Development partnership in Indonesia
Overview of Australia’s aid program in Indonesia
How we are helping
2018-19 Total Australian ODA Estimated Outcome
2019-20 Bilateral Budget Estimate
2019-20 Total Australian ODA Estimate
The Australian Government will provide an estimated $298.5 million in total ODA to Indonesia in 2019-20, including an estimated $255.7 million in bilateral funding managed by DFAT.
How we work together
We work in an economic partnership, supporting Indonesia's efforts to tackle inequality and maintain social stability, promote tolerance and pluralism, and counter violent extremism. We provide policy and technical advice that will improve the quality of Indonesia's investments in infrastructure, economic governance, human development and social policy, including in the area of law and justice.
Why our work is important
While Indonesia has experienced steady economic growth in recent years and achieved substantial development progress, development across the country is uneven – poverty rates are seven times higher in Papua than in Java – and inequality remains a pressing challenge for the government. More than 72 million people in Indonesia continue to live under the World Bank's $3.20 per day poverty line. This context makes our work in Indonesia all the more important, because sustainable and inclusive economic growth in Indonesia benefits Australia and contributes to regional growth and stability.
Australia's Aid Investment Plan (AIP) 2015/16-2018/19 aligns with the priorities of Indonesia's National Medium-Term Development Plan 2015-19 (RPJMN). This plan sits under the country's National Long-Term Plan 2005-2025 (RPJPN) and sets out the Indonesian Government's vision and priorities for the country. The nine priority areas include good governance, improved productivity and competitiveness, human resource quality and self-sufficiency. Both the RPJMN and the AIP are currently being updated. The 2015-19 plan has a focus on eastern Indonesia to help address regional disparities in development, while maintaining growth momentum in other parts of the country.
Our development partnership with Indonesia is structured around the three objectives of our Aid Investment Plan.
Objective 1: Effective economic institutions and infrastructure
Improving economic institutions and infrastructure is essential to Indonesia's ongoing development.
Australia supports Indonesia's efforts to boost inclusive growth and productive jobs through refining its public policy and regulatory settings. We contribute to improved economic productivity by supporting financial sector stability, revenue mobilisation, and improved government spending and tax collection.
We work to increase access to agricultural markets for poor farmers in Eastern Indonesia, supporting economic growth and improving food security in the region.
We are helping drive infrastructure investment and growth through technical assistance and policy advice on regulations, planning and evaluation. A multifaceted approach, including more efficient use of government resources, careful project selection and preparation, and productive partnerships between the public and private sectors, will result in better infrastructure development.
Objective 2: Human development for a productive society
Indonesia needs to strengthen the development of human capital to create the conditions for higher growth. Our innovative education program works with schools to identify local challenges and opportunities to develop new approaches to tackle problems.
Our Australia Awards Scholarships deliver educational dividends for Indonesia's future leaders as well as valuable people-to-people links. Areas of study focus on a broad range of fields relevant to economic and development outcomes.
We are also working with Indonesia to prevent, detect and control emerging infectious diseases, a threat to Indonesian and Australian security, and we continue to prepare for and provide support to Indonesia during times of humanitarian need.
Objective 3: An inclusive society through effective governance
We work with Indonesia to ensure that the poor and marginalised in society benefit from economic growth, helping to meet Indonesia's poverty reduction targets by improving basic services and employment opportunities. We are helping develop better quality economic and social protection policies based on research and analysis. We are pursuing programs for women's economic and political empowerment, which help women gain jobs and other sources of financial security. Marginalised groups benefit from improved disability access and support as well as better local service provision. Having helped improve citizens' access to legal services, our law and justice work will shift to support for counter-terrorism, and prison and court reforms.
In 2018-19, Australian support contributed to:
- Indonesia reducing its administrative costs by over AUD1.7 billion, as part of the 2020 Budget process;
- Indonesia leveraging over AUD2 billion from multilateral banks and other sources to finance priority infrastructure;
- the maintenance and rehabilitation of more than 1,479 km of road in West Nusa Tenggara province;
- increasing incomes of 345,001 smallholder farming households by 252 per cent, including 225,000 women;
- a regulation to allow 16,921 small and medium size businesses to use home addresses for business registration–53 per cent of which are women-owned;
- the expansion of social protection to more than 9 million poor and vulnerable Indonesians;
- 1 million teachers accessing quality professional development programs to improve student learning outcomes in madrasahs;
- enhancing higher education outcomes through the provision of 250 Australia Awards Scholarships and over 300 short-term awards;
- improved water access for 5.7 million people and improved sanitation for 4.7 million people, including 12,567 people with disabilities;
- supporting partners on the ground providing critical health and gender-based violence services to 13,717 crisis affected persons.