty studies vary a great deal on how they
analyze these difference. While the rural-urban dichotomy appears in most poverty statistics, the
analytical significance of this distinction is less apparent. There is seldom a focus on how rural and
urban poverty may be interlinked, and this may have consequences for the understanding of
processes of impoverishment, as well as the formulation of policies to address them. Many
researchers even go as far as questioning whether it is meaningful to treat rural and urban as two
distinct forms of poverty. There is a danger that dichotomization of rural and urban poverty may
draw the attention away from the dynamics of the rural-urban interface, blurring important
interdependencies between the two.

It is our belief that the dynamics of poverty in the rapidly urbanizing under developed countries like
Nepal has to be understood in the interplay between the rural and the urban spheres. A better
understanding of the rural-urban interface is critical to the formulation of national poverty reduction
strategies, in Nepal, as it is experiencing rapid urbanization with distinct feature-growth of very
large number of small towns, rural market centres and small settlements all over the country.

2.5.1 Possible long-term effectiveness

Development of institutions and institutional mechanism at different levels of municipal governance

to facilitate and strengthen the dynamism of rural-urban linkages to help alleviate poverty are the
major long term effects of RUPP. Apart from its different components of integrated support
package the seed grant intervention under RUPP have so far lived literally up to its name – a seed
of commitment growing into a tree of wide scale community participation and development.

Grass Root Level Institution:

Establishment and institutionalization of

Number and Status of Grass Root Institution
Tole/Lane Organization (TLO) is one of Urban Rural
the long lasting outcomes of RUPP as a Number of TLO 2,343 363
grass root level institution beyond ward HH Members 84,298 13,205
level in the municipality. It has been well Seed Grant Projects 1,061 198
established as an institution of the Seed Grant NRs. 18.14M 6.75
community, by the community and for Total Project Cost 72.02M 25.60
the community. From the perspective of Seed grant beneficiaries48,522 55,840
the community, it has become an integral Total Savings 58.97M 12.89
part of them through which they Investments 58.97 10.67
themselves can address their socio-
economic development issues for their
own holistic development. They have mobilized savings of NRs. 65 million and invested almost all
of it. TLOs are empowered to formulate, implement and monitor development plans and
programmes at local level such as Tole Development Plans (TDP) and Enterprise Development
Plans (EDP) for strengthening and facilitating rural-urban interactions and other socio-economic
development projects. Besides, it has become a very practical and effective platform for them to
reflect their needs and grievances to the higher authorities – to Ward and to the municipality. It has
made possible to implement decentralized planning and democratic governance in true sense as
the TLO can mobilize the participation of each and every household and the size of each TLOs is
small enough to do so. All households are member in the TLO and the whole area of the
municipality is covered by the TLOs. As a result, TLO has developed into an informal unit in the
decentralized planning and governance mechanism. The geographical demarcation of those TLOs
using GIS technique into municipal map has further established them as a planning unit of the
municipality. On the other hand, the economic resources generated by the TLO through savings
have made them more economically empowered.

Similarly, RUPP’s intervention in empowering the community has brought positive changes in the
attitude of TLO members. Initiation of social works including construction of different infrastructures

34
from sanitation to water tanks to link bridges and road networks can be found in the partner
municipalities. TLOs members are actively involved in organizing and participating in anti
alcoholism, anti gambling, waste management, HIV/AIDS awareness campaigns.

Facilitating Good Urban Governance:

The development of grass root institution has far

Institutions Established for
reaching impacts on the municipal governance. Taking Good Urban Governance
the TLO as base the municipalities are able to institute 1. Urban Information Centre 12 Muni.
an effective participatory planning process and efficient 2. HRDC 12 Muni
service delivery mechanism to reach to the poor and the 3. Citizen Charter 12 Muni
real beneficiaries. The municipalities have adopted 4. PMDP followed 12 Muni
participatory municipality planning process (PMDP) in the 5. e-governance 4 Muni
spirit of Local Self-government Act. Even in the absence
of local elected representatives, municipalities
recognized and accepted TLOs as a grass root level institution for performing their daily
administrative and development activities and for delivery of urban services to its citizen. Now
TLOs have become an indispensable part in the municipal government. Such direct participation of
the community in municipal decision-making process and urban service delivery have facilitated
towards establishing transparent and responsive urban governance. On the other hand, publication
and dissemination of Citizen Charter to each and every household within TLO has helped establish
accountable urban governance. Thus, another long term impact of RUPP has been the initiation
towards the establishment of good urban governance in the country. On the other hand, the
initiation of e-governance in the municipalities with RUPP support has further contributed towards
establishing good governance.

Building Human Resources:

An important long term impact of the Programme is the outcomes coming up from its human
resource development efforts. Such impacts area at two levels: a) the community level, and b)
municipal level. At the community level, different trainings have been provided to the members to
enhance their capacity and empower them socially as well as economically. At the municipality
level a cadre of human resources have been established, which can undertake plans and
programme for strengthening rural-urban linkages, support in enhancing management capabilities
of municipalities for decentralized planning and mobilize community members to participate in such
planning and in the governance as well.

Human resources development

Trainings Male Female Total
Skill Transfer 904 2,209 3,113
Enterprise management 3,768 4,552 8,320
Technology Transfer 153 186 339
PMDP 3,046 2,811 5,857
PVDP 655 329 984
Savings/credit 2,205 2,688 4,893
Local governance 288 29 317
Gender awareness 548 962 1,510
Leadership 2,546 2,582 5,128
Programme orientation 513 343 856
Enumerators 77 34 111
Exposure visits 120 91 211
Computer 682 561 1,243
Additional training 391 517 908
HIV/AIDS 4,160 7,857 12,017
Total 20,056 25,751 45,807

35
Short Term and Long Term Impact of the Intervention on the Poor

RUPP supports have had both short term and long term effects on the poor community. This could
be classified into direct impacts on poverty reduction and the social empowerment of the poor to
participate in the social development and governance. The joint total effect of these two
interventions has been the ‘streamlining of the participation of the poor’ into the main or broader
socio-economic development of the community.

Impacts on Poverty Reduction:

The direct interventions to raise poor’s Programme Supports to Poverty Reduction

economic status through income generating Urban Rural
activities have propelled them to venture on Number of enterprises 3,868 799
different enterprises on their own. They were Enterprise members 8,133 2,857
able to raise their income level in the short Credit supports M. NRs
Equity participation
73.06
61.72
18.70
17.80
run but the process adopted by RUPP has Technology 188 cases
empowered them to undertake different RLL 319 cases
economic activities based on the rural-urban Paid back loan NRs. 93 M
interactions. They themselves are ready and Outstanding loan NRs. 23.66 M
Overdue loan NRs. 1.6 M
willing to invest on their own with a small Repayment rate 99%
technical supports from the Programme. As a B2b e-commerce 12 municipalities
result, the equity participation by the poor in
undertaking different enterprises has been almost half of the total investment required to run an
enterprise. Such linkage enterprises are concerned with activities related to improvement in
livelihoods of poor, disadvantaged groups, dalits and other ethnic groups by creating enabling
environment for undertaking economic initiatives based on rural-urban linkages. The poor people in
partner-municipalities and rural market centres have been mobilized to form self-managed
organizations to be engaged in economic activities that help improve production and enhance
trading by taking advantage of local potentials and opportunities. More than 13 percent of the total
household members of the TLO are directly benefited with the poverty reduction supports of the
Programme

The preliminary analysis indicates that the Economic Impact Assessment (EIA) of One NRs. credit
has been able to generate NRs. 19.97 on the average. EIA indicates that a Rupee of initial
investment, on the average, generates about NRs.5 of sales over a period of one year and each
NRs. loaned from the credit to the community enterprises add 16 NRs. to the local economy.
Impact assessment studies by an intern from University of Colombia, USA found that after
obtaining credit from RUPP, 68 percent of the entrepreneurs have increased their income and 23
percent have successfully raised themselves out the poverty line. Similarly, a study conducted by
the UNDP/Nepal found the Rural Lour Linkage (RLL) component of RUPP able to improve the
economic status and livelihoods of the target group (traditional and occupational cast) with RLL
loan by increased fixed assets and business expansion. To expand the sphere of linkage
enterprises, initiation of B2B e-Commerce including the ‘daily agriculture market price
dissemination’ by RUPP jointly with Agro Enterprise Centre/Federation of Nepalese Chamber of
Commerce & Industry in collaboration with local Chamber of Commerce & Industry also has a long
lasting impacts in flourishing the linkage enterprises.

Social Empowerment of the Poor and Women:

While implementing programme activities in

partner municipalities, RUPP has also Women’s Participation in RUPP
concentrated in addressing the problem of More than 52 % TLO members are Women
More than 50% seed grant beneficiaries are Women
gender inequalities through its community More than 53% of enterprises are run by Women
mobilization process. As stated above 53 More than 56% of training beneficiaries are Women
percent of linkage enterprises successfully
run by female, 50 percent of seed grant
beneficiaries are female, 56 percent of training beneficiaries are also female. Similarly, more than

36
50 percent of female members in TLOs ensuring reasonable representation of women in TLO
executives committee and sub-committee formed under the jurisdiction of TLO.

2.5.2 Paradigm shift

The success of Rural- Urban linkage has already begun to yield its fruit in Nepal. Inspired from the
impacts of successful implementation of Rural- Urban linkage, His Majesty’s Government of Nepal
has incorporated Rural- Urban linkage in its 10th plan. Similarly, recognizing the further need of
expansion of Rural –Urban Linkage approach, the government has decided to replicate the rural-
urban linkage approach to other remaining municipalities of Nepal in a phase- wise manner. In its
phase, the government has been replicating Rural- Urban Partnership Programme to five
municipalities. Inspired from success, the Programme in its third phase is being implemented into
other eight municipalities and a number of Rural Market Centres.

The community mobilization process, the mainstay of the Programme, has been proved as an
effective process for the empowerment of the community. Although TLO has no legal recognition
yet, but, in practical terms, a Tole / Lane Organization (TLO) has been recognized as an authority
representing community, thus during the municipal planning the voice of TLOs are deemed as a
communities mandate, something the municipal authorities dare to ignore. Recognizing the
important role of TLOs in the municipal planning, the Municipalities are adopting Participatory
Municipal Development Planning process – a process that insures the inputs of TLOs in the
municipal planning. As an impact of this, a decentralized planning process is established which
ensures the participation from household level.

Apart from this, TLOs have not made responsible for their own development. They are held
responsible not only formulating their own development plan but also to mobilize resources for the
implementation of plan. As result of such an empowerment, TLOs have undertaken 1124 socio-
economic projects mobilizing an amount of NRs 70, 904,666 by themselves without taking account
of the Programme contribution of NRs 23,159,648.

TLOs are not only empowered for their development but also for economic empowerment. TLOs
also identify the poorest members among them and recommend a package of credit, training, and
technology transfer to their poorest members for their economic empowerment. As result of this
economic empowerment of the poorest members of TLOs, a total of 14939 entrepreneurs have
been supported with credit, training and technology transfer. Out of them, 68 percent of
entrepreneurs have increased their income and 23 percent entrepreneurs raised themselves out
the poverty-line.

Apart from the economic empowerment, TLOs have been empowered for other specific purpose,
e.g., Gender empowerment and fighting against HIV/AIDS. As result of this TLOs have started their
own response against HIV/AIDS, by carrying out awareness program, by economic empowering
the people who is vulnerable to HIV/AIDS because of their financial condition etc. As an impact of
gender empowerment, 53 percent of TLO members are female, 50 percent of seed grant
beneficiaries are female, 53 percent of entrepreneurs are female and 56 percent of training
beneficiaries are also female.

2.5.3 Sustainability

After a successful implementation of the Programme in 12-partner municipalities and 33 rural

market centres with the objective of strengthening Good Urban Governance (GUG) and Poverty
Alleviation, the Programme has been completely internalized as RUP Section/Unit/Division and
Programme staff by all partner municipalities.

37
Realizing the importance and appropriateness of RUPP’s urban development approach strategy
and its effectiveness in creating GUG and poverty alleviation in Nepal, Ministry of Local
Development (MLD) of HMGN has replicated RUPP using their own resources in additional 5
municipalities i.e. Lekhnath, Ratnagar, Prithvinarayan, Inaruwa and Itahari a year ago. Additional
22 municipalities are demanding for RUPP replication and HMGN is looking for resources to
implement RUPP in all 58 municipalities of Nepal. HMGN has also planned to replicate RUPP in 5
municipalities each year over the 5 years period of 10th five-year plan.

Replication of RUPP by HMGN in other municipalities and implementation of RUPP modality for
urban development is a very strong evidence for the success of RUPP in supporting partner
municipalities for GUG and poverty alleviation, which makes RUPP sustainable in every aspect.

Similarly, various training to enhance the capacity of local authorities, establishment of MDF,
institutionalization of TLOs, internal capital generation (saving) of TLOs, financial linkages with
other financing agencies and establishment of HRDC (Human Resource Development Centre) and
UIC (Urban Information Centre) are also proving facts for sustainability of the Programme.

2.5.4 Externalities

Positive impact: Realizing the key role played by RUPP in strengthening GUG and poverty
alleviation through rural urban linkages, MLD/HMGN is replicating the Programme in other
municipalities. In the same way, ADB funded UEIP has also adopted RUPP operational modalities
in 9 additional municipalities. Likewise, demands of RUPP replication from 22 other municipalities
come to HMGN.

In the absence of local elected representatives, partner municipalities have recognized & accepted
TLOs as a grass root level institution for performing its daily administrative and development
activities and for delivery of urban services to its citizen. The RUPP internalized in all 12-partner
municipalities as a Section/Unit/Division. TLOs are empowered to formulate, implement and
monitor development plans and programmes such as TDPs and EDPs. Similarly, other projects,
NGO/INGO and line agencies are also actively using TLOs for their programme implementation.

Internal capital generated (savings) by TLOs has reached NRs. 65,064,665.00 and 90 percent has
been mobilized as a matching fund for undertaking several socio-economic infrastructure and
enterprise development programmes. Even financial institutions have also started mobilize credit
through TLOs.

During the year, RUPP had a good opportunity to enhance partnership with private sector
institution like local CCI (Chamber of Commerce & Industry) by selecting CCI President as a
Chairperson of Partnership Development Committee (PDC) at the absence of local elected
representatives. RUPP also mobilized private sectors for the delivery of urban services and
development of urban infrastructures as a public private partnership.

NRs. 85 million has been revolved in the Municipal Development Fund. Entrepreneurs have
invested NRS. 92.2 million as equity participation for different enterprises and different socio-
economic development projects.

Similarly, Muslim Clerics, Mosques and Madrashas started their awareness initiatives on
HIV/AIDS.

Negative impact: Till date, all the expectations of the community have not been met. It has put
pressure on the Programme and municipal resources. Production enterprises are left out thus a
substantial portion of opportunity has not been harnessed. Large potentials of regional market
linkages have not yet harnessed.

38
3. Metro Naga Development Council – Philippines

3.1 Background

3.1.1 Location and Physical Features

The Metro Naga Development Council (MNDC) is a partnership of fifteen local government units
(LGUs) of Camarines Sur province composed of one (1) city and fourteen (14) municipalities. The
MNDC member LGUs are Naga City, Bombon, Bula, Calabanga, Camaligan, Canaman, Gainza,
Magarao, Milaor, Minalabac, Ocampo, Pamplona, Pasacao, Pili and San Fernando. Camarines
Sur province is about 420 kilometers (kms.) South of Manila and the biggest province in terms of
land area among the six (6) provinces of the Bicol Region.

Total land area of the LGUs comprising the MNDC is 122,098 hectares (has.). This is about 23.18
percent of the land area of Camarines Sur. The biggest and smallest municipality by land area is
Gainza and Calabanga respectively. Naga City alone has 7,748 hectares (has.).

As to income classification, Naga City is a 1st class city. Majority of the municipalities are 5th class.
There is one (1) 6th class, seven (7) 5th class, three (3) 4th class, two (2) 3rd class and one (1) 2nd
class municipalities.

MNDC has 317 barangays out of the 1003 barangays of Camarines Sur. Barangay is the smallest
political unit of the country. (Refer to Figures 3.1 and 3.2 for the map showing location of MNDC
and Table 3.1 for the details of income classification, number of barangays and land area by
LGUs.)

Table 3.1 Income Class, No. of Barangays and Land Area

by LGU

LGU Income Class No. of Brgys. Land Area

Naga City 1st Class 27 7,748
Bombon 5th Class 8 4,420
Bula 3rd Class 33 15,125
Calabanga 3rd Class 48 16,384
Camaligan 5th Class 13 1,300
Canaman 5th Class 24 2,471
Gainza 6th Class 8 1,821
Magarao 5th Class 15 3,901
Milaor 5th Class 20 2,341
Minalabac 4th Class 25 12,613
Ocampo 4th Class 25 11,833
Pamplona 5th Class 17 8,062
Pasacao 4th Class 19 14,954
Pili 2nd Class 26 12,625
San Fernando 5th Class 22 6,500
Total 330 122,098

39
 Figure 3.1
Location Map - Philippines

Figure 3.2
Metro Naga Development Council Location Map

40
3.1.2 Infrastructure Services

Road Transport

Metro Naga is traversed by 57 kms. of the Maharlika Highway and branching out from the highway
are national and provincial roads reaching out to each municipality.

The national and provincial roads are as follows:

• Bula Provincial Road leading West to Bula
• Fuentebella National Highway, which goes east to Ocampo 20 kms. away
• Naga-Calabanga Roads Northeast through the towns of Canaman, Magarao,
Bombon and Calabanga
• Naga-Gainza Road which dead-ends in Gainza
• Naga–Minalabac Road which turns West to Milaor and Minalabac
• Pamplona-Pasacao Road which dissects the Maharlika Highway with the West
bound for Pasacao and the East for Pamplona

The above highways are both distributors and collectors of traffic to and from the different points of
Metro Naga linking these areas to other population centres thru the Maharlika Highway.

Extending from these major roadways is the network of municipal and barangay roads linking the
municipalities and the outlying barangays to the main highway.

Air Transport

Metro Naga has one airport located at Pili, Camarines Sur which is around 10 minutes from Naga
City. Only two airlines, Philippine Airlines and Asian Spirit, are servicing the area.

Based on the Legazpi- Iriga-Naga-Daet Growth Corridor (LINDGC) Master Plan, there is a
proposal to expand the services of the Naga Airport.

Water Transport

The coastal towns of Gainza, Minalabac and Pamplona are serviced by motorized bancas to
connect to Naga City. A small wharf behind the Naga City Public Market is used by the bancas.

There are also two (2) seaports within Metro Naga. One is in Calabanga and the other is in
Pasacao. These seaports are used for handling cargo and passengers in some island barangays
of the said municipalities. There is also a fishing port located in Camaligan. In the LINDGC
framework, Pasacao Port is identified as one of the three major ports that would provide the
transport link for the Bicol Region.

Rail Transport

The Philippine National Railways (PNR) provides the rail transport service to Metro Naga to and
from Manila. The central PNR station is located in Barangay Triangulo, Naga City. Rail transport
from Manila extends to Legazpi City in the province of Albay.

41
 Figure 3.3
Metro Naga Road Map

42
Water Supply

Seven (7) water utility firms service metro Naga. These firms extend Level III services to
households of Naga City and other towns of Metro Naga except Milaor, Minalabac, San Fernando,
Bula, Pamplona and Gainza.

