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Indonesia

 
 

heading foldHow we are helping

2013/14 Estimated Outcome

$601.6 million

2014/15 Budget Estimate

$605.3 million

 

Consistent with Australia’s national interest, Australia’s aid supports a stable, democratic and prosperous Indonesia. The development assistance programme helps Indonesia spend its own funds more effectively to increase growth and reduce poverty. We align our assistance with Indonesian Government priorities and influence the quality of Indonesia’s own investments in economic growth and essential service delivery.

Australia and Indonesia have a partnership that covers a range of sectors that contribute to Indonesia’s economic growth and human development.

A hand placing a ballot in a box
Raising people’s awareness of electoral processes and supporting their participation strengthens democracy in Indonesia (credit: DFAT).

Australia’s aid investment in effective governance, infrastructure and private sector development will focus on Indonesia’s economic development. Programmes in 2014-15 include:

  • strengthening Indonesia’s capacity to formulate and implement policy in areas such as financial sector sustainability, tax administration, trade and public financial management. For example, recent programmes have supported Indonesia to add more than 443,000 businesses and individuals to the tax system
  • building a more supportive regulatory and policy environment for infrastructure investment and helping implement more effective programme management of infrastructure projects. Our investment is proving a catalyst for change in leveraging private sector investment and also creating incentives for local government investment in infrastructure, such as securing commercial loans for water utility projects. We have also invested in the development of a Public Private Partnerships Centre in the Indonesian Ministry of Finance to help address infrastructure needs in the APEC region
  • supporting Indonesia’s National Program for Community Empowerment (PNPM) which is contributing to Indonesia’s economic growth as a model of private sector facilitation and community-led planning that delivers economic benefits to the poorest 20 per cent. In 2014-15, the programme will invest in vital economic and social infrastructure, such as bridges and rural roads, through grants to villages.

Gender equality is a priority for our aid investment in Indonesia, specifically women’s economic empowerment and participation in decision making and leadership. We will also help reduce violence against women. Australia’s aid focuses on five priority areas where reform would make a significant difference for poor women, including increasing women’s access to jobs and removing workplace discrimination. Our assistance to PNPM has supported gender equality whereby 220,000 women’s microcredit groups have been established since 2008.

A woman sewing in a workshop
Misobah sews in her tenun workshop in Tlingsing village, Indonesia. The 36-year-old was recently trained in marketing and microfinance through an Australian-funded NGO (credit: DFAT).

In 2014-15, we will invest in education and health to help people contribute towards, and benefit from, economic growth, through:

  • professional development of education workers and improvements to education programmes and policies
  • awarding 515 Australia Awards Scholarships for study in Australia
  • reducing deaths from pregnancy and birth in the poorest regions by helping skilled health workers attend births
  • working with local governments to ensure health centres have qualified staff and adequate funding preventing the spread of HIV through testing and treatment, particularly in Papua and West Papua
  • providing payments for Debt-to-Health Swap, whereby Indonesia will invest in health programmes in exchange for cancellation of debt owed to Australia.

Australia is helping build resilience by working with Indonesia to develop better information about the threat earthquakes and tsunamis pose to Indonesia. Australia also supports disaster management training for disaster managers and civil society organisations with over 15,000 people trained to date.

Two doctors
The Australia-Bali Memorial Eye Centre provides sight restoration and blindness prevention programmes to combat preventable blindness which affects more than 50,000 people in Bali (credit: DFAT).


Archived details of expenditure for this program for 2013–14 can be found here.

Archived details of expenditure for DFAT’s aid program, following the Government’s announcement on 18 January 2014 to revise the aid budget, can be found here.

Health

Results 2011–2012

  • Australia is helping to improve maternal and neonatal health in East Nusa Tenggara, one of Indonesia’s poorest provinces. In 2011-12, the programme  trained more than 5,365 health care workers, which helped manage 4,830 newborn complications, in community health centres. This has helped save the lives of many women and babies.
  • Australia supports community health centres to deliver comprehensive HIV prevention services. More than one million needles and almost 600,000 condoms were distributed and 800 people referred to methadone treatment.
  • Approximately 600,000people with increased access to safe water, and around 110,000 additional people with access to basic sanitation or a public toilet.

Commitments 2012–2013

  • Australia will contribute to Indonesia’s efforts to reduce deaths from pregnancy complications.
  • We are expanding the provision of HIV testing and treatment in Papua and West Papua, estimated to reach over 20,000 people by 2016.

Additional investment in water and sanitation over 2011–15 will result in around 578,000 new water and 275,000 new sewerage connections.

Education

Results 2011–2012

  • Between 2006 and 2011, Australia has built or extended over 2,000 junior secondary schools, creating around 330,000 new school places, in some of Indonesia’s poorest and most remote areas.
  • Increased access to schools for children with disabilities by providing ramps, handrails and disabled toilets.
  • Offered a total of 637 Australia Awards for the 2012 intake. Australia’s support has helped to deliver training on financial management and planning to improve school quality for approximately 596,000 school officials and community members across Indonesia.

