Transactions for watershed protection services in the Segara River basin

Although formal governmental programs have not made the best of links between upstream land managers and downstream water users, several financial arrangements for water and related environmental services have sprung up independently in the Segara basin. Several of these can be regarded as investments of basic social capital to promote sustainable use of water in the area. Important downstream buyers of watershed protection services are the regional drinking water company PDAM and a tourist rafting company, Lombok Inter Rafting. In the future, these and other water consumers such as hotels, light industry and domestic users could be encouraged to provide financial contributions to watershed protection. They are the "potential buyers" of watershed services. However, considerable development of workable mechanisms for charging, transfer and investment of such funds will be needed.