Level III water service is provided to only 96 percent of Naga City’s household, 50 percent in
Camaligan and Magarao and only 12 percent in Canaman. Canaman is one of the major sources
of ground water of the system.

Pili is serviced by the Pili Water District and source of water are springs tapped at Mt. Isarog. For
Calabanga, Bombon, Pasacao and Ocampo, only one-fourth (1/4) of their respective populations
are being provided with water service.

Mobile water distributors provide the water requirements of the poblacion residents of Milaor,
Minalabac, San Fernando and Gainza.

There are also communal systems (Level II) developed by The Department of Public Works and
Highways (DPWH) and by the local governments. Other sources of water are backyard wells, hand
pumps and a mountain spring.

Power Supply

Metro Naga is serviced by four (4) electric cooperatives in Camarines Sur. Camarines Sur Electric
Cooperative I (Casureco I) services Pamplona, Pasacao, San Fernando Gainza and Camaligan;
Casureco II services Calabanga, Bombon, Magarao, Canaman, Milaor, Minalabac, Pili and Naga
City; Casureco III services Bula and Casureco IV services Ocampo.

Four (4) substations of Casureco I and II are dedicated exclusively to Metro Naga towns. The
combined electrification program of the electric cooperatives extends to 95 percent of all Metro
Naga barangays. The remaining barangays without electricity are in remote areas of Pasacao,
Calabanga, Bula and San Fernando.

Communication Services

Metro Naga’s urban areas are serviced by Bayantel, Digitel, Smart and Globe.

Digitel covers Naga City and the nearby towns of Pili, Canaman, and Camaligan. The company
provides internet access in its telephone service enabling subscribers to hook to the web without
going through a separate internet provider.

Bayantel links all the 15 Metro Naga LGUs. LM Tel serves the towns of Magarao and Calabanga.
Bayantel also offers subscribers internet access through the Sky Internet.

Complementing the landline networks of Digitel, Bayantel and LM Tel are cellular phone giants
Smart and Globe each of which has a cell site tower in Naga and Pili.

Traditional telegraph and long distance services of RCPI and PT&T are also available in Naga City.
There is also the public calling offices of the Municipal Telephone Program and the Bureau of
Telecommunications (BUTEL), which are accessible and affordable to the Metro Naga residents.

Metro Naga is also serviced by six (6) cargo and courier firms

Health Services

43
Metro Naga has a total of 19 Main Health Centres with Calabanga having the greatest number with
three (3), followed by Bula and Pili, with two (2) each, while all the rest, including Naga City having
1 each.

Metro Naga has a total of 116 barangay health stations, with Naga City and Bula having 22,
followed by Calabanga and Pili with 11 each; Ocampo and Minalabac with 8 each; Pasacao with 6,
Camaligan and San Fernando with 5 each; Pamplona and Canaman with 4 each and Magarao and
Milaor with 3 barangay health stations each.

The total 135 combined health facilities of Metro Naga serving its 330 barangays means that 1
health facility services two (2) barangays for their health needs. The ideal situation is that every
barangay should have at least one (1) barangay health station.

Naga City is also home to the Bicol Medical Centre, formerly the Bicol Regional Medical and
Training Hospital and other private hospitals.

Education Services

Metro Naga has quite a number of public and private schools. There are 266 elementary, 52
secondary, seven (7) post secondary and tertiary schools including formal and non-formal,
technical and vocational education operated by the government.

Operated by private institutions are 33 pre schools, 22 elementary, 12 secondary and 28 post
secondary and tertiary schools, including formal and non-formal, technical and vocational
education.

The private schools are mostly situated in Naga City, Pili and Calabanga - the identified growth
centres of Metro Naga.

Naga City has been recognized as the centre of education in Metro Naga, Camarines Sur, and to
some extent, of the Bicol Region. Majority of the province’s finest educational institutions are found
in Naga City. Colegio de Sta. Isabel, Ateneo de Naga University, University of Nueva Caceres,
Holy Rosary Major Seminary, Bicol College of Arts and Trade, and The Camarines Sur High
School are located in Naga City.

Other notable institutions in Metro Naga are the Camarines Sur State Agricultural College, and the
Regional Manpower Training Centre under the administration of Technical Education Skills and
Development Authority (TESDA) both located in Pili. The Camarines Sur Institute of Fisheries and
Marine Sciences (CASIFMAS), under the Commission on Higher Education (CHED), is located in
Pasacao. CASIFMAS is offering secondary and tertiary education focused on various courses
related to fishery and marine resources. Calabanga is the site of the Calabanga Polytechnic
College offering secondary, tertiary, technical and vocational education.

Recreational Facilities

Movie houses, multipurpose pavements or halls that are usually used for sports festivals and other
social activities provide Metro Naga’s recreation facilities. There is also the plaza in each of the
LGUs of Metro Naga used as park, children’s playground and site for cultural and other festivities.
Most of the LGUs have one cockpit arena. Private entrepreneurs have also established other
recreational facilities such as resorts, picnic areas, computer shops, fitness gyms dance centres,
entertainment centres and other recreational facilities.

Solid Waste Facilities

Garbage generated by Metro Naga is disposed on designated open dumpsites in the LGUs with
the said facilities. LGUs without their own dumpsites dispose their garbage by open pit, burning,

44
composting, segregation, buying and feeding to animals or recycling. Of the 15 Metro Naga LGUs,
only eight (8) have garbage trucks and designated dumpsites.

To improve the garbage disposal system of Metro Naga, a study to put up a sanitary landfill to
service Metro Naga has been undertaken. The project has been submitted to the Regional
Development Council and awaiting approval and the preparation of detailed feasibility for possible
international funding.

3.1.3 Hierarchy of Settlements among MNDC LGUs

The MNDC Project Development Unit, in the preparation of the MNDC Physical Development Plan,
made an assessment on the settlement pattern and functional relationships of the 15 Metro Naga
LGUs and was able to establish hierarchy of centres among the LGUs.

Set of functions provided by the government and private sector were used and MNDC adopted the
functions applied by the Bicol River Project Office in coming up with a spatial analysis of the Bicol
River Basin area.

Based on the settlement function and considering the various services provided by each LGU the
following hierarchy of centres has been established for the Metro Naga LGUs.

Level I Naga City, also identified as a Primary Urban Sub-Regional Centre

under the National Urban Development and Housing Framework (NUDHF), is
categorized in this level. The City has all the amenities and infrastructure to
perform economic, administrative, educational, religious and recreational
functions.

Naga City’s influence extends over the entire Metro Naga area. Its
influence comes from its array of ubiquitous settlement functions and its
accessibility by land, river or rail, making it an integral part of other Metro Naga
localities. A strong consumer base emanating from its own residents and those
from the outlying areas further bolsters its primacy. The City exercises a
considerable demand for consumer goods anywhere in the region. It is where
agricultural products congregate and the Naga City Public Market becomes the
wholesale market for farm products from other towns. Complementing the public
market are satellite markets in the urban periphery and in the city’s upland
barangays servicing outlying communities but the source of their goods and
wares still come from the Naga City Public Market.

The presence of various commercial establishments, service outlets,

professional offices, hospitals, schools, churches and recreational facilities
makes the City a busy area in the daytime causing daytime population to
double.

Enhancing the City’s primate role is excellent access from any part of
Metro Naga to Naga City. The Maharlika Highway links Naga to the town
centres of Pili, Milaor and San Fernando while concrete provincial and
secondary national roads branching from the Maharlika Highway links up with
the other towns. River boats plying the Bicol River brings the riverine
communities of Calabanga, Pamplona, Bombon, Magarao, Canaman,
Camaligan, Gainza, Milaor and Minalabac to the city while skates and the PNR
connect the inland communities of Pamplona, Gainza, Milaor, Pili and Bula to
the city.

Because of the proximity of Milaor, Camaligan, Canaman, Magarao and

Bombon to Naga City, these municipalities are deemed part of the Primary

45
 Urban Sub-Regional Centre. For this reason, the development of their own
central business districts has been precluded. All the municipalities serve as
satellite residential areas of Naga City and their residents share in most of the
urban services Naga provides. The five (5) municipalities are classified under
Level Ib.

Milaor, Camaligan, Canaman, Magarao and Bombon are only 15

minutes away from Naga City. These towns have very limited market exchange
centres, and consequently, very rudimentary poblaciones, a condition shaped by
their closeness to Naga City. Farmers of these towns bring their produce to the
City and residents go to Naga for their consumer products and other services.
As a result, these municipalities have barely defined town centres and very
limited trade and service functions. The dominant functions are administrative
and religious represented by their town hall and parish church. Private
enterprises are also available but in very limited clusters dispersed thinly in the
town’s residential areas.

Proximity to Naga City coupled with improved farm-to-market roads,

some of which link their rural communities direct to the city via an upland
network of concrete roads, plus the proliferation of mobile traders who go direct
to the farms to buy local produce and livestock, mitigate the absence of fully
developed market centres in these towns.

The expanding landline network of various communication companies

and the extended reach of the cellular phone networks are also reasons why
exchange and service centres in the town’s poblacion are not fully developed.

Level II Pili, classified as Secondary Urban Centre in the NUDHF, belongs to this
level since it performs area wide functions covering the south-eastern portion of
Metro Naga. Bula, Ocampo and other parts of the Partido and Rinconada areas
are beneficiaries of services provided by Pili.

Pili is performing urban functions same as Naga and serves as a central

exchange centre servicing the towns of Bula, Ocampo and outlying communities
in the province’s Southeast quadrant. Farm products are traded in quantities
and farm inputs and other commodities are available in Pili, as well as urban and
recreation facilities at affordable and modest price.

The town has a private and government hospital, the latter catering to
mental cases, seven (7) private clinics, a theatre with daily runs, and an
assortment of recreational facilities at the provincial capitol compound. It has
also an agro-processor that has integrated its operation by venturing into oil
milling on top of its rice milling and trading operations. The presence of this
agro-processor enterprise ensures a year-round market for copra and grains,
and an adequate supply of rice and coconut in the province. Pili is also home to
the region’s sole sugar central and hosts a number of other enterprises which
serve as a ready market for a number of agricultural products within Metro Naga
and surrounding municipalities.

Level III The towns of Calabanga, Pasacao, Bula, Pamplona, Ocampo and
Minalabac, considered as minor urban centres in the NUDHF, are categorized
under this level. Each LGU has defined central places with varying degrees of
functions and services mostly servicing coastal, riverine and railway
communities.

Ringing Metro Naga are the towns of Calabanga, Pasacao, Bula,

Pamplona, Ocampo and Minalabac. Pasacao and Bula are coastal towns facing

46
 Ragay Gulf, which opens to China Sea. Calabanga is also a coastal municipality
facing the Pacific Ocean thru San Miguel Bay. Minalabac lies along the Bicol
River and so does Pamplona, across which also cuts the railroad. These five
towns are transfer stations from one mode of transportation to another. Given
their unique function, they evolved markets and central functions of their own,
their complexity in proportion to their distance from Naga City and the size of the
communities they serve. Ocampo, the sixth town is not a transfer station but
owing to its distance from the city and the large farming communities under its
influence, it too developed its own market and a host of central functions.

Table 3.2 Hierarchy of Centres

LEVEL FUNCTIONAL CHARACTERISTICS

LGU

Level I Naga City Performs primarily commercial, marketing

and administrative functions service the
entire Metro Naga area
Contains the largest market thru which
selected agricultural commodities are
exported to Manila and other areas and thru
which nearly all periodic markets in the area
with external trade linkages exchange
their goods
Trade linkages with other towns, provide an
institutional exchange network needed to
stimulate agricultural productivity in the rural
hinterlands
Contain most of the higher level
communication, economic, recreational,
administrative and marketing functions
But Naga performs few secondary (industrial
or manufacturing) activities and offer no
significant basis for inter-regional trade

Level I-B Milaor Performs primarily residential functions

Camaligan No central places
Canaman
Magarao Performs area-wide functions (Bula, Pili and
Bombon Partido area)

Level II Pili Performs area-wide functions (Bula, Pili and Partido area)
Performs commercial, administrative, marketing, recreational function
Serves as complementary centre to Naga City

With central service centre performing area-wide functions catering to their

barangays and, for coastal and railroad towns, to neighbouring
Level III Calabanga communities
Pasacao Tend to be within the influence area of Naga City
Bula
Pamplona
Ocampo
Minalabac

Residential and Non-Central sporadic service centres with periodic

Level IV San Fernando markets located at road junctions
Gainza Highly-localized

Calabanga is around 30 minutes from Naga City by public transport. It

has a well-defined poblacion where trade and commerce takes place and where

47
 basic urban services can be found. The poblacion’s clientele are largely
residents of the town’s 30 barangays, its coastal communities along San Miguel
Bay and, to a lesser extent, the residents of next door neighbour Bombon. The
town has a theatre with daily runs, a wide variety of commercial establishments,
grains and copra traders, terminals of public transports bound for Naga City,
Tinambac and Metro Manila, three (3) petrol stations and a number of rural
banks. It also has a large public pavilion that caters to various social and official
functions.

Calabanga, as a tertiary urban centre brings important urban services

and commodities to its residents and to those in neighbouring communities. Its
accessibility to coastal and upland communities makes it an important market for
locally grown crops, for marine and aquaculture catch, and for livestock bound
for consumers in Naga City and other urban centres. Its fishing village, Sabang,
is the landing point for fish catch from San Miguel Bay.

Pasacao is more modest than Calabanga in terms of urban functions.

With a poblacion hemmed in by the sea and a rocky mountain range, its urban
functions and services are confined to a small network of built-up area extending
from the town hall and the church to the poblacion proper. It has a bustling
public market catering to the needs of its rural clientele and doubling as an
exchange centre for marine products caught in Ragay Gulf and surrounding
waters. It has one (1) gasoline station but the town has three (3) oil depots.

The town is serviced by national, municipal and a number of private ports

which serve as transhipment points for grains, sugar, coconut pellets and other
agricultural crops, construction materials and various finished products. The
town is also a favourite summer destination given its resort-lined beaches with
Spartan and affordable amenities. There are communication facilities provided
by PLDT and Unitel.

Bula is contiguous to Pasacao and both are along Ragay Gulf but to
reach either by land, one has to go to opposite directions- from Naga City. The
poblacion of Pasacao is right along the coastline giving its market the benefit of
extended access from land and sea. In contrast, Bula’s town centre is located
some 10 kilometers inland and one has to cross mountainous terrain to reach
the poblacion from the sea.

Bula is a rice-producing municipality with nearly three-fourths (3/4) of its

6,883.29 hectare land area devoted to palay. The rest of its agricultural land is
planted to root crops, coconut, corn, legumes, vegetables, fruit tree and abaca.
The Bicol River and tributary creeks that crisscross the town plus the Lake
Baao-Bula that expands during rainy season are its fishing grounds. The town
has a public market and various commercial establishments located in the
poblacion where the church, municipal hall and a town pavilion are also situated.
The poblacion serves as the exchange centre for local produce, farm inputs and
basic household commodities. Large volumes of produce however, are brought
to Pili or Naga.

Level IV San Fernando and Gainza are satellite municipalities under the NUDHF.
Both towns have no developed central places at their respective town proper.
Economic and other activities take place at road junctions servicing nearby
barangays. The town proper of these towns are primarily residential and the
residents go to Naga City for the other urban services.

San Fernando and Gainza have sporadic localized markets located at

road junctions that service its barangays. The town centres are primarily

48
 residential and are serviced by sari-sari and grocery stores. They rely on the city
for their major needs. The junction markets are periodic and very rudimentary in
nature. They serve as conduits for basic household items with farming
communities as their main clientele. Their existence contributes better access by
rural households to basic and essential commodities.

Both towns have their town hall and parish church located in the
poblacion. Communication facilities are available through landline and cell
phones.

3.2 The Metro Naga Development Council

3.2.1 Formation of the MNDC

1st Gulf War in 1991 caused fuel shortage that necessitated rationing of petroleum products all over
the country. Since most of the fuelling stations were located in Naga, then City Mayor Jesse
Robredo convened the mayors of the adjacent towns to discuss the establishment of systems and
procedures for rationing fuel among their LGUs. The scheme they had developed kept the vital
services running throughout the crisis.

The positive result of this initial meeting paved the way for LCEs to again gather and discuss the
problems brought about by the devolution of powers to the LGUs. Informal meetings were held
between Naga City and its surrounding municipalities basically to discuss how Naga has adjusted
to the changes and problems brought about by the implementation of the LGC and how the
municipalities could do the same.

These informal gatherings led to better relations of the LCEs. Eventually, meetings were also held
to discuss other issues and concerns common to the LGUs, one of which was the inequality in the
attainment of benefits and privileges of the senior citizens. The municipalities aired their problems
to Naga and requested that their elderly also be included as beneficiaries in the City’s agreement
with establishments and companies. The City agreed to do so and declared that the municipalities’
elderly be given the same benefits/privileges the Naga elderly citizens were enjoying. However,
this did not bring the intended result because companies and establishments did not readily give
discounts to the municipalities’ without the proper documents/identification stating that they were
indeed covered by their agreement with the City. This prompted Naga and the municipalities to
form Metro Naga Senior Citizens’ League to be able to produce a common card for the senior
citizens of Naga and the 12 other municipalities, and for all of them to be accorded the benefits and
privileges prescribed in the Senior Citizens Law.

Another concern that the LGUs had, particularly the municipalities, was the unavailability of
equipment and machineries to use in the creation and improvement of infrastructure facilities.
Naga, which was then the only LGU that had all the needed equipment, agreed to let the
municipalities borrow the same without charging fees for their use, except when damages were
incurred. However, this posed a problem to the City as they had to justify to the Commission on
Audit (COA) the extent of deterioration of their equipment and machineries. So for Naga to be able
to justify the lending of the City’s property to the municipalities, the Metro Naga Equipment Pool
was formed.

It was after these developments that questions on the legality of the LGUs’ cooperation were
raised. However, provisions of the then recently-implemented Local Government Code allowed
such cooperative undertakings between LGUs.

Having had the issue on the legality of the LGUs’ cooperative undertaking settled, the crafting of
the Memorandum of Agreement (MOA) creating the Metro Naga Development Council soon
followed. It was signed on April 23, 1993 by the 13 LGUs – Naga, Bombon, Calabanga,
Camaligan, Canaman, Gainza, Magarao, Milaor, Minalabac, Pamplona, Pasacao, Pili and San
49
Fernando, with the approval of their sanggunians (local councils). Naga City’s Mayor then, Jesse
Robredo, was elected as the Chairman of the Council since Naga City is the carrier LGU.

For the MNDC to attain a stronger legal personality and for it to be able to solicit additional funds
from the national government, the Council lobbied for the issuance of an Executive Order (EO)
establishing it. In June 18, 1993, EO No. 102, entitled “Creating the Metro Naga Development
Council,” was signed by then President Fidel V. Ramos. This EO strengthened the formation of the
MNDC, describing it as a body with functions, powers and responsibilities patterned after Regional
Development Councils (RDCs) and providing it with the an initial budget of P 500,000 from the
President’s contingent fund and stating that the annual operating expenses of the MNDC be
included in the General Appropriations Act (GAA) after consultations with the Department of
Budget and Management (DBM).