Commitments 2012–2013

  • Australia will provide more Indonesian children with a good education by establishing another 300,000 new junior secondary school places by 2016.
  • By 2016 we will develop and roll out a national system tofacilitate professional development for around 293,000 school and district government education officials.
For the 2013 intake, 664 new Australia Awards were offered, comprising 472 long-term and 192 short-term awards.  

Economic development

Results 2011–2012

  • Australia provided access to agricultural technologies for over 46,000 poor women and men in 2011.
  • Australia is continuing to rehabilitate, upgrade and widen the national road network in Eastern Indonesia. This included construction or rehabilitation of up to 110kms of high quality roads in 2011.
  • Australia’s funding to Indonesia’s National Program for Community Empowerment (PNPM) has encouraged women to be involved in their local communities. Female participation in PNPM is high, with up to 60 per cent of sub projects funded in rural areas initiated by women.
  • Australia’s funding is also going to PNPM Generasi, a pilot programme targeting health and education, reaching an estimated 4 million people in 3,234 villages across five provinces in 2011. A recent evaluation has highlighted that over the long term the programme will improve child malnutrition rates.

Commitments 2012–2013

  • Australia will assist around 300,000 poor farmers increase their incomes by at least 30 per cent by 2017.
  • Australia is helping Indonesia to address poverty reduction and critical infrastructure needs. By December 2014 we will have rehabilitated, upgraded and widened a total of 395 km of national roads in nine provinces of eastern Indonesia, bringing economic and social benefits to communities in some of the poorest regions.
  • Australia is providing world-leading expertise to help Indonesia develop its national carbon accounting system, an essential prerequisite of any REDD+ system.

Governance

Results 2011–2012

  • Australia has helped to strengthen government-to-government partnerships and policy dialogue with Indonesian government agencies.
  • Australian assistance strengthened management of Indonesia’s electoral system, including training 1598 election officials on election operations in 2011–12.
  • In 2012, 600 court officials and prosecution officers were trained in bureaucratic and anti-corruption reform, to achieve fair proceedings for justice seekers.
  • The Australia Indonesia Partnership for Decentralisation (AIPD) is improving local government  essential service provision, such as schools, health centres, local roads and water and sanitation. AIPD delivered programmes in ten provinces and more than 40 districts, including planning and budgeting consultations, with more than 3000 civil society  and community organisations.
  • In 2011 Australia helped improve Supreme Court case management practices, finalised service charters for the courts which set out justice seekers’ rights, and supported women’s civil society organisations to work with poor women to access justice.

Commitments 2012–2013

  • In 2012–13 Australia will train 1300 civil servants on better resource management, in particular public financial management and planning.
  • We will also support 180 civil society organisations to track service provision by 2014, resulting in partner governments becoming more effective at providing basic services to the poor.

Humanitarian

Results 2011–2012

  • The Australia–Indonesia Facility for Disaster Reduction (AIFDR) has helped the Indonesian Government establish a real time earthquake impact estimation system to enable rapid estimates of the number of people potentially affected in a disaster.
  • Australia has provided $2.2 million of disaster response equipment and training to help establish Indonesia’s first National Disaster Rapid Response Team,to help Indonesia more effectively assess and respond to future disasters.
  • In 2011, Australia assisted over 46,000 people to recover from two natural disasters which occurred in 2010: the Mt Merapi eruptions and the Mentawai Islands tsunami.

Commitments 2012–2013

  • AIFDR is working with Indonesia's largest faith based organisation and local governments to develop new disaster management laws in East Java. This will provide better protection from natural disasters for more than 12 million people.
  • When disaster strikes the region, Australia will deploy assistance within 48 hours.

Research overview

Good research can lead to positive change for the world's poorest by enhancing the design and implementation of development policies and programmes. That's why Australia is committed to an innovative research portfolio and funds research, including through:

  • competitive funding mechanisms (such as the Australian Development Research Awards Scheme)
  • research partnerships with different Australian, international and developing country research institutions
  • commissioning research to address a specific question or clearly defined research gap
  • one-off research grants, when an existing programme of research is relevant to the Australian aid programme.

More information on how we fund research

SMERU Research Institute

The SMERU Research Institute is an independent institution for research and public policy studies, focusing on various socioeconomic and poverty issues considered most urgent and relevant for the people of Indonesia. Since its founding in 1998, and with Australian support, the Institute has been at the forefront of the research effort to highlight the impact of government programmes and policies, and has actively published and reported its research findings. SMERU's research teams are formed by combining researchers from different disciplines.