An important factor in the membership of the LGUs is the approval of their respective sanggunians
(local councils). Unless the sanggunians agree to let their LGUs be part of the MNDC, their LCEs
could not make representations in the Council. This was what prevented the municipalities of Bula
and Ocampo from taking part in the initial MOA and the EO because their membership to the
Council was controlled by their sanggunians. It was only after seeing and understanding the
objectives and benefits of their membership in the Council through discussions and explanations,
were Bula and Ocampo allowed by their sanggunians to enter into a MOA with the existing MNDC
members in July 1997.

3.2.2 Main Stakeholders and target groups

Member-LGUs

The MNDC was initially composed of 13 LGUs. Eventually, the municipalities of Bula and Ocampo
joined the Council making the total add up to 15 members.

Naga, as the only city in the Council, serves as the carrier-LGU. As such, it spearheads the
Councils efforts particularly in the pooling resources and the sourcing of funds to channel to the
Council’s PPAs.

The municipalities as component LGUs of the Council, that initially relied heavily on Naga’s
facilities and services that are extended to them, have somehow progressed in terms of their
income and in their capacity to provide the services to their constituents. Aside from these, they
have now graduated from being heavily dependent on Naga especially in the physical resources
like the equipment, for they now have their own equipment to share to the Council’s equipment
pool.

The municipalities’ specific economic roles have also helped in providing for a more structured
economic development plan for the whole Metro Naga.

Constituents/residents Metro Naga LGUs

The MNDC has so far been able to somehow effect positive changes in the lives of the
constituents of its member LGUs particularly the municipalities who, prior to the formation of the
MNDC have experienced being deprived of some of the basic services and facilities. The
membership of their LGUs in the MNDC has somehow led to the alleviation of their condition, with
the programs that enable LGUs to provide the needed services that have ultimately contributed to
the improvement in the lives of their constituents.

To be able to further provide the Metro Naga constituents with more benefits, the Council is
presently undertaking steps to put in place the Metro Naga People’s Council to enlist their greater
participation in the processes and activities in the Council, since the their role in the PPAs have so
far been limited to being mere recipients and beneficiaries of the projects. With the enactment of

50
the Metro Naga People’s Council, this would give the individual constituents and also their groups
and organizations greater participative roles in the processes of planning, and implementation of
the PPAs.

NGAs

The NGAs role in the MNDC has been limited to the planning and implementation processes and
funding of some of the PPAs of the Council. Although the EO provides that technical assistance be
provided by the NGAs when the Council needs it, they cannot simply participate in the processes
of the MNDC unless they are invited to do so. As such, the NGAs assistance is solicited on a case-
to-case basis.

NGOs

The NGOs/POs’ participation in the Council, like the NGAs, have been limited to the planning,
implementation and funding of certain PPAs of the Council. They are likewise invited to participate
in the activities of the Council when it is perceived that their assistance would greatly contribute to
the success of the PPAs.

At present, the NGOs/POs are enthusiastic in getting involved with in the activities of the MNDC,
probably due to the accomplishments of the MNDC through the years of its existence. However,
this enthusiasm was not always extended towards the MNDC, primarily because of the pessimistic
views they had about the sincerity of some of the LCEs involved in the Council, and vice versa. It
was only after seeing the sincerity of the Council’s members and the genuine desire to bring about
development in Metro Naga through the persistence in implementing PPAs despite the numerous
difficulties encountered, that the NGOs/POs started to positively respond to the invitations of the
Council for them to participate in the planning and implementation of the PPAs. Aside from this, the
NGOs have also become one of the sources of funding for the Council, as others tend to have
greater resources than the Council and are willing to support some of the PPAs.

Foreign institutions

The MNDC has already forged partnerships with numerous foreign institutions which have
extended both technical and financial support that have been instrumental in the development of
mechanisms and implementation of the Council’s PPAs.

Now that the MNDC intends to start the implementation of its long-term projects, these foreign
institutions are once again being tapped by the Council to assist in the said PPAs.

The funding given to the Council by a foreign institution has enabled the MNDC to
conduct the first Strategic Planning Session in 1998, which the Council was not able to
implement prior because of the lack of funds to support the activity.
The Strategic Planning Session has since become an integral part in the planning
process of the Council and is now regularly conducted every three (3) years.

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 List of national government agencies (NGAS) and Non-Governmental
Organizations (NGOs) that have been involved in the PPAS of the
MNDC

NGAs
• National Economic and Development Authority (NEDA)
• Department of Trade and industry (DTI)
• Department of Agrarian Reform (DAR)
• Department of Environment and Natural Resources (DENR)
• Department of the Interior and Local Government (DILG)
• Department of Agriculture (DA)
• Department of Public Works and Highways (DPWH)
• National Irrigation Administration (NIA)

NGOs
• Association of Barangay Captains of Naga City
• Barangay Leaders and Officials on the Move (BLOOM)
• Camarines Sur NGO-PO Development Network, Inc.
(CADENET)
• Canadian Urban Institute re: Institutionalization of the Metro Iloilo
Development Council
• Care Philippines, Inc.
• Center for Asia Pacific Women in Politics (CAP-WIP)
• Center for Community Development Office (CCDO)
• Community Development Foundation, Inc. (CDFI)
• Community Organization for Philippine Enterprise (COPE)
• FRIEND, Inc
• Harnessing Self-Reliant Initiatives and Knowledge, Inc. (HASIK)
• Movement for Accelerated Development Efforts in Bicol, Inc.
(MADE)
• Naga City Council for Women
• Naga City People’s Council (NCPC)
• PAG-BICOL
• Pambansang Kilusan ng mga Samahang Magsasaka
(PAKISAMA)
• Philippine Partnership for the Development of Human Resources
in the Rural Areas (PHILDRRA)
• Sentro ng Alternatibong Lingap Panlegal (SALIGAN)
• TALINGKAS Bicol Foundation, Inc.
• Wheels for Humanity (USA) through the Missionaries of the Poor
Sisters

3.2.3 Development Strategies of the MNDC

The MNDC has adopted the Metro Naga Development Program (MNDP), whose overriding
objective is the improvement of the quality of life within Metro Naga through the generation of more
jobs and higher income for its residents and improved delivery of services by its component LGUs.

To achieve this objective, the MNDC will seek to channel/distribute the efforts of the component
LGU and the national government, the private sector and external institutions towards a unified
development program, taking into account the peculiar resource endowment and comparative

52
advantages inherent in each LGU within the framework of the country’s Medium Term
Development Plan (MTDP).

In the short term, it seeks to hasten the flow of external resources towards vital infrastructure
projects, and facilitate the sharing of resources and coordination in the implementation of
commonly beneficial programs, projects and activities and draw immediately available funds from
the national government, foreign institutions and private non-government organizations.

More jobs and higher income cannot be achieved if MNDC will continue to rely solely on
agriculture since this industry cannot provide adequate year-round employment.

To address this problem, the MNDP proposes the establishment/enhancement of the processing
and small-scale manufacturing sector with the capability to generate employment. The planned
processing/manufacturing sector is envisioned to be labour intensive with strong backward
linkages where source of raw materials will come from the Metro Naga LGUs.

The MNDP’s strategy for agriculture is two-pronged: integration and diversification

Integration is expanding the role of the farmers beyond tilling the soil to farm inputs and the
processing, storing and marketing of their produce. This can be done by accessing credit
facilities from various government financial institutions to finance corollary projects.
Agriculture cooperatives shall play a major role in the implementation of this strategy of
integration.

Diversification, the second agricultural strategy, intends to open new opportunities

unavailable from traditional crops. Other crops which offer higher returns will be promoted
since many non traditional crops fetch a premium in domestic and export markets
promising greater returns to farmers. Example is cut flowers, which has high demand in the
export market.

With the development strategies for Metro Naga, each LGU has a specific role to play support the
overall development of the area.

3.2.4 Development Roles of the LGUs

Naga City and other Municipalities will complement the needs of the manufacturing industry by
providing the required resource inputs (labour and raw materials), allied services (banking and
finance, transportation, housing, health, recreation and education services.

On LGUs’ specific roles, Naga City will primarily concentrate in the trade and services sectors
supplying Metro Naga with consumer goods and services, manufactured inputs, banking and other
professional services. It will also continue to be the regional entrepot linking Metro Naga with the
rest of the region and the country.

San Fernando, Pasacao and Pamplona, because of their hilly terrain, are ideal for the cattle and
dairy industry. Upgrading Pasacao port will make the municipality one of Metro Naga’s gateway to
major domestic and foreign markets.

Bombon and San Fernando’s spring sources shall be developed to provide potable water for their
residents. Same with Naga City’s Panicuason, which is a source of surface water.

Milaor, which is accessible through the national highway, is an ideal site for warehouses and bulk
storage. Camaligan and Canaman will basically absorb the spill over residential population of Naga
City. Camaligan’s modern fishing port, ice plant and storage facilities can form the foundation for a
fish processing industry.

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 Development Roles of Metro Naga LGUs
LGU Development Role
Business, education, and cultural centre; base of operations for firms
Naga City
that want to tap the potentials of the regional markets
Bombon Primary food bowl; water resource development
Bula Primary food bowl; Industrial estates
Calabanga Primary food bowl; fishing industry development
Camaligan Primary food bowl; residential
Canaman Expansion area for middle class housing
Gainza Auxiliary food supplier; handicrafts development
Magarao Primary food bowl; handicrafts development
Milaor Warehousing and bulk storage centre; potable water source
Minalabac Auxiliary food supplier; potable water source
Ocampo Primary food bowl; handicrafts development; cattle& dairy industry
Pamplona Industrial estate development; cattle and dairy industry development
Gateway to major markets through the Pasacao Port; cattle and
Pasacao
dairy industry development; fishing industry development
Pili Secondary trading centre; agro-industrial development
San Fernando Cattle and dairy industry development; water source development

Magarao, Bombon and Calabanga can be considered as the primary food bowl of Metro Naga,
with Gainza, Minalabac and the upper barangays of Naga City as auxiliary food crop suppliers.

Gainza’s budding handicraft enterprises should be given more support in terms of financing, design
and marketing to turn it into a full-fledged industry.

Calabanga and Pasacao will continue to be the main source of fresh fish for Metro Naga. These
coastal towns can also venture in dried fish and fish by-products industries.

Pili, the site of the lone airport in the province, will be Metro Naga’s air link to the major centres of
the country. It is also a major trading centre next to Naga.

Tourism industry in Metro Naga could well be a year-round activity because of the various natural
and man-made tourist attractions and activities in the area. Metro Naga has the Pasacao Beach,
Minalabac beach and Mainit spring, resorts and waterfalls in Naga City and the annual Peñafrancia
festivities in September and the Kamundagan festival in December.

3.2.5 Problems Addressed

Incapacity to deliver to basic services and facilities

The Philippine Constitution states that LGUs should enjoy autonomy and this is embodied in
Republic Act No. 7160, better known as the Local Government Code of 1991 (LGC), which gives
LGUs extensive powers, authority and responsibility over their territories.

Part of such empowerment is the delegation of the responsibility to provide basic services and
facilities, previously shouldered by the national government agencies, and the responsibility to
absorb the personnel of the national agencies whose functions have been devolved to them. This,
however, presents a paradoxical dilemma for LGUs, especially to those belonging to the low-
income classes. Although it provides/gives them greater freedom and power to do things on their
own, it also gives them responsibilities they may not necessarily be capable of fulfilling.

In the case of the member-municipalities, who prior to the formation of the MNDC belonged to the
5th and 6th income classes, this entails dividing their scarce financial resources between essential
services and equally important personnel services. In which case, the latter almost always bears

54
the grunt of the problem. Examples of the effects this problem can be seen in the areas of
infrastructure development and provision of health services.

Majority being agricultural areas, essential farm-to-market-roads, though present in other areas,
are still demanded in others primarily because of the lack of funds to finance such projects. Some
farmers are forced to transport their goods to Naga City or Pili where these and other products are
sold. This lack results in the limiting of the opportunities for farmers of other LGUs to ply their
produce, thereby also limiting their income.

In the area of health services, municipalities each have their own rural health centres but such are
not always enough to cater to all their residents’ needs since not all are equipped with the facilities
because of the lack of funds. Residents are therefore forced to go to Naga and other areas where
there are medical facilities that are able to answer their needs.

The lack of garbage disposal facilities of majority of the MNDC member-LGUs is also a problem
primarily due to the insufficiency of financial resources. With the very high cost of establishing their
own solid waste disposal facilities recommended by the national government, the LGUs only
maintain open-dumpsites. Some of these LGUs still do not have their own garbage trucks for
collection. As such, most residents resort to garbage disposal techniques like burning, burying,
recycling and dumping in open lots not prescribed by their LGUs.

To augment their income, LGUs are given the freedom to source out funding for their activities
through a variety of ways, one of which is to present such need to the Representatives in the
Houses of Congress. Congressmen and Senators, through their so-called “pork barrel funds” can
channel funds to the LGUs’ programs, projects and activities (PPAs). This, though, is not reliable
as it mainly depends on the availability of funds of the national legislators and the effectivity of the
LCEs’ lobbying tactics.

Another way by which LGUs source out additional funds for their PPAs is through grants, aids and
loans from local and international institutions. These though are equally unreliable as LGUs’
requests for such are not always granted, while some are apprehensive to engage in loans
because monetary institutions like banks, sometimes ask for the LGUs’ IRA as collateral for their
loans.

LGUs also have the option to coordinate with other LGUs in certain projects and endeavours. Prior
to the formation of the Council, municipalities of the Council borrowed Naga City’s equipment to
implement PPAs for infrastructure improvement/development, i.e. road construction.

Planning without much regard to development effects to other LGUs

Naga City, prior to the establishment of the MNDC, always planned its development strategies
without putting much attention to the involvement of its neighbouring municipalities. This, however,
had debilitating effects on the city’s capacity to provide its residents basic services and facilities.

In the late 1980s and early 1990s, Naga’s major thrust to induce economic progress was to attract
investors into the city. To implement such, the city government devised plans that concentrated on
improving the city’s conditions – facilities and environment; and in doing so, Naga succeeded in
attracting investors. This opened numerous business and employment opportunities, and therefore
economic prosperity to its residents. As a result of this, people from neighbouring municipalities
flocked to Naga to take advantage mainly of the employment opportunities available. This in turn
led to uncontrollable migration to the city and created great pressure for the City to cope with the
increasing demand for services, in the process, depleting its vital resources.

The municipalities, who prior to the formation of the MNDC belonged to the lower income classes,
on the other hand experienced shortage in human resources essential in their efforts to attract
investors to their LGUs.

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This problem forced Naga to restructure/reform its strategies to include spilling the effects of
development to its neighbouring municipalities primarily to lessen the economic disparity between
them and thereby contain problems brought about by uncontrolled migration both to the city and
the municipalities.

It was also during this time that the Naga City Government came up with the idea of an alliance
between the city and its neighbouring municipalities through a “Metro Naga” but did not know how
to initiate the steps to coordinate with the other LGUs without offending them by giving them the
impression that they could not manage their own problems.

Inequality in the availability of benefits for the elderly

The Philippines’ Senior Citizens’ Law (Republic Act No. 7432) provides that certain benefits and
privileges like discounts in medicines, food and travel fares, be given to the elderly citizens.
However, not all the intended beneficiaries of the law are accorded the said benefits/privileges.

In order to ensure that its elderly constituents are given the benefits/privileges due them, Naga City
even prior to the formation of the MNDC, had required drugstores and other companies to comply
with the provisions of the law in order for them to acquire the necessary permits from the city
government. Naga’s senior citizens were also given identification cards that served as proof of their
being citizens of the city, which upon presentation in establishments, enabled them to avail of the
privileges they were supposed to enjoy. This proved be effective as the Naga elderly were
accorded said benefits in all city establishments.

However, elderly residents of other municipalities were not able to avail of such privileges
especially in drug stores/pharmacies, most of which were located in Naga, the reason being the
municipalities’ lack of ordinances/resolutions requiring the said establishments to give their elderly
the privileges/benefits as prescribed in the Law and well-defined sanctions/punishments for their
non-compliance to it. As such, the elderly constituents of the municipalities complained about the
uneven implementation of the law. The municipalities’ actions, on the other hand, were limited to
airing their grievances to the companies but such did not bring the needed solution to the problem.

3.2.6 Effect of MNDC on rural-urban linkages

The MNDC has, through the alliance of its component LGUs, activated the following rural-urban
linkages:

Physical Linkages

• Roads connecting all LGUs to each other, and those connecting the municipalities to
Naga City have been activated, primarily for the transportation of people to and from
other municipalities and the transportation of goods/produce to places where they are to
be sold.

• Waterways are likewise used as an alternative for transporting LGUs’ residents and
their goods/produce, also putting to active use the ports in Metro Naga.

The Maharlika Highway links Naga to the town centers of Pili, Milaor and
San Fernando, while concrete provincial and secondary national roads
branching from the Maharlika Highway link up with the other towns.

River boats plying the Bicol River bring the riverine communities of
Calabanga, Pamplona, Bombon, Magarao, Canaman, Camaligan,
Gainza, Milaor and Minalabac to the City.

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Economic Linkages

• Each member-LGU is assigned a specific role in the development of Metro Naga

determined through examination of the LGUs’ existing industries, infrastructure,
available resources and development potentials. These roles were identified primarily to
complement the strengths and weaknesses of the LGUs and to promote balanced
growth within the Metro Naga.

• Majority of the member-LGUs have very limited market exchange centres. Therefore
serving as Metro Naga’s main exchange centres are Naga and Pili where farm products
from the LGUs are sold.

Population Patterns

• Naga City remains to be the base of business, education and cultural activity. As such,
Naga’s population is still the biggest among the MNDC members. However, there has
been a slight decrease in the City’s growth rate for the years 1990-2000. This may be
attributed to the conversion of Canaman into an alternative residential area for the
residents/workers of Naga.

Prior to the formation of the MNDC and the determination of the roles of
the member LGUs, residents chose to stay within Naga despite the high
rate of rent/taxes. However, with the identification and promotion of
Canaman’s role as an expansion area for middle-class housing because
of its proximity to the City, Canaman has since experienced significant
increase of its population because of the in-migration of ‘new residents’
into the municipality.

Technological Linkages

• During the early years of the MNDC when availability of telecommunication systems like
telephones and cellular phones were not as prevalent as the present, the MNDC
provided its members the use of two-way radios that served as the communication link
of the LGUs.

Through the Metro Naga Emergency Rescue Service, initiated in the

early years of the Council when cellular phones were not as
widespread as now, radio communications equipment were installed in
all the Metro Naga LGUs. This facilitated the deployment of
ambulances and firetrucks in case of emergencies.

• At present, with the prevalence of both land and mobile phones, all of Metro Naga now
has access to communication facilities. Meanwhile, main cell-sites and offices of these
services are still located in Naga City.

Social Interaction Linkages

• The Council paved the way for the formation of a confederation of associations for the
elderly of its member-LGUs, specifically through the Metro Naga Senior Citizens
Program.

• Through its PPAs, the MNDC has also provided for the interaction of various
organizations, i.e. in the conduct of medical missions where organizations of medical

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 professionals from the different LGUs work together, involvement of some NGOs/POs
in the planning and implementation of the Council’s PPAs

Service Delivery linkages

• Transportation services in the Metro Naga area is being coordinated by the MNDC.
Identification/determination of the locations of terminals for public utility vehicles and
their routes are consulted with the Council as this affects all the residents in the Metro
Naga area

• To augment the medical services provided by the LGUs, the Metro Naga has been
providing support through PPAs i.e. the Metro Naga Emergency Rescue Network and
the conduct of medical missions, to all its member-LGUs.

One of the initial programs of the Council, the MNDC Emergency

Rescue Service, extends assistance to Metro Naga LGUs that do not
have their own fire protection and ambulance services.

Political, Administrative and Organizational Linkages

• The formation of the MNDC has necessitated that certain activities of each member-
LGU be subjected to prior consultation and coordination with the other members. Such
activities include the planning, implementation of PPAs and issuance of certain
ordinances/resolution as these may have direct or indirect effects to the other LGUs
and to the plans of the Council itself.

• The MNDC itself also passes memoranda of agreement, resolutions that aim to
resolve/respond to issues and concerns of its member LGUs, i.e. inter-municipal police
activities, environmental protection, boundary disputes, solid waste disposal.

3.3 Long term impact of the MNDC

3.3.1 Development Mechanisms for Member-LGUs

The MNDC has provided development mechanisms for its member LGUs. It has provided for the
(1) cluster planning of the LGUs that has helped enhance and focus economic and development
plans; (2) resource pooling that has increased capacity of LGUs to improve in certain areas; and
(3) better access to opportunities for capability-building that has helped LGUs become more
efficient and effective.

Cluster planning for LGUs

• Individual planning of LGUs sometimes have negative effects, as experienced by Naga

who, by formulating and implementing development plans without considering its effects
to the other municipalities, experienced negative repercussions of urban migration and
caused the draining of human resources of the municipalities essential to the attraction
of investments.

• Planning based on the roles of the LGUs in the whole of Metro Naga is also enhanced,
providing for more concentrated development and economic plans. Canaman, for

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 example, is now formulating its plans in consideration of its role as the expansion area
for middle-class housing, owing to its proximity to Naga City.

Resource pooling

• In the pooling of financial resources through the common fund and the distribution of
project assistance, member-LGUs especially those belonging to the lower income
classes benefit greatly because they are given additional resources to channel to
necessary PPAs that otherwise could not be implemented because of the lack of funds.

• Those belonging to the lower income classes generally receive a greater amount than
what they contribute to the common fund. The municipality of Gainza, for example,
received an amount almost double than what it has contributed to the common fund in
the year 2002. Such would greatly help the municipality channel additional support to
PPAs that lack funding.

• Equipment pooling, on the other hand, has helped the LGUs in the
improvement/development of their infrastructure especially during the early years of the
Council when all the member-LGUs did not have all the necessary
equipment/machineries except for Naga. With the City’s equipment, the member-
municipalities were able to implement projects without them having to buy or rent such,
which could have cost them much and probably could have inhibited them from doing
the projects that they have succeeded in implementing.

• Now that almost all of the member-LGUs have acquired their own equipment, LGUs
now have more equipment available for their use this could hasten implementation of
projects even more.

Better access to opportunities for capability-building

• To improve the capability of its members, the MNDC has been providing seminars and
workshops to officers/members of LGUs targeted to improve their technical capability
specifically in the area of development planning. So far, the Council has facilitated the
conduct of a number training seminars and workshops for MPDOs of the member-LGUs
to assist them in their preparation of their Comprehensive Land Use and Investment
Plans.

3.3.2 Equity in the Distribution of Benefits among its Members

The MNDC has, in a way, provided for the equal distribution of benefits among its members. One
such way by which the Council does this is by distributing to the member-LGUs equal amounts of
project assistance regardless of their contributions to the common fund.

Another way the Council does this is by giving its members equal opportunities to avail of the
services that the Council offers through the PPAs. An example of such is the implementation of the
Council’s Water Project aimed at improving the water service facilities of the member-LGUs by
providing Level-1 pumps. In the said project, some of the LGUs did not avail of the said pumps
since they already good water service facilities. Nevertheless, all of the member-LGUs were given
the opportunity to avail of the equipment.

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3.3.3 Observed Benefits of the Development Mechanisms and PPAs

• Cluster planning has resulted in a more structured development plan for the LGUs of Metro
Naga

The cluster planning of the member-LGUs has led to the identification of their
development roles in the whole of Metro Naga. This has benefited the Metro Naga
LGUs in that it has provided for the focusing of their development efforts towards
specific areas, and having the other LGUs complement their needs in the other
areas. Canaman, for example, has been identified as an expansion area for middle-
class housing due to its proximity to the City where majority of the employed
population of Metro Naga are based. The municipality therefore, has started the
massive development projects for human settlement. In doing so, it has allocated
huge portions of its budget to this effort and has necessarily reduced the allocation
for the development of other areas or industries, i.e. the development of its fishing
industry. However, with municipalities like Calabanga and Pasacao identified as the
main areas for the development of fishing industry, the needs of the Canaman in the
said development area are complemented, in the same way that the municipality
complements the needs of the former municipalities in the housing/settlement need
of their residents.

• The MNDC as an advocacy bloc

Much of the resources for the infrastructure and other priority projects of the LGUs
still come from the national government and other funding agencies. Collectively
represented as a bloc with more than 600,000, LGUs get more attention from the
national government thereby increasing their chance of getting assistance for their
needs.

The poblacion of Gainza is only five (5) kilometers from Naga City. A
provincial road serves as one of its main access to the city. However, until the
early 1990s, this road was unpaved and was virtually impassable during the
rainy season. Residents going to the city found it more convenient to cross
the Bicol River to the adjacent town of Camaligan and take a tricycle to Naga
rather than the more direct road to the city.

Neither the municipal nor the provincial government had the resources to
improve the road. National government officials ignored the town’s need
because of its small voting population. MNDC lobbied for the funding before
the President himself. The project, then, became a priority project of the
Department of Public Works and Highways (DPWH).

• Improvement of the capability of the LGUs to deliver basic social services

The resource pooling of the Council has enabled the Metro Naga LGUs, especially the
municipalities, to augment their resource needs, which in turn, has helped them develop
and/or improve in certain areas of their communities.

The equipment pooling, for example, has helped the infrastructure development of the
member municipalities, i.e. road construction. This program has also enabled some of the
LGUs to save on their financial resources, allowing them to allocate such for other
development PPAs.

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 The equal sharing of the financial resources of the Council has also provided for the
augmentation of the scarce financial resources of the LGUs, which has enabled them to
implement the PPAs that require financial assistance that their incomes alone could not
support. Examples of these include the financing of medical missions/projects, livelihood
projects.

Also, the provision of better access to the officers of the member-LGUs to trainings and
seminar workshops have contributed to the enhancement to the capability to provide and
respond to the administrative needs of their respective LGUs as well as the needs of their
constituents.

• Increase in Savings/Capital Build-up/Investments

The pooling of resources has helped the member-LGUs increase their savings. Through
the Metro Naga Equipment Pooling, the LGUs did not have to buy or rent the needed
equipment and machineries for the implementation of infrastructure projects, that otherwise
would have cost them much.

The MNDC has also designed a website where investment areas being promoted by LGU
members are included to encourage possible investors.

Passed in the year 2000, The Solid Waste Management Act (Republic Act No.
9003) requires that all LGUs close their open dumpsites by 2003 and put in
place sanitary landfills or controlled dumpsites. Among the sanctions for the
noncompliance to the law is a penalty of P500,000.00 for every year to be paid
by the LCEs.

The construction of a waste disposal facility is estimated to cost P70 million,

an amount no Metro Naga LGU can afford on its own.

Through the MNDC Solid Waste Management System Project (MNSWMSP),

the LGUs will be able to comply with the law and at the same time save on the
construction of the waste disposal facility. In the project, one town will host
Metro Naga’s central recovery and disposal facility while the rest will
contribute to its operations and to mitigating the effects of the presence of
such a facility in the host municipality. A pre-feasibility study has already been
made with assistance from AusAid.

• Unified Environmental Protection efforts

Through cluster planning of the LGUs, environmental protection has also been given
greater attention. Consolidated plans for the protection of the vital environmental
resources and efforts to comply with the laws connected with environmental protection,
have resulted in the slow-down in the rate of degradation.

Also part of the commitment of the Council to comply with the laws regarding
environmental protection, the member-LGUs have started the consolidated plan on Metro
Naga Solid Waste Management System Project (MNSWMSP).

One of the most significant environmental initiatives of the MNDC is the first Mt.
Isarog Multi-Sectoral Sharing wherein NGAs, LGUs, NGOs, water districts and
an international funding institution gathered together to come up with a coherent
plan for alternative livelihood promotion and watershed development.

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 IMPACT OF THE MNDC
Socio-economic
• Increase in income • Assisted LGUs to access to funds to
provide additional livelihood activities and
employment opportunities through the
Metro Naga Public Employment Services
Office (METROPESO)
• Increase in savings/capital build-up/ • Resource pooling
investments • Investment promotion
• Economic mainstreaming • Effective partnership of the LGUs will bring
about the benefits not only in the urban
areas but most especially in the rural areas
• Forging of unity/harmony in the
community
Environmental Impact
• Environmental soundness of program • Planning for area-wide environmental Solid
and attendant activities Waste Management Program
• Ecosystem protection/conservation
/rehabilitation
Promotion of People Empowerment
• Formulation/ strengthening/
institutionalization of People’s
Council/ community based structures
for active and sustained people’s
participation
• Capacity build-up • Member LGUs have access on how to
apply for foreign grants for their livelihood
projects, assistance in the preparation of
project proposals, conduct of planning
workshops, proposal preparation, etc.
• Partnership with other groups • MNDC has forged formal/informal
partnerships with NGAs and NGOs to plan,
undertake, monitor and/or evaluate specific
programs, projects and activities, most of
which are geared towards the improvement
of the quality of life.
• Gender responsiveness • MNDC has provided its members equal
treatment of both men and women to
access to various opportunities, with
different programs, projects and activities
without focusing on a particular gender
preference
• Local equity • Equitable distribution of
contributions/resources known as Project
Assistance and Fund, which is an
advantage to low-income municipalities
with small contributions but receiving the
same amount as those with higher
contributions.

• Increase in the income of the constituents

The improvements in the member-LGUs have somehow induced the inflow of

investments to Metro Naga. This, in turn, has opened up to more business and
employment opportunities not only for the residents of Naga but also of the other LGUs.
Also, the establishment of cooperatives through the Council’s initiative and the financial
support the Council has extended to some to the livelihood projects of the individual
LGUS have also added to aforementioned positive effects.

Although there is no available statistical data to support the perception that the
constituents of the Metro Naga have experienced increase in income, interviews
conducted with a number of them have provided the generalization that there has indeed
been significant increase in their income, partly due to the efforts of the MNDC.

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 The Council has encouraged and assisted LGUs to access funds to
provide additional livelihood activities and employment opportunities for
the constituents.

Through the facilities of Metro Naga Public Employment Services Office

(METROPESO), MNDC provides a weekly list of job opportunities to its
LGU members to be posted at the city/municipal halls for their
constituents to be informed of the available work within Metro Naga.

• Promotion of people empowerment

The Council has since promoted the welfare of the sectors of society not only in Naga but
also in the other LGUs through the implementation of the Senior Citizens’ Program and
other PPAs that have remained gender-biased. Through this advocacy, the Council is now
pursuing the replication of Naga City’s People’s Council – the Metro Naga People’s Council
– which would encourage greater participation of the constituents of Metro Naga in the
activities of the Council, and ultimately empower to actively push for PPAs that they feel
would greatly improve their condition.

3.3.4 Direction and Pace of Development

Prior to the formation of the MNDC, the member-LGUs were classified as 5th and 6th class
municipalities, except for Naga, which was then a third class municipality. After 10 years of
membership in the Council, they have all progressed at least a level higher from their former
classifications, except for Gainza who has yet to experience such achievement.

Although such improvement cannot be entirely credited to their membership in the Council since
the PPAs implemented by the MNDC have been limited to short-term PPAs that do not effect huge
changes in the LGUs’ economic conditions, it could be said that the MNDC has somehow guided
the development efforts of the member-LGUs.

Income Classification*
LGU 1987 1995 2001
Bombon 6 5 5
Bula 5 3 3
Calabanga 5 3 3
Camaligan 6 5 5
Canaman 6 5 5
Gainza 6 6 6
Magarao 6 5 5
Milaor 6 5 5
Minalabac 6 4 4
Naga 3 1 1
Ocampo 6 4 4
Pamplona 6 5 5
Pasacao 6 4 4
Pili 5 2 2
San Fernando 6 5 5
Camarines Sur 1
*Source: Bureau of Local Government Finance

63
3.3.5 Paradigm Shift

1. The MNDC as perceived by its member-LGUs

Naga is the Council’s front-liner LGU. Being the only city and having the most resources among its
fellow member-LGUs, it has been the greatest contributor to the Council especially in terms of
financial resources. With an annual contribution of not less than P5 million to the common fund,
Naga only receives P100,000 as its share in project assistance, the same amount given to the
other members of the Council.

This is perceived by the current City Mayor Jesse Robredo not as a disadvantage but a form of
long-term investment from which Naga would greatly benefit from. By serving as “big brother” to
the smaller LGUs, Naga helps them realize/achieve development goals, which would eventually
spur economic growth and lessen, if not eliminate, the economic disparity between them. Such
occurrence, in turn, would contain problems of migration and scarcity of resources, and ultimately
help Naga sustain and improve further its economic development efforts without having to face the
problems that hindered them from effectively doing so before. On the other hand, its status in the
Council has opened Naga it to investments since they are now able to package the City as an
investment site with primary clientele base extending to other member-municipalities of the
Council.

For the municipalities, their membership in the Council has by far been positive. Although huge
benefits from the implementation are yet to be experienced, the PPAs of the Council have
significantly contributed to their progress. PPAs like the Equipment Pooling have helped the
municipalities improve their infrastructure facilities, especially during the early years of the Council
when they lacked the needed equipment to implement such improvement. Also, the equal
distribution of the project assistance regardless of the amount of contribution of the LGUs have
also benefited the municipalities, especially the low-income LGUs who generally contribute smaller
amounts to the Council’s common fund than what they receive. These financial assistance have
augmented the scarce financial resources of the Council and enabled them to implement certain
PPAs that otherwise would not have been done if the financial assistance from the Council were
not given.

2. The MNDC as perceived by other LGUs and organizations

Metropolitan associations have long been taught in governance schools as an alternative in

promoting rural-urban development. With the success of associations like the MNDC, this has
become a popular alternative with the LGUs and has started the mushrooming of metropolitan
associations in several regions of the country.

The amount of success the MNDC had achieved, particularly in being able to maintain the support
of its members despite the political differences of LCEs and positive effect in the development
efforts of all its member-LGUs, has made the Council a model for other LGUs attempting to
establish similar organizations of the same nature. A number of associations have already come to
Metro Naga to have briefings on the Council, like the Metro Kutawato Development Alliance
(MKDA) from Mindanao and the Metro Iloilo Development Council (MIDC) from Visayas, and
several other LGU alliances.

3.3.6 Sustainability

1. Conversion into the Metro Naga Development Authority

The MNDC has been in existence for a decade already. Although it may be said that these years
signify stability of the Council, there are factors like the short term of office of the LCEs and their
political affiliations that pose a threat to the sustainability of the Council.

64
The election of local officials every three (3) years brings a certain degree of change into the
Council, especially when new LCEs are elected because there may come a time when newly
elected LCEs may have differing sentiments than their predecessors on their LGUs membership in
the Council. Rivalry in politics due to the LCEs’ political party affiliations may also affect their
working relations with the other LCEs which could further lead to their non-cooperation or lack of
active participation in the actions of the Council. These pose a problem because the MNDC body is
primarily composed of the LCEs. When problems like these arise, continuity of the PPAs of the
Council and ultimately the existence of the Council itself may be at stake.

As an answer to this dilemma, discussions have been made among the LCEs themselves on the
conversion of the MNDC to a Metro Naga Development Authority. Such change, according to the
advocates of the proposition, would give permanency to the Council as this would entail the
creation of special charter, and not simply an Executive Order that may be revoked through the
issuance of a counter executive order. A special charter, on the other hand, would require the
existence of the MNDC, impose the representation of the LGUs’ LCEs, assurance the Council of
an annual allotment from the GAA of the national government, and bestows on it more powers and
authority to formulate, enact/implement ordinances and resolutions on a wider range areas of
concern that would govern the whole of Metro Naga and expand MNDC’s current role as merely a
coordinating body for the member–LGUs. This, as they say, would be an effective way to ensure
the sustainability of the MNDC.

On the other hand, those not so optimistic about the change of the MNDC into an authority,
maintains that although it would give the Council more power and responsibility, it would also
subject the Council to the direct supervision of the President, and making it more vulnerable to
politicking.

As of the present, the proposition is still the subject of discussions by the LCEs and steps towards
this goal have yet to be made.

2. Greater involvement of the local sanggunians

Presently, the LCEs comprise the main body of the Council. They are the ones who make the
major decisions and the ones that formulate resolutions and ordinances of the Council.

Although the LCEs represent their LGUs in the Council, their participation is dictated by their
respective sanggunians. It is the local sanggunians who decide on the participation of their LGUs
in the Council. Example of such hold of the sanggunian is what happened with the membership of
the municipalities of Bula and Ocampo, whose sanggunians initially did not agree to let their LGUs
participate in the Council. It was only after seeing the positive effects of the Council and explaining
to its members the objectives and goals of the Council that the sanggunians allowed their
municipalities’ participation in the MNDC.

It is also the sanggunians that formulate and implement the local resolutions and ordinances of the
LGUs. At present, the sanggunians are not involved in the processes of the Council. However,
given the extent of powers of the local sanggunians, the Council has seen it as an advantage to
have them participate in the activities in the Council. One of the advantages seen in such a move
is that the thrusts and goals of the Council would be integrated in the formulation of the LGUs’
individual policies and enactments, and such would greatly contribute to the
facilitation/implementation of the PPAs and other development efforts of the Council.

Another benefit perceived in the involvement of the sanggunians in the Council is the
institutionalization of the MNDC. With the aforementioned potential problems connected with the
LCEs’ relations, the involvement of the local sanggunians would bring more stability in the LGUs’
cooperation and participation in the Council.

3. Increase in the Personnel of the Project Development Unit

65
The Council’s Project Development Unit (PDU) is composed of only five (5) individuals. Although
the PDU has shown efficiency in the handling of the tasks handed-over to them by the Council
given their small number. However, there are certain areas of responsibilities that have been
neglected because of the lack of manpower to fulfil them, like the shortcomings in the
documentation, monitoring and evaluation of the Council’s PPAs.

It is therefore ideal that the number of personnel of the Council’s PDU be increased to further
improve its efficiency and therefore be able to ensure the fulfilment of certain tasks/activities that
are also essential in the operations of the Council.

3.3.7 Financial Viability

At present, the Council has three sources of funds: the common fund, the appropriation from the
national government and external assistance. However, these are not enough to fund all the
intended PPAs, especially now that the Council is targeting the implementation of its long-
term/development PPAs, i.e. the Solid Waste Management Program and the IMNIPP.
The Council, therefore, needs to find alternative sources that would augment their present funds
for it to be able to implement and maintain/sustain its long-term PPAs. One such alternative is for
the MNDC to intensify/focus their efforts in microfinance as it has already started. This would not
only help the residents of its member LGUs and boost local economic activity, but would also
provide an additional steady income for the Council.