In the social and economic fields, SMERU conducts studies on the impact and performance of government programmes and policies related to poverty, health and education. SMERU also focuses its research on the implementation of regional autonomy and decentralisation policies, particularly their impact on the provision of public services.

For a history of SMERU (which also contributes to our Knowledge Sector program), download The SMERU Research Institute: History and lessons learned [PDF 344kb].

SMERU Research Institute

Indonesia Project

The Indonesia Project is a major international centre of research and graduate training on the economy of Indonesia. Established in 1965 in the Australian National University's Division of Economics, now The Arndt-Corden Department of Economics, the Project monitors and analyses recent economic developments in Indonesia; informs Australian governments, business, and the wider community about those developments, and about future prospects; and stimulates research on the Indonesian economy.

The Project is well known and respected in Indonesia and in other places where Indonesia attracts serious scholarly and official interest. The Project obtains its core funding from The Australian National University; since 1980 the Australian Government has provided an annual grant through the Australian Aid programme.

For more details, visit the Indonesia Project website.

CSIRO AusAID Research for Development Alliance—Climate Adaptation Strategies for Rural Livelihoods in Indonesia

The CSIRO AusAID Research for Development Alliance—Climate Adaptation Strategies for Rural Livelihoods in Indonesia is a strategic partnership that aims to improve the impact of aid.

The Alliance aims to tackle important development challenges in the Asia-Pacific region through improved knowledge of climate, water and energy systems and by better understanding people’s vulnerabilities and options to adapt and manage their natural environment.

This CSIRO AusAID partnership provides an opportunity to introduce approaches to international aid delivery that better responds to the relationship between poverty and the environment. Alliance projects will achieve impact through influencing Australian Aid’s development policies, investments and projects, as well as informing international stakeholder policies and decisions.

CSIRO AusAID Research for Development Alliance - Climate Adaptation Strategies for Rural Livelihoods in Indonesia [external link]

Australia Indonesia Partnership for Pro-Poor Policy: Knowledge Sector Initiative (AIP4)

Australia commissioned twelve research products to support the design of the Knowledge Sector program. The proposed 'Revitalising Indonesia's Knowledge Sector for Development Policy' programme aims to enable Indonesian policy-makers to make evidence-informed decisions to meet its priority social development goals. The long term, comprehensive approach of the programme comprises strategies to strengthen Indonesia’s domestic knowledge organisations to produce high quality, policy relevant research and analysis; enhance demands for analysis in policy formulation processes; and address the regulatory constraints that currently inhibit the growth of Indonesia’s knowledge sector – defined as the overall institutional landscape of government, private sector, and civil society organisations that provide knowledge to support the development of public policy.

Paul M. Sutmuller and Ivo Setiono contributed to the Knowledge Sector analysis with their report, Diagnostic on Evidence-based Public Policy Formulation under Decentralisation. The report looks into process of local public policy formulation and implementation in the context of ten years of regional autonomy in Indonesia. It questions the degree to which local public policies are evidence-based, what are the demands and supply of regional governments’ need for improved sources of policy knowledge and the incentives and disincentives for greater use of knowledge by policy makers.

Another research product, Knowledge for policy: Regulatory obstacles to the growth of a knowledge market in Indonesia, found that the level and quality of demand for knowledge emanating from government is a very powerful determining factor in the nature of the knowledge market. Current institutional arrangements for the application of knowledge to policy are uncoordinated and dominated by the vested interests of various agencies and powerful individuals within them. Within government, divisions between different categories of staff create barriers between policy expertise and the policy decision-making process. This hinders the capacity of government to formulate its knowledge needs, to develop evidence-based policy and to use outside sources of research and advice.

Australia Indonesia Partnership for Pro-Poor Policy: Knowledge Sector Initiative (AIP4)

 
 

heading foldWhy we give aid

quote

Indonesia is an important neighbour in our region. More than 120 million Indonesians live on less than $2 per day. Australia is helping to save lives, opening up opportunities for the poor and promoting sustainable economic development, which is in the interests of both our nations as well as the broader region.

Find out more about why we give aid to Indonesia

 
 

heading foldHow we give aid

Australia is helping the Indonesian Government to better use its resources to assist the poor. Australia also works with several other partners in Indonesia including civil society, other donors, multilateral institutions and the private sector.

As Australia’s aid assistance to Indonesia grows, the education, infrastructure and social protection sectors will be priority areas for expansion.

Find out more about how we give aid to Indonesia

Read the Australia Indonesia Partnership Country Strategy 2008–14

 
 

heading foldProgress Against MDGs

  • Eradicate extreme hunger & poverty
  • Achieve universal primary education
  • Promote gender equality and empower women
  • Reduce child mortality
  • Improve maternal health
  • Combat HIV/AIDS, malaria and other diseases
  • Ensure environmental sustainability

Demographic and development statistics for Indonesia

 
 

Last reviewed: 25 September, 2014