3.3.8 Replicability

The establishment of the MNDC can be described as a procedure that is relatively simple. The
formation of the Council happened spontaneously after initial cooperative undertakings to solve the
common issues and concerns of the member-LGUs. The structure and operations of the Council
have been determined and patterned to the specific needs of the Council and not merely copied
from already-existing organizations. However, it is important to point out that a very crucial factor in
the formation of the Council is the realization and recognition of the LCEs’ themselves that
cooperating with other LGUs in solving their problems would be beneficial to them. For Naga, it
was important that it has realized that for it to sustain the effects of its development efforts, the City
would have to include in its plans uplifting the economic condition of its surrounding LGUs. For the
municipalities, it was equally important that they recognized the assistance that Naga could extend
to them in solving their problems and became open to the idea of helping other LGUs facing similar
issues and concerns that they had despite differing political backgrounds of the LCEs. These
realizations and openness to the idea of cooperation has certainly contributed a lot to the success
of the Council.

Another factor to consider in the replication of the MNDC is the presence of legislations/national
government policies where such an alliance will be established. The Philippine government’s policy
on local autonomy embodied in the LGC encourages cooperative undertakings of LGUs and this
has facilitated the establishment of the MNDC and other similar organizations.

3.3.9 Impact on externalities

The MNDC as a cluster of LGUs has affected the Provincial Government’s planning in the sense
that it the provincial plan now considers the plans of the member-LGUs collectively as MNDC, and
not as separate entities. It has also caused the same in the planning at the regional level, with the
whole of Metro Naga being considered as part of the Legapi-Iriga-Naga-Daet Growth Corridor
(LINDGC) and not Naga alone.

66
The MNDC, also has an effect on the national government as it is annually given a portion of the
GAA Fund, although it is usually gets its appropriation from the President’s Contingent Fund.

Finally, the MNDC will provide the country a model for inter-LGU cooperation that may usher in
possible amalgamation to enhance local government viabilities.

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4. Partnership for local economic development – Indonesia
4.1 Background

Indonesia is a large archipelago consisting of five main islands (Java, Sumatera, Kalimantan,
Sulawesi and Papua) along with thousands of small islands. At the moment, Indonesia has 31
provinces. In 2002, the total population was estimated to be 210.96 million (60% in Java).
Provinces in Java have higher population density than those of outside Java. DKI Jakarta has the
highest population density which is 12,619 persons per square kilometre. Kalimantan has the
lowest population density at about 12 persons per square kilometre. Population distribution
according to age shows that 29.75 percent are age 0 to 14, 65.6 percent is in productive age (age
15-64), and only 4.65 percent is aged 65 and above; thus the dependency ratio is 52.44.
Proportion of productive is the highest in DKI Jakarta (73.67 percent) and the lowest in Riau (1.85
percent).

A World Bank study6 indicates that of the total population, urban population7 by the end 1999 was
82.5 million or around 39.8 percent (SIMA Table, World Bank 2002) and around 40.34 percent in
2000 as cited from the United Nations. Population growth was around 1.6 percent per annum
between 1990 and 1999, while urban population growth at the same time was three times or
around 4.4 percent. Thus, Indonesia is experiencing steady urbanization similar to other
developing countries in the world. According to the report, it is expected that by 2025, 60.7 percent
of the total population will reside in urban areas.

Table 4.1 Population Demography Pattern

1971 1976 1981 1986 1991 1996 1999

Population growth (annual %) 2.4 2.5 2 1.8 1.8 1.6 1.6
Urban population (millions) 21.1 27.1 34.8 44.8 57.3 72.3 82.5
Urban population (% of total) 17.6 20 23 27 31.6 36.7 39.8
Urban population growth (annual %) 5.1 5.3 5.5 5.2 5 4.6 4.3
Source: SIMA tables, World Bank 2002 cited in Urban Sector Review, WB 2003

Population migration to large cities is apparent as described in the same World Bank report. “The
inter-census survey (BPS, 1995) indicates that about 7.2 percent of the total population migrated
during the five-year period since the 1990 census, with most migrants (about 61 percent) moving to
urban areas. Of the latter, 34 percent came from other urban areas (intra-urban mobility), and the
remaining 27 percent, from rural ones. This suggests that net rural-urban migration may account
for about 25-30 percent of urban population growth, with the remaining 30-35 percent of urban
growth due to rural-urban transformation of settlements. (ADB, 2000a)”8 It shows that the linkage
between rural and urban is quite strong particularly if we look at the population migration from rural
to urban areas.

Rural-urban linkages

Indonesia experienced high economic growth during its first 25-year development plan - just prior
to the economic crisis in 1997 - however during that time and until now, regional economic
disparities have emerged. Growth and equality of interpersonal and interregional incomes are the
critical issues in Indonesia’s regional development. The government had implemented
development programs such as IDT, P4K and P3DT9 to improve efficiency and interregional equity

6
Cities in Transition: Urban Sector Review in an Era of Decentralization in Indonesia, Working Paper no. 7, Urban Development
Working Papers, The World Bank, 2003
7
BPS defines a village as urban on the basis of population density, the proportion of the population engaged in non-agricultural
occupations and the number of urban facilities
8
Cited from Cities in Transition: Urban Sector Review in an Era of Decentralization in Indonesia, Working Paper no. 7, Urban
Development Working Papers, The World Bank, 2003
9
IDT, P4K and P3DT are names of GOI program to reduce poverty that had been launched previously

68
with mixed results. Development disparities promoted widespread rural urban migration that, to an
extent, creates concentrations of low-income workers in cities. Most of them are unskilled, having
no or low education, without stable income. Development disparities occur in many parts of the
country, one of the reasons being the lack of adequate links to the mainstream economy.
Therefore, the government realized there was a need for a balanced growth between urban and
rural areas (URDI, PARUL 1998).The rural urban linkages approach to development in Indonesia
emerged from the government’s past experience in regional development, which indicated the
important role of these types of linkages.

The government further realized that if a more balanced pattern of growth and development was to
be achieved, the decentralization process needed to be intensified and local public institutions
needed to be strengthened. Consequently, the government issued two new laws that give wider
autonomy to local governments. The two laws are recognized as the core of the decentralization
process in Indonesia. Law 22/1999 on Regional Governance specifies the political and
administrative responsibilities of the central, provincial and local governments within a
decentralized structure; while Law 25/1999 on Fiscal Balance provides the legal foundation for
fiscal decentralization, delineating the new division of revenue sources and intergovernmental
transfers. According to the laws, kota and kabupaten (cities and rural districts) are responsible for
most public services, e.g. health, education and infrastructure. In addition to taking on
responsibilities related to the provision of infrastructure and services, local authorities have to
stimulate regional economic development and are responsible for alleviating poverty.

The World Bank study revealed that there are significant social, economic and political linkages in
Indonesia between urban areas and their rural hinterlands at the macro and local levels. The
linkages, at the macro level, are in the form of circular/seasonal migration, remittance of food
provision and administrative connections facilitated, or hampered, by the conditions of
transportation infrastructure, market and transit/storage facilities, and market information. It
mentioned that the rural economy had low levels of growth in non-farm employment and was
dominated by urban capital. It also stated that many urban residents retained strong linkages to
their villages of origin. Financial flows between urban and rural areas were typically on a person-to-
person basis, rather than at an institutional level, while in the area of information flow, television
was a major source of information that all level of income groups had access to, even in remote
villages. In the meantime, information to help rural producers have better access urban markets
was not available. During the crisis, the report mentioned that the stable rural economy balanced
the volatile urban economy, as reflected in the changes in sectoral GRDP shares, unemployment
and poverty rates and even reverse migration between urban and rural areas. There is a sense
that rural-urban interactions have increased everywhere for the last twenty years, although it does
not necessarily narrow the income gap of rural-urban. Understanding the rural-urban linkages is
important particularly in handling the role of secondary cities as buffers and as support to
metropolitan cities (e.g. Jakarta)10.

Rural-Urban Linkages (RUL) in Indonesia

Since the 1980s, the concept of RUL has been part of the National Urban Development Strategy
(NUDS). Rural-urban linkages were also used by Ministry of Public Works (MPW)11 in its
development plan of ‘Kawasan Andalan’ (“strategic regions”) and rural areas as the Growth
Centres. The scope of the MPW’s program included water supply, rural road development and
improvement.

In 1998, the Urban and Regional Development Institute (URDI) was commissioned by the National
Development Planning Agency (BAPPENAS), the UNDP and the UNCHS to conduct a study of
Poverty Alleviation through Rural Urban Linkages (PARUL). The study consisted of three main
components: (i) to identify clusters of economic activities, (ii) analysis of linkages associated with
clusters of economic activities and (iii) analyses of rural-urban linkages within selected provinces.

10
Source: Cities in Transition: Urban Sector Review in an Era of Decentralization in Indonesia, Working Paper no. 7, Urban
Development Working Papers, The World Bank, 2003. p.2
11
Now Ministry of Settlements and Regional Infrastructure

69
Later on, the approach, which was developed in PARUL study, was implemented in the program
called ‘Partnership for Local Economic Development’ (PLED, or KPEL – Kemitraan untuk
Pembangunan Ekonomi Lokal).

Box 4.1

KPEL or PLED (Partnership for Local Economic Development)

KPEL or PLED is formerly known as PARUL (Poverty Alleviation through Rural Urban Linkages).
PARUL programme is a joint cooperation between the Government of Indonesia and UNDP with
the mission to link backward region particularly rural areas in Eastern Region into main economic
mainstream through strengthening rural-urban linkages. It has long been recognized that
geographically remote regions often struggle economically due to the fact that they are left out of
the economic mainstream. The Partnership for local economic development or PLED (Kemitraan
Untuk Pengembangan Ekonomi Lokal – KPEL) formulated and applied an approach to connect
remote regions to the mainstream economy. It does this by means of public-private commodity
focused partnership which strengthens backward and forward linkages, mobilize resources,
disseminate market information and improve business relationships and arrangements between
poor rural producers and urban processors and exporters. The intended beneficiaries of the KPEL
approach are farmers, fisher folk, producers and traders in rural areas, who, otherwise, would not
have these opportunities. The first step was to identify market opportunities, then to organize
producers, processors and traders to take advantage of these opportunities. Being organized has
many advantages since it creates a critical mass for group education and learning, produce
improvements, transportation, storage, bargaining and marketing.

KPEL is one of the community empowerment programmes to build self-reliance and promote local
economic development. The approach focuses on establishing partnership, which promote local
economic development through identifying new market opportunities, adding value and improving
backward and forward linkages for export commodities. KPEL is one of the models being offered
by BAPPENAS to assist local governments to:
- address poverty by boosting local economic development
- strengthen democracy and community empowerment through the facilitation of public-private
partnership

(Source: Partly cited from KPEL, Annual Report 2001 Bappenas, UNDP, UN Habitat)

In 2003, the Ministry of Settlements and Regional Infrastructure (the Indonesian name is commonly
abbreviated as Kimpraswil) developed a rural development approach, which has been called the
Agropolitan Development. This concept basically aims at creating “development centres” in
productive or potentially productive rural areas and agriculture-based small towns. The centres are
to become the focal points for the collection, processing and distribution of agricultural inputs of the
surrounding rural areas. The centres need to be supported by adequate infrastructures and other
facilities. Therefore, Kimpraswil’s interventions need to be concentrated on these potential
agriculture-based centres. The concept was adopted as the new rural development approach
(rural-urban linkages) in response to the urbanization pressure on agricultural production12.

12
Ministry of Kimpraswil, Agropolitan Development in Regional Development Framework, February 2003

70
 Box 4.2

Agropolitan Development

The Development Concept of Agropolitan Region (Kawasan Agropolitan)

- Agropolitan Region is rural spatial hierarchy, with agropolitan centre and surrounding rural
areas.
- Agropolitan centre is linked with national centre, provincial centre and kabupaten centre system
(RTRW Propinsi/Kabupaten or Provincial/Kabupaten Spatial Plan)
- Indicated by the running system and agricultural business in the agropolitan centre which serve
and encourage agricultural business in the surrounding areas.

Policy and Strategy of Agropolitan Development

Development Policy
- Market driven oriented through community empowerment
- Provision of infrastructure and supporting facilities for agricultural business development
- Developing export base commodities
- Consumer oriented through urban-rural linkages

In the concept, rural areas should de developed in one integrated regional development based on
rural-urban linkages. One of the characteristics of agropolitan is the rural-urban linkages that
mutually dependent and both need each other as the agricultural areas in rural are developing on
farm activities and producing household commodities or off farm activities, while the urban
provides facilities allowing on farm activities and agricultural business such as supplying
agricultural necessities; among others: capital, technology, information, equipments and others.

Source: Ministry of Kimpraswil, Agropolitan Development in Regional Development Framework, February

2003.

Selection of case studies on Rural-Urban Linkages

This document covers two cases of rural-urban linkages in Indonesia with specific emphasis on the
intervention/practice done by government and members of the civil society. The first one is related
to the afore-mentioned Partnership for Local Economic Development of KPEL program, while the
second one is a “more natural” case without specific intervention by the KPEL program (Note: it will
be too presumptuous to say that there was no government intervention in the non-KPEL case
where the RUL phenomenon is supposed to be more dictated by the market; likewise, it will also
be incorrect to say that KPEL’s intervention interferes with market mechanism).

The specific interventions/practices of RUL, which will be selected as case-studies are:

(i) KPEL-related RUL case: is the implementation of PLED in Tanggamus in Lampung
Province
(ii) Non-KPEL rural-urban linkage is Desa Kasongan (Kasongan Village) in Yogyakarta
Special Region, the village is famous for its pottery (terracotta) products and has
become tourist attractions.

4.2 Partnership for Local Economic Development in the Tanggamus

Region – Province of Lampung

The province of Lampung consists of six kabupatens and two kotas13: Kabupaten Lampung Barat,
Kabupaten Tanggamus, Kabupaten Lampung Selatan, Kabupaten Lampung Timur, Kabupaten
13
kabupaten is a district, and kota is a city

71
Lampung Tengah, Kabupaten Lampung Utara, Kabupaten Way Kanan, Kabupaten Tulang
Bawang, Kota Bandar Lampung and Kota Metro. The whole area of the province is 3,528,835
hectares. The population of the province in 2002 was 6,787,654 based on 2000 population census.

Table 4.2 Land Use, 2002

Type of utilization Acreage

1. Villages 245,931
2. Paddy field 290,824
3. Unirrigated agricultural field 676,824
4. Plantation/estates 690,803
5. Mixed estates 366,419
6. Coarse grass 89,476
7. Forest 833,847
8. Swamp and lake 15,692
9. Fishpond 42,251
10. Others 49,478
Total 3,301,545
Source: BPS Lampung Province -2002

The transportation network of the province includes land, sea, and air transportation. The land
transportation consists of 851.26 kilometers of state roads, and 2,369.9 kilometers of district roads.
There are three seaports servicing the province: Panjang, Srengsem and Bakauheni, and one
airport, Radin Inten.

4.2.1 Physical-Geographical Conditions

Kabupaten Tanggamus is a newly established Kabupaten in the province, based on Law 2/1997
dated 3 January 1997 and legalized on 21 March 1997 by Ministry of Home Affairs. The area of
kabupaten is 3,356.61 km2 with uphill and downhill topography area covering approximately 40
percent of its total area with a height range of 0 - 2115 meters above sea level. The land utilization
is presented in the table below.

Table 4.3 Land Utilization in Kabupaten Tanggamus

No Type of utilization Acreage Percentage (%)

(hectares)
1 Housing and yard 23.091 6.88
2 Paddy field 24.540 7.31
3 Dry field 43.334 12.91
4 Unirrigated agricultural land 34.667 10.33
5 Grass 57 0.02
6 State Forest 106.474 13.72
7 Community Forest 28.144 8.38
8 Plantation 64.944 19.15
9 Swamp 137 0.04
10 Built Fishpond 412 0.12
11 Fishpond 572 0.17
12 Unused land 2.215 0.66
13 Others 7.074 2.15
Total : 335.661 100,00
Source: RTRWK Tanggamus, 1999

The administrative boundary of the kabupaten is as follows:

- North: Kabupaten Lampung Barat and Kabupaten Lampung Tengah
- South: Indonesian Ocean
- West: Kabupaten Lampung Barat
- East: Kabupaten Lampung Selatan

72
Almost half of the area is hilly and mountainous (more than 40 percent slope) which can not be
developed and thus determined as state forest.

There are 1199.1 km of road in the Kabupaten with 27.8 percent considered to be in good
condition, 42.87 percent in proper condition and the rest is in poor condition.

In 2002, Lampung exported Robusta coffee amounted to 29,649 ton of total value 12 million US
dollar. The acreage of coffee plantation was 55,261 hectares and the total production was 34,038
ton. Coffee plantations in Kabupaten Tanggamus province belongs to the community, none is
owned by the state or private.

4.2.2 Social, Economic and Demographic Conditions

Social

Kabupaten Tanggamus has a number of pre welfare and welfare I families.

Table 4.4 Pre Welfare and Welfare I Families in Kabupaten Tanggamus, 2002

No Kecamatan (sub district) Pre welfare Welfare I Total

1 Wonosobo 5440 3361 8774
2 Semaka 3886 2075 5961
3 Kota Agung 4959 5045 10,004
4 Pematang Sawa 1211 1585 2796
5 Pulau Panggung 4944 3329 8273
6 Ulu Belu 4132 2962 7094
7 Talang Padang 6904 4172 11,076
8 Sumberejo 3592 1531 5123
9 Pugung 5673 3045 8718
10 Pagelaran 5757 3989 9746
11 Sukoharjo 4207 3101 7308
12 Adiluwuh 2748 2538 5286
13 Pringsewu 6919 5689 12,608
14 Gadingrejo 6577 3789 10,366
15 Pardasuka 4741 2792 7533
16 Cukuh Balak 3051 2409 5453
17 Kelumbayan 2329 1774 4103
Total 77,070 53,186 130,222
Source: Tanggamus in Figures, 2002

Economic situation

The following tables present the revenue and expenditure of the local budget in 2002. The table of
expenditure shows that allocation for government officials dominated the whole budget while the
allocation for development expenditure is dominated by housing sector. There is no allocation in
the development expenditure for agricultural and forestry.

73
 Table 4.5 Revenues 2002

No Revenue Total
A. Local Revenue

1 Remaining from Previous Year Calculation 209,789,884,00

2 Local Own Revenue

2.1 Local Taxes 1,290,257,379.00
2.2 Local Retribution 988,304,195.09
2.2.1 Profit sharing of Local Company -
2.2.2 Other revenue 892,430,363.25

3.1 Tax sharing 18,825,259,037.02

3.2 Non-tax sharing 15,849,145,503.00
3.3 General Allocation Budget 213,366,906,250.00
3.4 Special Budget -
3.5 Contingency Budget -
3.5 Other income 318,207,966.25
Source: Tanggamus in Figures, 2002

Table 4.6 Expenditures 2002

No Expenditure Total
A. Routine Expenditure
1. Government Officials 168,219,401,015.00
2. Goods 38,902,017,304.65
3. Maintenance 15,795,449,780.00
4. Official Trips 1,112,906,000.00
5. Other expenditure 9,204,291,357.00
6. Subsidies/contribution 3,459,000,000.00
7. Expenditure not included in other part 4,155,619,500.00
8. Unexpected Expenditure 1,045,405,477.00

B. Development Expenditure
1. Industry -
2. Agricultural and Forestry -
3. Labour -
4. Trade, Local Enterprise Development, Local Finance and -
Cooperative
5. Transportation 5,001,787,944.00
6. Mining and Energy 985,000,000.00
7. Tourism and Local Telecommunication -
8. Housing Settlement Area Development 9,107,756,334.00
9. Environmental and Spatial -
10. Education, National Cultural, Belief in God, Youth and Sports -
11. Population and Welfare Family -
12. Health, Social Welfare, Women Role, Children and Teenager 227,660,000.00
13. Housing and Settlements 8,107,431,063.00
14. Religion -
15. Science and Technology -
16. Law -
17. Government Apparatus and Monitoring -
18. Politics, Information, Communication and Mass Media -
19. Security and Public Order 74,438,000.00

C. TOTAL A+ B 256,398,163,774.65

D. Remaining 2001 Budget plus Contra Pos

Balance on Local Post (BPD) 1,113,956,669.73
Balance on UUDP Cashier 352,358,348.00
Contra Pos of Budget Year Calculated 1,623,024.00
Source: Tanggamus in Figures, 2002

74
The tables below show the condition of the Gross Domestic Regional of the district (Kabupaten). In
contrast to the allocation in development expenditure, the PDRB shows the dominance of
agricultural, animal husbandry, forestry and fisheries.

Table 4.7 Percentage distribution of GDRP by sector at constant prices 1998-2001

No SECTOR 1998 1999 2000 2001

1 Agricultural, Animal 40.36 41.31 40.18 41.45
Husbandry, Forestry and
Fisheries
2 Mining and Quarrying 2.73 2.52 2.46 2.44
3 Manufacturing 6.75 6.65 6.57 6.34
4 Power and Water 0.64 0.64 0.66 0.65
5 Construction 9.68 9.14 9.55 9.29
6 Trade, Hotel and Restaurant 20.49 20.12 20.32 19.87
7 Transportation and 3.86 3.82 4.03 4.20
Communication
8 Finance, Rental & Company 5.87 5.84 5.60 5.74
Services
9 Services 9.61 9.95 10.63 10.04

GDRP 100.00 100.00 100.00 100.00

Source: Tanggamus in Figures, 2002

Table 4.8 GDRP growth per sector based on constant price 1998-2001
(Previous year 100.00)

No SECTOR 1998 1999 2000 2001

1 AGRICULTURAL, ANIMAL 3.82 6.29 0.57 7.17
HUSBANDRY, FORESTRY
AND FISHERIES
2 MINING AND QUARYING -33.40 -4.13 1.34 3.01
3 MANUFACTURING 0.67 2.26 2.65 0.28
4 POWER AND WATER 19.65 4.06 6.39 2.23
5 CONSTRUCTION -40.60 -2.02 8.52 1.11
6 TRADE, HOTEL AND 1.00 1.98 4.82 1.65
RESTAURANT
7 TRANSPORTATION AND -25.48 2.86 9.38 8.30
COMMUNICATION
8 FINANCE, RENTAL & -17.04 3.38 -0.40 6.46
COMPANY SERVICES
9 SERVICES 33.86 7.49 10.94 -1.84

GDRP -5.88 3.85 3.82 3.93

Source: Tanggamus in Figures, 2002

Demographic Condition
There are 17 sub-districts in Kabupaten Tanggamus. The population of the Kabupaten in the 2000
census was 800,211 persons. Sub-district Pringsewu had the highest population density with 1,423
persons per square kilometre and the lowest was Sub-district Kota Agung with 26 persons per
square kilometre.

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 Table 4.9 Population in Tanggamus in 2002

No Sub-district Population Pop. density/km2

1 Wonosobo 49,522 160
2 Semaka 32,743 191
3 Kota Agung 65,552 26
4 Pematang Sawa 14,643 79
5 Pulau Panggung 49,707 79
6 Ulu Belu 29,542 91
7 Talang Padang 88,186 853
8 Sumberjo 28,518 502
9 Pugung 49,241 211
10 Pagelaran 53,734 328
11 Sukoharjo 51,943 949
12 Adiluwih 31,799 485
13 Pringsewu 95,447 1423
14 Gading Rejo 62,632 818
15 Pardasuka 45,655 533
16 Cukuh Balak 34,231 91
17 Kelumbayan 17,814 101
Total 800,909 238
Source: Tanggamus in Figures, 2002

The male/female ratio was 107.9. The largest age group was 10-19 years old with 205,607 people
or 25.2 percent of total population. School attendance (kindergarten, primary school, junior high
school and high school) in 1999 was 176,183 or 59.2 percent of total population in school age
(297,445). The figures show that many children in school age were not able to attend school,
probably due to the poverty situation in the kabupaten. In response, the local government
developed some programs to cope with educational problems including 9 years compulsory
education; education package for learning community groups (Paket A, B, and C) as well as open
learning school.

4.2.3 Legal/Regulatory Frameworks

The institutional framework in Kabupaten Tanggamus is similar to that of other Kabupaten in the
country. The body responsible for physical and non-physical planning for the district is Bappeda.
The draft plan is presented before the DPRD (local council) for approval. In the case of budget
allocation process, all dinas propose their budget plan to Bappeda. Bappeda scrutinizes the
proposed budget coming from all dinas and revise them based on priorities that the Bappeda
already had. Bappeda forwards the whole proposed budget to Panitia Anggaran Kabupaten. The
Panitia Anggaran will revise the proposed budget according to their priorities and the final
proposed budget will then be presented to DPRD (the local council) as the proposed APBD of
Kabupaten Tanggamus. It is in the hand of DPRD to approve or to disapprove the draft APBD. All
dinas are responsible to implement their programs which have been approved in the APBD.

4.3 Intervention by KPEL in Tanggamus

4.3.1 Brief History of KPEL’s Intervention in Tanggamus

KPEL was formally launched in Lampung in March 2001. The program focused on coffee
production following the recommendations of the research report on the market potential. The
project set up partnerships in the Lampung Barat and Tanggamus Districts. The mission of the
partnership was to strengthen the ability of coffee producers and processors to compete in
international markets. In view of the collapse of world coffee prices just prior to the launching, the
partnership needed to be creative about how to support farmers and to ensure efforts to raise the
quality of local produce to fetch better prices. KPEL working with the Provincial Office of Forestry

76
and Estate Crop prioritized support for coffee farmers with a Government budget of Rp. 650 million
for tools, marketing support and training. The region worked with 284 producers 8 percent of which
were women. (KPEL, Annual Report 2001). The KPEL program in the Province Lampung ended
the first quarter of 2002. However, the farmers under Paguyuban (association of farmers)
continued performing activities.

4.3.2 Concept and Application of KPEL

KPEL adopted assistance (pendampingan) approach that shifted from a top-down approach to a
toward bottom-up approach. The assistance approach applied the principle of equal partnership;
the function of assistance is emphasized on the role of intermediaries to link up multi stakeholders
to create business transaction. The KPEL experience in Lampung, found out that there are the
three critical important for success were trust, experiences/knowledge, and contents.

With the implementation of the laws no. 22/1999 and no. 25/1999, KPEL seemed to obtain legal
support since the program was in line with local autonomy particularly in terms of Local Economic
Development. The following aspects of KPEL were in line with the contents of the laws:
1. KPEL focused on the aspect of local economic development in independent fashion.
2. KPEL developed local partnership activities potential to create benefit to the region
3. KPEL was able to provide advocacy to local government in development planning focus on
specific economic clusters.

KPEL activities in Lampung Province focused on the following:

1. To promote local economic development emphasizing potential export commodities of the
province, i.e. coffee economic cluster.
2. Market approach to planning and development of local economic
3. Connecting small-scale producers to wide market by establishing partnership with large
scale companies.
4. Developing partnership of Government-Private-Community in formulating action plans,
natural resources mobilization and funds to promote local economic development
5. Empowering farmers, and small and medium scale entrepreneur through partnership.

The target group and beneficiaries of KPEL program in Lampung are small farmers as primary
stakeholders of one economic cluster as well as small scale enterprises which are included into a
chain of coffee economic cluster such as coffee processing household industries. Other
beneficiaries included14:
a. Large companies who supported small producers in the area of marketing, particularly in
buying the product of the producers.
b. Public-Private Partnership composed of business, government and community
representatives.
c. Government officials involved in local economic development planning in the region

4.3.3 Implementation Process

The technical team of KPEL in Lampung was called PSU (Provincial Support Unit), from
department of Social Economic of Agricultural Faculty of Universitas Lampung (Lampung
University).

The program implementation was initially started with public dissemination (sosialisasi) intended to
disseminate KPEL activities to respective parties as well to conduct screening of interested parties.
The public dissemination was expected to create local capacity building in understanding
development approach such as KPEL. The phases of implementation were as follows:
a. Personal approach, PSU conducted direct approach to key persons in the government,
community and business circle.
14
Abidin, Z. “Pengalaman Propinsi Lampung dalam Pelaksanaan Program KPEL, November 2001”

77
 b. Institutional approach by utilizing university’s institution (in this case the Agricultural Faculty
of Lampung University) to lobby together with BAPPEDA to multiple stakeholders, that
played important roles in developing coffee commodity, mainly conducted through seminars
and workshops
c. Functional approach, conducted by PSU and the forum by approaching the business
communities, government and grass root groups.

As part of the program the Partnership in Kabupaten Tanggamus called FKKPEL (Forum
Kemitraan Kabupaten bagi Pengembangan Ekonomi Lokal) was established in mid 2001. The
FKKPEL establishment was directed toward bridging the interests of multi stakeholder and build
synergy among them to promote local economic development. The objective was to increase the
income of the farmers and the region through economic cluster development. Thus, FKKPEL
agreed to focus on coffee commodity cluster as the starting point to boost local economic
development. The members of FKKPEL Tanggamus consisted of government (Bappeda, Forestry
and Plantation Unit, Economic Unit), private sector including export companies (PT Indokom and
AEKI), manufacturing (PT Nestle and Kopi Intan) as well as Kadinda (Local chamber of
commerce); 9 groups of coffee producer; and community (University of Lampung and two local
NGOs).

FKKPEL Tanggamus was administered by the head of BAPPEDA in the district and the role of the
local government was quite significant. This was due to the instruction of the Bupati to allow the
head of BAPPEDA to conduct coordination among the members. The local government still had a
significant role because the business community involvement was still lacking in the region. The
support of the local government was indicated by the SK Bupati (decision letter) regarding FKKPEL
as well as the support of the government in allocating some portion in the 2002 local budget to
facilitate FKKPEL activities15. Aside FKKPEL, there was another institution, the Tim Pembinaan
Perkopian Lampung (Lampung Coffee Development Team) which was financially supported by
Asosiasi Eksportir Kopi Indonesia (AEKI) or Coffee Exporter Association, their obligation was to
develop coffee production in Lampung Province. The team composed of Local Government
Secretariat, Plantation Unit, Cooperative Unit, Industrial and Trade, and Lampung University. At
the local level, Paguyuban Petani Kopi was also established by KPEL.

4.3.4 Program Impacts

The partnership in Kabupaten Tanggamus known as FKKPEL was very active with 31 members.
Forum Pelaksana (Implementer Forum) was formed to facilitate meetings among the four parties.
In the sub-districts, task forces were responsible to facilitate direct communication with farmers and
to provide more active support for their program. The task force’s function was as direct
intermediaries between FKKPEL and the ground activities; therefore FKKPEL would be able to
focus on all activities in the training and its tasks.

The involvement of local government played an important role in terms of improving performance
of partnership and to motivate other stakeholders to participate. The partnership consisted of
dinas16 of agricultural, dinas of forestry and plantation, along with Bappeda. The key success of the
partnership initial development resulted from the local leader (head of bappeda Kabupaten
Tanggamus) from the government having a strong commitment to start LED.

Bappeda’s authority as a local government body that can coordinate several dinas enabled it to
compel other dinas to be actively involved in KPEL (such as dinas of Agricultural, dinas of Forestry
and Plantation). The program of dinas of Forestry and Plantation became a reliable source for
KPEL. The skills of their field instructors were properly utilized through monthly meeting of the
partnership as well as task force regular meeting at sub-district level.

15
However the table 4.5 shows that there is no realization for agriculture and forestry in development expenditure.
16
Dinas is unit or office at the local government

78
The achievement of FKPPEL, was not solely the result of government support but also the active
participation of producers. From the meetings, producers could obtain information on new market,
skills and opportunities. The location of Tanggamus was not so far from the (local) market and the
access to telecommunications, banking and transportation were also important factors for the
success of cluster development under FKKPEL.

There were four villages in one Sub-district of Kabupaten Tanggamus that receive the KPEL
program as coffee producer villages. That target group received regular assistance from PSU
team. The farmers were grouped into four and the number group of farmers grew to 10 groups in
2002 because many were interested to join after they heard and learned about the program.

Table 4.10 Group of farmers as KPEL’s working partner in Kabupaten Tanggamus in 2001

Number Name of group Address

1. Megang Jaya Gunung Megang
2. Tri Tunggal Tanjung Rejo
3. Tani Makmur Talang Beringin
4. Mitra Mandiri Way Ilahan
5. Mulya Tekad
6. Mawar (Wanita Tani) Tekad
7. Rukun Tani Sumber Mulyo
8. Sumber Rejeki Kebumen
9. Dunia Baru Tegal Binangun
10. Karya Bakti Tekad
Source: “Laporan Kemitraan Pengembangan Ekonomi Lokal Lampung”, 2001

Paguyuban Petani Kopi (Association of Coffee Producers) was also established. Its members were
farmers from five village groups. The Paguyuban was supposed to help the farmers to negotiate
with local and national buyers, and to improve their access to market. Another four village groups
then join the Paguyuban. Each of producer group sent their representatives to sit on the
association management. They worked together to solve collective problems and to explore
marketing strategy for coffee producers. The information gathered out of the meetings was
disseminated to producers in each group. KPEL helped the association by providing trainings on
business management, coffee milling, quality control, packaging and marketing. KPEL also
supported the association to conduct advocacy to government in order to obtain their support in
developing their business by providing coffee milling machine for the producers. In addition, KPEL
also helped to mobilize loan from Pertamina (Oil Company) and other sources for producers.

Through this collective action, the coffee farmers under paguyuban were able to increase theirs
sales by more than 300 percent. The biggest buyer of their products was PT Nestle, but they also
sold to PT Indocom, Bubuk Intan Coffee Company, Kartika Hotel and Marcopolo Hotel. The sales
to PT Nestle still utilized intermediaries because Nestle required supplier accreditation in order to
guarantee the coffee quality. The Paguyuban was working to obtain accreditation to be able to
have their quota. If this was achieved, the surplus of the earnings would be used for constructing
storage and drying places.

Paguyuban aimed hopes to become a medium-scale trading house under their ownership and
management. KPEL continued to support in terms of training on quality control and marketing to
help PPK to reach their goals. (Annual Report 2002, KPEL, Bappenas, UNDP, UN-Habitat.)

Findings:
a) Assistance approach was the proper method to implement development approach such as
KPEL
b) The adoption of multiple approach was in line with the characteristic of multiple
stakeholders

The impacts/outcomes of the KPEL program in Kabupaten Tanggamus, among others:

a) There was a substantial public support that contribute to the KPEL implementation

79
 b) The establishment of FKKPEL allowed various stakeholders to sit together and developed
joint activities
c) Financial support from the local government (kabupaten) expressed by the allocation in the
local budget of 2002, 2003 and 2004 (the 2004 local budget has not yet approved by the
local council)
d) Lampung Provincial Government cooperated with coffee exporter association in Tim
Pembinaan Perkopian (Coffee Development Team) even though KPEL will not fully involve
in the process
e) Capacity of the stakeholders was greatly increased
f) Farmers has new insight on increasing the quality and processing coffee (mixing Robusta
and Arabica) to produce ground coffee, packaging and put their own brand to give value
added to their products. The coffee producers (some of them) have received SP or health
certificate for their ground coffee given by related government unit (health unit). They act
under Paguyuban Petani Kopi that continues active after KPEL program ended.

Box 4.3
Lampung Coffee Trade

“The example of coffee producers’ partnership with traders in Lampung demonstrates the
benefits of expanded producer-trader networks. Thanks to KPEL, coffee producers in
Lampung Barat have found a new market. They sell their coffee beans to a trader based in
the city who packages the coffee for distribution across the whole of Indonesia. Coffee
producers’ income has increased and so has the traders.” (Tatag Wiranto, KPEL
Achievements, Donor Conference, August 2002)

The KPEL program in the Lampung Province has been conducted in Kabupaten Tanggamus and
Kabupaten Lampung Barat, both are coffee economic cluster. All coffee producers in the province
are farmers or community; there is no coffee estate that belongs to the state or private owners.
Based on the interview, the program in Kabupaten Lampung Barat is not as successful as in
Kabupaten Tanggamus. The program in Kabupaten Tanggamus took place in Sub-district Pulau
Panggung and it was focused in the sub-district. The Sub-district is the largest robusta coffee
producer in the Kabupaten.

The constraint during its initial implementation was the lack of trust from the coffee producers or
farmers, because they have been disappointed by previous national government projects or
programs. They thought it had the same patterns as the old programs which they felt did not give
them any benefit in the long term (only providing or distributing cash funds, credits or training
workshop and then stopped, a project base). At first, the selection of coffee cluster was also
questioned because many considered coffee producers are already rich hence they do not need
assistance. The findings in the field showed that the farmers still need helps in order to make them
live in a better quality of life. The efforts of PSU in disseminating the program and approaching
stakeholders including farmers received fruitful results, the program gained trust from the farmers
and they felt that the program is beneficial and they were willing to participate and keep active until
presently. This is what we found in Sub-district Pulau Panggung.

The local government (particularly Bappeda) has been strongly supporting the program. Their
support also reflected in the allocation in the local budget to support the sustainability of KPEL
program in the Kabupaten. The Forum Koordinasi Kemitraan bagi Pengembangan Ekonomi Lokal
(FKKPEL) was established by a decree of Bupati (No. B/83/Bappeda/HK/2001).

Although the KPEL program ended in 2002, the Paguyuban Petani Kopi (Association of Coffee
Farmers) that was initiated by KPEL continued actively to promote their coffee. The number of
farmer group joining the association kept growing starting by four to fourteen. The regular monthly
meeting was still routinely held facilitated by Dinas Hutbun (Forestry and Plantation) providing the
venue, snacks and beverages.

80
The coffee farmers are still struggling to market their coffee beans and ground coffee; the farmers
stated that the price of coffee is not sufficient yet to improve the welfare of the farmers. They said
that farmers benefit only 30 percent of the price that they received from buyers. However other
sources mentioned that the coffee price received by farmers already accounted 85 percent of fob17
and the coffee selling is really based on world market price and the price received by the farmers is
quite good. KPEL program had already put efforts to facilitate coffee farmers to meet with buyers to
expand their market; however they have not reach agreement on the coffee bean quality, quantity
and price. Even though the farmers claimed that they were able to meet all given buyers’
requirements but the fact reveals that sometimes they could not meet the requirement. Aside of it,
the coffee farmers still have lack of trust to buyers’ commitment and often farmers are hesitant to
continue transaction with the buyers. For marketing purposes, the farmers would bring their coffee
beans to the buyers. The farmers also received training to produce ground coffee to put added
value to their coffee beans. Several village farmers have obtained SP (sertifikat penyuluhan)
similar to health certificates from Dinas Kesehatan (Health Unit) of Kabupaten, the SP was a
subsidy from the local government. The Paguyuban helps to market the ground coffee. The sales
of ground coffee are still in local scale, mostly friends and relative who buy in some (small) quantity
for re-selling and/or daily consumption. KPEL Program also persuaded coffee farmers to diversify
their farming instead of depending only to coffee. Paguyuban encourages the farmers to do so,
they grow other plants in their coffee estate (such as vegetables). This is to minimize their
dependency to coffee and to improve their weak position as opposed to coffee buyers and to have
other income when coffee price is dropped.

The impacts of the program on the farmers:

- Under Paguyuban their position has been strengthened
- The communication among village farmers improved leading to better results
- They are now able to sell their coffee beans collectively to achieve economic scale
- Expanded market for the village farmers’ groups; however marketing still encounters
problems particularly in price

The achievement indicators in Kabupaten Tanggamus were the continuing support of the local
government, the establishment of Paguyuban Petani Kopi which is still active in improving farmers’
welfare, the increasing earnings of the farmers, diversification plantation (mix with coffee) and
producing ground coffee.

The key successes of the program in Kabupaten Tanggamus were:

1. Strong Leadership at the local level, particularly the role of leaders of the village farmers’
groups who have commitment and a strong vision to improve the farmers’ welfare by
exploring the possibilities for new approaches. Also the leadership within the Department of
Forestry and Plantation as facilitator of partnership, networks, training and policy
2. The support of the Local Government
3. Good Facilitators of PSU, they mobilized the support and utilized it to build the capacity of
the farmers by assisting them to identify the problems they encountered and encouraging
them to find alternative solutions, developing space for dialogue and interaction through
meeting and partnerships. Facilitators also played a catalytic role introducing new topic of
discussion and options18

The comparison between the impact of KPEL Program in Kabupaten Tanggamus and Kabupaten
Lampung Barat is briefly described below.

17
FOB is “free on board”, the price which includes transportation cost, quarantine, documents at the seaport
18
Cited from “Organizing Coffee Farmers in Pulau Panggung”, p. 10

81
 KPEL Program in Brief Note
Lampung Province
Kabupaten Tanggamus, KPEL program has been able to motivate village farmers
Sub-district Pulau and it was supported by local government (Dinas Hutbun)
Panggung also there is a strong will from village farmers. The local
leadership plays important role as they have strong
commitment and vision to improve coffee farmers’ welfare.
The support of local government (Kabupaten) was properly
in place, it also decided that the location of the program
conducted in one kecamatan. Consequently, it was focused
and concentrated, distance has not been a problem.
Proximity to local market is its asset. There was a
Government program (KIMBUN) which had been taken
place before KPEL came in, KIMBUN is a program from the
Ministry of Forestry and Plantation to improve coffee
farming.

Kabupaten Lampung Barat The support of local government was also compelling. The
local government applied equality principle to launch the
program in Kabupaten, therefore all kecamatan received the
program. Therefore, it was scattered and geographically
constrained because the distance of each kecamatan is too
far away, consequently the program had several problems
such as communication difficulties and it became unfocused.
Unfortunately, there was also lacking of strong leadership at
the local level who was found to be one of key success in
Kabupaten Tanggamus.

4.3.5 Lesson Learned

The public dissemination took time, especially when PSU approached the provincial
government but later on KPEL program was received and supported.
The public dissemination was needed to ensure commitment of each stakeholder in
FKKPEL, particularly Local Government. The Bappeda has a clear vision regarding local
economic development and perceived KPEL Partnership model as an applicable engine
growth for sustainable local economic development in the region.
Willingness to sit together is prerequisite and important. Aside from the right strategy, the
achievement of partnership requires willingness of the long time dominant parties
(government and large companies) to be able to listen, appreciate and accommodate the
aspiration of farmers and small producers and further lowering their dominant role.
The ability to map out functions and distribute them in affair manner will support the
achievement of the Partnership to meet the goals. The ability will give clear tasks on who
should do what to meet accountability.
Communication and Coordination. The achievement of Partnership to look at the problem
comprehensively and to communicate with the other stakeholders will help to the
effectiveness of the partnership.
Trust. It is important to gain trust from stakeholders to make the program works. They
obtained it by conducting training, providing assistance to coffee producers.
Partnership will work if only there is a balance of power of each stakeholder.
Capacity Building should be a continuing process, not a one time only.
Capacity building should cover individual technical skill of producers and their collective
capacity.

82
 Externalities cannot be avoided such as the dropped coffee price in the world market. The
farmers are suggested to grow other plantation (diversification) in their estate and they
apply it.

Constraints:
New Bupati just took office (the head of Kabupaten) at the time of implementation starting
phase. New leader will affect the function of Partnership (different policies will apply).
Government units were occupied to restructuring coordination function and it affected the
Partnership activities.
Conflict of Interests. Horizontal and vertical conflict, among stakeholder and different level
of government.
The price of coffee has dropped in the world market; nonetheless the farmers are still
optimistic that the price will rebound.
Low quality coffee also the problems besides the low international price and farmers need
to be trained and supported financially.

4.4 Rural-Urban Linkages in Yogyakarta Special Region

4.4.1 Background

Kasongan is a small village in Kabupaten Bantul, DI Yogyakarta province. The province will be
described briefly followed by the Kabupaten and Kasongan village as the main subject. The
relationship between the Kasongan village and the province is very strong because they support
each other; therefore it is important to include the province in the report.

The Province of DI Yogyakarta

Yogyakarta Special Province is located in the centre of Java Island with Yogyakarta as the capital
city. The province is partially terrain and hilly in the southern part. The province is delineated by
Indonesia Seas in the south, and Central Java Province in the west, north and east. The coverage
area is 3185.80 km2 consisted of 4 kabupaten and a city.

Table 4.11 Special Region Yogyakarta

City/ Capital Coverage Percenta Sub- Keluraha

Kabupaten area (Km2) ge (%) district in n/ Desa
Total in Total
Kulonprogo Wates 586.27 18.40 12 88
Bantul Bantul 506.85 15.91 17 75
Gunung Kidul Wonosari 1485.36 46.63 18 144
Sleman Sleman 574.82 18.04 17 86
Yogyakarta Yogyakarta 32.50 1.02 14 45
Special Region 3185.80 100 78 438
Yogyakarta
Source: DIY in Figures, 2002

In 2002, the population of the province reached 3,360,348 people with 50.5 percent female
population and 49.5 percent male, the population growth is 0.97 percent. Kabupaten Sleman and
Kota Yogyakarta have the highest population growth, 1.52 percent and 1.29 percent. This resulted
from the high migration flows into the two areas.

83
 Table 4.12 Population based on 2000 Census in DIY

City/ Kabupaten Population Percentage

Male Female Total
Kulonprogo 218,248 228,595 446,843 13.30
Bantul 385,156 401,461 786,617 23.40
Gunung Kidul 367,307 382,568 749,875 22.31
Sleman 430,178 439,408 869,586 25.88
Yogyakarta 261,723 245,704 507,427 15.11
Propinsi DIY 1,662,612 1,697,736 3,360,348 100
Source: DIY in Figures, 2002

The economy of the province

In 2002, rice production reached 653,577 ton (1.24 percent decrease from production in 2001).
Among the potential commodity is salak or snake fruit, 2002 production was 368,112 ton or fifteen
times of 2001 production. The large and medium scale was 394 units in 2001, while in 2000 were
397 units. Accordingly, there is a decrease in labour from 42,337 in 2000 to 41,775 in 2001 at 1.3
percent.

The trading of export and import in 2002 exports amounted to US$ 110.140 million, an increase of
9.02 percent in 2001 which amounted to US$ 101.028 million. The increase is followed by export
volume 36.89 thousand ton in 2001 to 37.23 ton in 2002. The destination for rice export is the
United States around 43.39 percent of total export.

In terms of finance in 2002, the local revenue was 481.64 billion, 5.44 percent increase of 2001
realization amounted to 456.77 billion. The expenditure in 2002 was 445.74 billion rupiah or 26.57
percent increase in compare to the previous year. Routine expenditure is the largest portion
reaching to 80.61 percent, development expenditure is 13.59 percent and UKP (Post and
Calculation) accounted to 5.80 percent of total expenditure.

4.4.2 Physical-Geographical Conditions

Bantul is a district in the province of DI Yogyakarta, the Kasongan village is located in the district.
The acreage of the district is about 506.85 kilometers square, consisting of 17 sub-district, 75
villages, and 933 “dusun”. The district is 10 kilometers to the south of Kota Yogyakarta The
acreage of the district is 506.85 kilometre square, the district is neighbouring with Sleman district to
the north, Kulon Progo district to the west, Gunung Kidul district to the east, and Hindia Ocean to
the south.

The topography of the district is characterized by lowland terrain, hilly and coastal areas. The
lowland areas is situated in the middle which is also the rich soil, the hilly side located in the west
and east part, while the coastal area in the southern part. The mix topography creates a beautiful
panoramic picture of Bantul district, the temperature is in the range of 20 – 34 centigrade.

4.4.3 Social, Economic and Demographic Conditions

The population of Bantul is approximately 800,000 persons in 2003, the average population density
is 1,560 persons per kilometre square. The density is quite high to compare with the neighbouring
districts; Kulonprogo and Gunung Kidul. In the last 10 years (1990-1999), the population growth of
the kabupaten is 0.95 percent. Among those who work, 31 percent involved in agricultural, about
57 percent of the whole population of Bantul rely on the sector. It reveals from the land use for
agricultural of more than 40 percent (46.2 percent).

The Gross Domestic Regional Product (GDRP) per capita at current market price in 1998 was Rp.
2,324,500 increased to Rp. 2,608,341 in 1999 and raised to Rp. 2,905,158 in 2000. The
agricultural contributes the largest and is the most dominant sector in GDRP until 2000, reaching
29.65 percent of total GDRP. In 2000, the economic growth was doubled than of 1999, up to 3.06

84
percent. The largest sector contribution that affected the economic growth is the manufacturing of
5.86 percent, followed by services (3.72 percent), trading, hotel and restaurant (3.67 percent), and
agricultural (3.61 percent).

Bantul District has 16.596 hectares of paddy field in 2000 consist of:
- Technical irrigation: 1213 ha
- Semi technical irrigation: 12516 ha
- Modest irrigation: 587 ha
- Non technical irrigation: 159 ha
- Rain catch: 2121 ha

The dominant agricultural activity is food plantation and horticulture (rice, corn, red bean, soybean,
garlic, chilly and others. The contribution of land fisheries and sea fisheries as well as plantation to
the local economy is small. The other potential is tourism (natural, religious, cultural and
handicraft). This is a potential sector needs to be developed further to increase local own revenue
and community at large. The tourism prospective areas are Kretek, Imogiri, Sanden, Srandakan,
Pajangan, Kasihan and Piyungan. The handicraft industrial along with its centres has an important
role in supporting tourism, such as terracotta, leather, woodcraft, batik and others that can be
found in Sub-district Kasihan, Pundong, Imogiri, Sewon, Pajangan and Pandak. The marketing of
the product is in regional and international scale. In terms of transportation network, the condition
of asphalt road has only covered 69.41 percent and the rest is non asphalt (November 2000).
Bantul provides labourers to Kota Yogyakarta, however most of them are unskilled workers thus
they are difficult to reach standard of living.

4.4.4 Legal/regulatory framework

The institutional framework in Kabupaten Bantul is similar to that of other Kabupaten in the country.
The body that responsible for conducting planning for the region is Bappeda. The body formulates
planning in all aspects including physical and non physical and then they present the plan to DPRD
(local council) to obtain their approval. In the case of budget allocation process, all dinas propose
their budget plan to Bappeda. At this phase, Bappeda then scrutinize the proposed budget coming
from all dinas and revise them based on priorities. Bappeda then, forward the whole proposed
budget to Panitia Anggaran Kabupaten. The Panitia Anggaran will revise the proposed budget
according to their priorities and the final proposed budget will then be presented to DPRD (the local
council) as the proposed APBD of Kabupaten Bantul. It is in the hand of DPRD to approve or to
disapprove the draft APBD. All dinas are responsible to implement their programs which have been
approved in the APBD.

4.4.5 Brief history of the RUL phenomenon

Kasongan Village is one case of RUL in Special Region of Yogyakarta. Kasongan is the name of
village in the province, located in Kabupaten Bantul about 10 kilometers from Yogyakarta. The
population of the village is 1170 million and the acreage is 105 hectare. The community in
Kasongan produces pottery/terracotta, and they are very famous for the production. In 1999, about
2.2 million kilogram of pottery has been exported with total value of US$0.81 million. The countries
of the export destination, among others: United States, Australia, the Netherlands, France, United
Kingdom, New Zealand, Singapore, Canada and Japan. The products included household items,
plantation, as well as furniture and souvenirs. Since they export their products the economy of the
village has been increasing and the village has become a tourist attraction.

Kasongan had been through several stages to come to its present development. There have been
many efforts to improve the living of craftsmen in Kasongan village, coming from individuals,

85
members of civil society and institutions. In the mid-1980s Kasongan terracotta started attracting
attention and craftsmen in Kasongan had the opportunity to market their product overseas. The
use of terracotta as flowerpot by the whole community, so called “Flowerpot Movement” helped to
popularize it. The movement was an effort to urge craftsmen in Kasongan to produce and to sell
their terracotta production. The development of Kasongan Village has been through many
transformations and the village also has become a market place for many handicrafts coming from
outside the village.

A study (conducted by AKATIGA) mentioned that during the crisis (1997) the market demand had
increased from local and international demand. Although the raw material price has increased as
well - particularly paint - it could be compensated through higher selling prices. The Bali bomb
tragedy affected market demand temporarily but it recovered. The producers have already
established direct connection with foreign buyers in many countries, especially the large and
medium enterprises. For some period after the Bali tragedy in 2002, there was a decrease of 25
percent of retail because not so many buyers came to the village Some of the producers sell up to
90 percent of their production to buyers coming from foreign countries. The pottery had been
exported starting in 1980s The data from Dinas Perindustrian, Perdagangan dan Koperasi shows
that there are 40 country destinations for exporting the products: Japan, Denmark, Malaysia,
Australia, United Kingdom, Singapore, New Zealand, Germany, Italia, Norwegia, USA, France,
Spain, North Africa, Argentina, Ireland, Brazil, Canada, Taiwan, India, Philippines, Sri Lanka,
Georgia, Portugal, Belgium, Ethiopia, Turkey, South Korea, Reunion, Switzerland, Hongaria,
Lebanon, Austria, Hong Kong, Greece, New Caledonia, North Korea, the Netherlands, Mauritania,
and Saudi Arabia.

Some owners in the village have their own website to promote their products, therefore their
products are easily found and they are easy to communicate with buyers from around the world. In
addition, Badan Pengembangan Perekonomian dan Investasi Daerah (Bapekoinda) or Local
Economic and Investment Development Agency has its own website (www.bapekoinda.com) that
listed the name of entrepreneurs who export their pottery. Kabupaten Bantul also launches another
website other than their official website (www.bantul.go.id) to promote their region for investment
and products. The small scale enterprises may register their business and they will be listed in the
website. The purpose of the launched www.bantulbiz.com is to open the access for craftsmen and
small and medium scale enterprises to international market. The facility is given for free to those
who are interested. The website is organized by the local government and they hope that the
language barrier for craftsmen and SMEs in marketing will be solved. The website is developed
into five foreign languages and the webmaster will translate all letters so that the users (business
persons) will understand the communication.

The following table shows the characteristics of entrepreneur in Kasongan based on local criteria
according to business and marketing pattern.

Table 4.13 Classification of Pottery Industry - Kasongan

No Criteria Large Medium Small

1 Labour More than 50 people 6 – 50 people Less than 5
2 Omset More than 5 million Between 500 thousand Less than 500 thousand
(rp/month) rupiah to five million rupiah rupiah
3 Technology Having a machine Rent the machine manual
4 Market Export directly - Export by middlemen Within province (
- local (Jakarta, Yogya surroundings)
Bandung, dll)
Source: Akatiga, Pottery Industry Case– Kasongan, DI Yogyakarta. Findings in the field, Yogyakarta, July
1998.

The monitoring by UPT (technical unit) of Kasongan in 1998 to 2000 showed an increase in
community income and value added to the region, it amounted to 4.4 billion rupiah in 1998 and
increased to 5.5 billion rupiahs in 2000. The figures are collected from terracotta production in
Kasongan. The production has opened employment and income to local community. The terracotta

86
production has become important export product that brings positive impact to Bantul District and
Yogyakarta Special District.

Table 4.14 The Development of Pottery in Kasongan - DIY

Detail 1998 1999 2000

1 Business unit 338 358 365
2 Labour (person) 1549 1600 1627
3 Equipment value (million rupiah) 697 1147 1312
4 Selling per annum (million rupiah) 4724.5 6690.9 6995
5 Production per annum (million rupiah) 6456.1 8280 8645
6 Raw material per annum (million rupiah) 2034.4 2976.8 3112.5
7 Value added per annum (million rupiah) 4421.7 5704.2 5532.5
8 Export of large container 109 108 157
9 Export of small container 167 178 125
Source: UPT Perindustrian – Kasongan Kabupaten Bantul, 2001
cited from www.bi.go.id/sipuk/lm/ind/Gerabah/Tabel%203.1htm

Table 4.15 Data of Pottery Production in Desa Kasongan 2002

Number of manpower Production Investment Production Raw Value

unit unit (thousand (thousands) material added
rupiah) (thousands) (thousands)
1 Bangunjiwo 397 1897 970,400 1,366,800 6,977,300 3,080,700 3,896,600
2 Beton 33 95 93,000 10,065 890,750 705,500 577,000
Source: Dinas of Industry, Trading and Cooperatives, Bantul District

Table 4.16 Export Realization in Bantul District in 2002

2002 2003
Volume Value Volume Value(US
(kilogram) (US $) (kilogram) $)
Terracotta 47,988.79 46,550.86 779,259.35 638,788.92
Source: Dinas of Industry, Trading and Cooperatives, Bantul District

Land Transportation Infrastructure

A new bridge has been constructed that allows large container trucks to cross Kali Winongo thus
pottery products can be transported. (Kompas, 22 January 2003).

Raw Material
The raw material used to produce pottery come from surroundings areas (villages) which are
Bangunjiwo (Kasongan), Bayat (Klaten), Wonosari and Godean (Yogyakarta). (Pikiran Rakyat, 6
April 2003) The craftsmen and resource persons in the location confirm about the source of raw
material (clay) and wood for burning the pottery also come from other places (in vicinity).

Key Success
The artisan/craftsmen have already established a wide market, local and internationally. Initially,
the owners offered their products to other regions but nowadays buyers come to the village
originating from around the world. The small producers take advantage to export their product
without doing any promotion by themselves. A small number of producers are able to export their
product directly, while the small ones export their products through middlemen. The large and
medium enterprises have their own channels (buyers) to export their products. Most of the small
enterprises provide pottery for local demand (around Yogyakarta and surroundings) and provincial
(outside Yogyakarta). In short, their products have the demand to be able to sustain the economic
activities.

Intervention by other parties

87
There have been many interventions occurred in the village. Since then, the craftsmen/artisan in
the village are able to improve the quality of their product so that the pottery have higher art value
and more attractive to consumers. The existence of formal institutions in Kasongan including UPT
(Unit Pelayanan Teknis) and the cooperatives have relatively small contribution to producers. UPT
is being utilized to provide raw material particularly by small enterprises (AKATIGA). Our findings
from the site, reveals that they also buy the raw material by themselves.

Box 4.4
Example of Partnership in Desa Kasongan

The example of partnership is the collaboration of a cooperative and the National Art University.
The scheme bellows explains the structure of partnership among cooperative, Art University and
the members.
Structure of partnership

Bargaining
Bargaining Product

Material Cooperative Wholesalers

Supplier
Market Info

Material
Service Membershi Products
including p
Support loans

Members of
Art University the Consumers
and Schools cooperative
Support Products

Member of partnership

Actions

The cooperative called KOPINKRA SATYA BAWANA, it was established by producers and 93 of
producers become the members. The cooperative acted as the intermediaries who take orders
from consumers/buyers and inform them to the producers, it has been supporting the development
of its members. The cooperative also procures raw materials, and provides loans for investments
or operational needs of the members. Their products includes ornately designed and often colour
vases, bowls and jugs, as well as other household goods such as stools, candleholders, picture
frames made from ceramics. The productions are handmade and designs are adjusted to both the
domestic and foreign markets. The cooperative is the base of the partnership. The producers
received training and information from the cooperative and the Art University in Yogyakarta helps
them with the design and production mainly through individual channels. The lesson learned is the
producers must keep balance between competition and communication among themselves as the
key success of the partnership.

Source: JBIC Institute and JBIC, Special Assistance for Development Policy (SADEP) for Region-
Based Economic Development Strategy, Field Study Report, February 2002.

Note: However, our findings at the location found out that the above cooperative is no longer listed
in the Dinas Perindustrian, Perdagangan, Koperasi. A source at the dinas explained that
cooperatives are not actually utilized by SMEs producing terracotta in Desa Kasongan and many of
them are no longer operated.

88
4.4.6 Government Interventions

Local Government (District Level)

The head of Dinas Perindustrian, Perdagangan and Koperasi (office of industry, trading and
cooperative) of the kabupaten indicated that the intervention of the local government at present
time is indirect. The government is putting its best efforts to create a conducive business climate in
terms of situation and mutual treatment to all parties. It is followed by marketing supports such as
website provision (www.bantulbiz.com) that is provided to interested craftsmen and enterprises at
no charge. In addition, the local government does not charge or put levy/retribution to
producers/enterprises for exporting as well as to containers that coming to the village for
transportation purposes.

The local government also provides training, equipment provision and organize UPT (Unit
Pelayanan Teknis) or Technical Unit. UPT is functioned as training centre and showroom. UPT
was initially established by national government through Ministry of Industrial and the local
government is further responsible to operate UPT. The operational cost comes from the local
budget allocation. The national government through one of its ministry – Ministry of Industrial and
Trade – contributed one equipment (oven) that can be used by craftsman and enterprises in 2003.
This shows the interest from the national level to pottery in Kasongan.

4.4.7 Lesson Learned

The impact of the development of Kasongan village has attracted many tourists coming from within
the country and overseas, and this has made the village as tourism destination (it is known as
tourism village). The impact has created spreading economic activities to neighbouring areas, and
the Kasongan village has become a market place for handicrafts made in other places (outside
district and even province).

The process was initially started by concerned groups who have sympathy and support to
terracotta craftsmen. The achievement of those craftsmen and enterprises was stimulated by
external interest in terracotta products that persuaded craftsmen to produce terracotta and improve
their skills so that they are able to create various types of terracotta and make their production
more attractive to community at large. The village was also helped by its location near Kota
Yogyakarta along with good transportation network; therefore the delivery of their products can be
done without having a serious problem. The location also made it easy for many buyers to come
directly to the village. In terms of labour, the village provided skilled labour and also labour from
outside the village which work according to their skills. The involvement of key actors and
provincial government in launching “Flowerpot Movement” in 1980s also had a big impact in
marketing and making the terracotta well-known to the public and had helped the development of
Kasongan.

The government support to Kasongan village has been there for a long time, but the enterprises
(particularly the medium and large scale) had been deemed able to support themselves; therefore
they do not need specific supports from the government. The key success of terracotta production
is their specific skills, the raw materials that easy to obtain, good transportation network that helps
a lot to marketing that the buyer could come directly to the location, banking facilities, as well as
many visitors who come to the village. The situation has made Kasongan village a tourist attraction
and many handicrafts from other places are now marketed in the village. The government has also
supported in providing transportation networks (including bridge construction); therefore the
craftsmen can continue live in the village and produce terracotta for their living. However, without
outsiders’ intervention that had concerns to the craftsmen, it would be difficult to the people of
Kasongan to reach to the present stage.

89
The specific skill of craftsmen, skills improvement by outsiders (concerned groups, members of
civil society and individuals), accessible raw materials, capital, transportation network, unique
terracotta production, the proximity to Kota Yogyakarta as one of the main tourist destination, good
access, telecommunication and District government support, as well as popularity are the key
success of Kasongan Village to their present condition.

Table 4.17 Roles in Kasongan Villages

Actors Roles
a. Craftsmen/artisan (local and non local) to produce terracotta based on their
specific skills
b. Individuals, member of civil society playing important roles in developing the
craftsmen and terracotta production at its
initial development. In terms of skill
development (art skill), and persuaded the
craftsman to produce, and to popularize
Kasongan and terracotta nationally and
internationally
c. Enterprises/producers to recruit craftsmen to produce terracotta
buy raw material (clay and wood) from local
and outside the village
provide employment and income to
craftsmen
provide terracotta for sales and exports
source of income to the local government
d. Sub contractor (outside the village) order terracotta and do finishing in their
original location
as marketing chain of Kasongan products
e. Buyers as end users
buying for sales and exporting purposes
f. Local government (district) provide conducive business climate
no levy/retribution to burdensome the
enterprises
provide transportation networks (roads,
bridge)
provision of technical unit or UPT
provision of the website
g. National government Initial development of technical unit or UPT
(Ministry of Industrial)
Equipment provision
h. Association (in this case, ASMINDO, a Facilitate marketing for its members in
national level association that have Kasongan (exhibitions, information
branches in the provinces) regarding “bad buyer”, help channelling
loans from SOE)

4.5 Conclusions

4.5.1 Comparative Analysis: KPEL-related RUL and Non-KPEL related RUL

The next table shows the difference of the characteristics between Kabupaten Tanggamus and
Kasongan Village.

90
 Table 4.18 Comparison of the Two Cases

Characteristics Kabupaten Tanggamus Kasongan Village

(KPEL) (Non KPEL)
a. Commodities Coffee, ground coffee Terracotta
b. Type of activities Agricultural Handicraft, SMEs
c. Raw material Coffee plantation Clay, firewood
d. Characteristic Economic cluster Tourism Village, handicraft
village
e. Actors Coffee producers Craftsmen /SMEs (Desa
(Tanggamus), local leaders Kasongan)
f. Initiator National government, UNDP Local individuals, members of
civil society
g. Forum FKKPEL public private Informal groups among the
partnership, Paguyuban owners of enterprises
Petani Kopi (association of
coffee farmers). Paguyuban is
legalized by Akte Notaris
(Notary Public certificate)
h. Other intervention Previous national government Concerned groups/individual,
program (e.g. KIMBUN) national and local government
support
i. RUL phenomena The flow of coffee beans and The flow of terracotta to other
ground coffee to outside regions and international. The
Tanggamus (locally and to usage of labour from
international market) surrounding areas.
j. The function of RUL It is still in initial phase but It performs well, the economic
because of KPEL program, it activities in the village is
is now developing and operated well. The local
improving the economic people can remain living in the
welfare of the farmers village to work in pottery and
get earnings for their living
k. Sustainability It is still requires a long Supported by specific skills
process although the activities and the interest of wide
as result of KPEL program community to terracotta (the
implementation are continuing demand is there), the
and responded by the farmers sustainability is apparent.
positively. The
institutionalization of the
program has been working.
l. Obstacles Marketing and the fluctuating The competition of products
world coffee price, low quality from other countries (China,
that make them difficult to Vietnam, Thailand) however
enter international market the product of Kasongan is
unique (terracotta)

4.5.2 The role of government intervention

The government intervention in the two cases had an important impact. However based on the
cases, it shows that government intervention is not solely the key success of regional development
(RUL). Instead, local leaderships play important role in both cases and that is crucial for
achievement. Leadership with vision and commitment helps to motivate actors in economic
activities to improve their living. Nonetheless, local government support also contributes to the
sustainability as long they put their role properly in place. In KPEL, the government intervention is
very strong, starting from funding, programming, and implementation; while in non KPEL the
government intervention is not that strong as KPEL but their role is still exist. KPEL program
succeeded to motivate coffee farmers and strengthening farmers association before connecting
them to the world market.

91
 Government National program Donor support
intervention
Kabupaten Yes, very strong Yes Yes
Tanggamus
Desa Kasongan Exist, but not very No No
strong

4.5.3 Sustainability of Activities

Sustainability
The two cases (Tanggamus and Kasongan) are quite difficult to compare because there are
differences in terms of lifespan and the development process experiences. Kasongan has started
to develop since the 1970s and was assisted continuously by those who had concern with the
artisan/craftsmen and they were able to export the products beginning in 1980s to various
countries and continue to develop until now. While Kabupaten Tanggamus received KPEL program
in 2001 and ended in 2002 (only one year assistance); however due to committed local leadership
within the region the farmers are still very active and keep KPEL spirit in their activities.

Important to note is the role of local leadership and members of civil society in the two cases who
become the key success of achievement or sustainability of the economic activities. The local
government support also plays important role in both cases, especially in Kabupaten Tanggamus.
The supports in Desa Kasongan also come from the national government, provincial and
kabupaten who facilitate the artisan/craftsmen and enterprises.

Cases Sustainability of activities Remarks Supporting elements

Kabupaten Our findings from the field It faces uncertainties Strong local
Tanggamus which is based on interviewing such as fluctuating leaderships who have
resource persons showed that world coffee price and vision and
although the KPEL program low coffee product commitment to
has ended in 2002, the quality. Marketing is improve coffee
activities in Kabupaten still a big problem and farmers’ welfare and
Tanggamus are progressing. needs more efforts to the support of the
The coffee farmers group solve it. local government. The
under Paguyuban are working program also focused
together (through regular in one location (Sub-
meeting supported by local district Pulau
government) to explore all Panggung) and this
possibilities to improve their helps to minimize
market, coffee bean quality, distance problem.
producing ground coffee and Tanggamus is close
applying diversification in their to local market.
coffee plantation. The farmers
have benefited from the impact
of KPEL program, they
understand the importance of
strengthening their position
through Paguyuban
(association) and believe that
by doing collectively they will
gain more economic benefit.
The institutionalization of the
impact of the program works
well. The support of local
government also plays
important role to the
sustainability of the activities,
the local government has

92
 included financial support for
the forums in the local budget.
Kasongan Looking on how they can It is already well- There were members
Village survive and developing for known, a tourist of civil society (from
more than 30 years in attraction and very the city of Yogyakarta)
developing and marketing their close to Kota including a famous
products, the pottery of Desa Yogyakarta (one of artist who initiated to
Kasongan is considered the famous tourism encourage and
sustainable and has become destination in develop the skills of
the community’s potential Indonesia) artisans until they are
source of income. It has a good popularly known. The
prospective future, although assistance of concern
new competition exists from people had been put
other countries. The village has in place for many
become a tourist attraction years before they
within the province of came to the stage
Yogyakarta and also a place to they are now. The
market of many handicrafts linkages also
coming from surroundings supported by
areas. adequate
transportation network
and
telecommunication,
also promotion using
website supported by
the local government.

4.5.4 Overall Lesson Learned

The strength of commodities – terracotta and coffee – is one of the key for the sustainability of
activities. The function of RUL can be developed through long process, with helps and supports
from outsiders (concerned people or members of civil society) that continues to promote activities
in order to help them to develop by themselves. The popularity of the products (quality and
uniqueness) as well as transportation network supports and telecommunication play important
roles in the sustainability of specific commodities (terracotta). While for coffee production in
Kabupaten Tanggamus, public-private partnership may play an important role. However the
partnership still needs a long journey because there are many obstacles that need to be settled
down (for instance coffee price, quality, marketing). Exposing the farmers to the global market is
important, but more important is to build their capacity first thus strengthening their position before
they are ready to enter global market. The KPEL program implemented in Kabupaten Tanggamus
is focused in one location (Sub-district Pulau Panggung) and has succeeded to strengthen the
coffee farmers to certain level to increase their bargaining position, especially after they can act
collectively under Paguyuban (association). The program motivates the coffee farmers to improve
their living by making them realizes the strength of association, bring vision, supports and facilitate
them during the initial phase. The institutionalization of the program within the Kabupaten
especially among coffee farmers works well, Paguyuban just recently being legalized by Akte
Notaris (Notary Public certificate).

Both cases reveal the important role of local leaderships who have vision and strong commitment
to improve the living of local actors, also, willingness from local actors (craftsmen, farmers) to
improve themselves continuously with helps and supports that were put proportionally. The support
from the government (national and local) is also important because they can facilitate the
community if they are willing to do so.

93
References

Chapter 2 (Philippines)

BOOKS

National Statistics Office. 1990 Census of Population.

____________________. 1995 Census of Population.
____________________. 2000 Census of Population.
Pimentel, Aquilino Jr. Q. The Local Government Code of 1991: The Key to National
Development. Published by Cacho Publishing House, Inc., 1993.
Republic of the Philippines. Philippine Constitution of 1987.

JOURNALS

Cuaresma, Jocelyn C. “Reforms in Local Planning,” in Philippine Journal of Public

Administration, Vol. XXXVII, No. 1 (January 1993) pp. 1-22.
Sosmeña, Gaudioso C. “Local Autonomy and Intergovernmental Relations,” in Philippine
Journal of Public Administration, Vol. XXXI, No. 3 (July 1987) pp. 231-256.

PAPERS/MONOGRAPHS

Annual Report, Municipality of Canaman, 2002.

Comprehensive Land Use Plan, Municipality of Bula, 2000-2009.
Comprehensive Land Use Plan, Municipality of Camaligan, 1998-2008.
Comprehensive Land Use Plan, Municipality of Canaman, 1998-2000.
Comprehensive Land Use Plan, City of Naga, 2000.
Comprehensive Land Use Plan, Municipality of Pasacao, 2001-2010.
Metro Naga Development Council Physical Development Plan.
Municipal Development Plan, Municipality of Gainza, 1995-2005.
Municipal Development Plan, Municipality of Milaor, 1995-2020.
Municipal Development Plan, Municipality of San Fernando, 1997.
Municipal Investment Plan, Municipality of Calabanga
Socio-Economic Profile, Municipality of Magarao.
Robredo, Jesse M. “Linkaging Urban Centers and Rural Communities: The Metro Naga
Experience” in Seminar on Integrating Rural Development and Small Urban Centers. World
Bank, March 2003.

PROCEEDINGS

Seminar Workshop on Resource Mobilization: Scope of LGU Responsibilities and the LGU
Resource Framework, conducted by the Bureau of Local Government Finance, Department

94
 of Finance and the Local Government Academy – Department of the Interior and Local
Government, (200_).

UNPUBLISHED PAPERS

The Metro Naga Development Council 1993-2003: A Decade of Service. Prepared by Metro Naga
Development Council – Project Development Unit, undated.
Metro Naga Development Council Physical Development Plan. Prepared by Prepared by Metro
Naga Development Council – Project Development Unit, undated.

RESOURCE PERSONS/INTERVIEWEES

Mayor Jesse M. Robredo, City of Naga

Mayor Roberto Requejo, Municipality of Canaman
Mayor Romeo Gontang, Municipality of Gainza
Mayor Vicente Asido, Municipality of Bombon
Ex-Mayor Emmanuel Requejo, former Mayor of Canaman
Mr. Frank Mendoza, Executive Director, MNDC
Ms. Tess Rey, Project Development Office, MNDC-PDU
Engr. Henry D. Torres, Municipal Administrator, Calabanga
Ms. Amerial Cervas, Municipal Planning and Development Officer, Canaman
Mr. Ramon Romero, Municipal Planning and Development Officer, Calabang

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Chapter 4 (Indonesia)

Books, reports

Abidin, Z. (2001), “Pengalaman Propinsi Lampung dalam Pelaksanaan Program KPEL,

Akatiga (1998), “Pottery Industry Case – Kasongan, DI Yogyakarta”. Findings in the

field,Yogyakarta.

Bappenas (2001a), “KPEL Annual Report 2001”.

Bappenas (2002b), “KPEL Annual Report 2002”.

BPS - Lampung (2002), “Lampung Province in Figures”. Statistics.

BPS – Tanggamus (2002), “Tanggamus in Figures”, Statistics

BPS – Yogyakarta (2002), “DIY in Figures”, Statistics.

Dinas of Industry, Trading and Cooperatives, Bantul District (2003). Statistics

JBIC Institute and JBIC (2002), “Special Assistance for Development Policy (SADEP) for Region-
Based Economic Development Strategy”, Field Study Report.

KPEL (2002), “Organizing Coffee Farmers in Pulau Panggung”, Progress Report.

KPEL (2003), “Laporan Kemitraan Pengembangan Ekonomi Lokal Lampung”. A report

Ministry of Kimpraswil (2003), Agropolitan Development in Regional Development Framework,

Paper.

URDI (1998), “Poverty Alleviation Through Rural-Urban Linkages (PARUL)”, Development Phase,
Technical Proposal.

The World Bank (2003), “Cities in Transition: Urban Sector Review in an Era of Decentralization in
Indonesia”, Working Paper no. 7, Urban Development Working Papers.

Articles in newspaper

Kompas (22 January 2003), “Keramik Kasongan- Terselamatkan oleh Hubungan Langsung Luar
Negeri”

Pikiran Rakyat (6 April 2003), “Menjual Yogya Lewat Kerajinan Gerabah Kasongan.”

Articles from the internet

www.bapekoinda.com, “Pottery: Terracota”

www.nafed.go.id, BPEN/Badan Pengembangan Ekspor Nasional,

www.tanggamus.go.id, RTRWK Tanggamus, 1999

www.bi.go.id/sipuk/lm/ind/Gerabah/Tabel%203.1htm, UPT Perindustrian – Kasongan Kabupaten

Bantul, 2001

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List of Persons met for interview

1. Aldi M. Alizar, SE, Info. Propag. & Dissem. Coordinator, KPEL Program, Jakarta
2. Drs. Yahya, Head of Dinas Perindustrian, Perdagangan, Koperasi, Kabupaten Bantul -
Yogyakarta
3. Parno, craftsman – Kasongan Village, Yogyakarta
4. Ibu Paimin, terracotta producers – Kasongan Village, Yogyakarta
5. Konstiyanto, KCD Plantation – Kabupaten Tanggamus, Lampung
6. Hamidi, Head of Paguyuban Petani Kopi – Kabupaten Tanggamus, Lampung
7. Suwarno, Head of a Village Farmers group – Kecamatan Pulau Panggung, Lampung
8. Ir. Zainal Abidin M.E.S, Head of Research Institution, Lampung University, Lampung

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