Development partnership in Indonesia
Australia’s development partnership in Indonesia
- 2021-22 bilateral allocation [budget estimate]
- $255.7 million
- 2021-22 total Australian ODA [budget estimate]
- $299.0 million
- 2019-20 total Australian ODA [budget actual]
- $322.3 million
Australia and Indonesia are close neighbours, strategic partners and friends. The Australia-Indonesia Comprehensive Strategic Partnership has elevated our bilateral relationship and sets an ambitious agenda for deeper and broader cooperation across all facets of our partnership. We are committed to working together to build a prosperous and stable region.
Indonesia is facing a major challenge from COVID-19, made more difficult by the size and density of its population and of the archipelago itself. Health and economic impacts continue to unfold and threaten to erode Indonesia's hard-won economic and human development gains.
Australia and Indonesia have a long and proud history of supporting each other in times of need, and we have a shared commitment to combatting COVID-19 together.
Australia has reshaped our development partnership to work with Indonesia to respond to the challenges posed by the pandemic. Our approach is outlined in the Indonesia COVID-19 Development Response Plan.
Our partnership is helping Indonesia to maximise the effectiveness of its national response efforts. We are responding to Indonesia's priorities as set by its Committee for the Handling of COVID-19 and National Economic Recovery, and in its national medium-term development plan.
Building on the foundations of our Comprehensive Strategic Partnership, we are working across the Australian Government, using diplomacy, and our economic, defence and security partnerships, to ensure our development efforts have the greatest impact. We are leveraging the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) to contribute to our mutual economic recovery through trade and investment.
Our support to Indonesia is structured around the three pillars of our COVID-19 Development Response Plan – health security, stability and economic recovery. Across our work we are focusing on the most vulnerable, including women and people with disabilities.
Pillar 1 – health security
As close neighbours, Australia and Indonesia have a shared interest in managing COVID-19 transmission in our region.
Building on our long collaboration in the health sector and on disaster management, Australia responded quickly to Indonesia's request for support in mitigating the spread of the virus. We are working with Indonesia to build stronger systems to prevent, detect and respond to COVID-19 and other public health threats; to ensure quality health services continue to be delivered through the pandemic; and to build good health foundations that underpin health security. Recognising the importance of a safe, effective and accessible vaccine for a quicker recovery from the pandemic, Australia is supporting Indonesian and global efforts.
Pillar 2 – stability
With 80 million people living in poverty or vulnerable to falling back into poverty before the pandemic, the impact of COVID-19 on communities and livelihoods in Indonesia will be far reaching.
Our long-standing essential services partnerships with Indonesia are supporting communities and the most vulnerable to weather the shocks of COVID-19 and safeguard opportunities for recovery. Australia is Indonesia's largest bilateral partner in social protection and only bilateral partner in basic education. We are working with Indonesia to strengthen its response in social protection, food security and education.
As strategic partners, Australia and Indonesia share a commitment to increasing resilience and stability in our region and we have trusted partnerships in justice, security, and disaster management, founded on strong relationships between Australian and Indonesian Government agencies. We are working with Indonesia through these partnerships to address the changed strategic environment in our region and to continue to combat common security challenges during the pandemic.
Pillar 3 – economic recovery
Australia's prosperity is closely tied to that of our neighbours in the Indo-Pacific, including Indonesia. The pandemic is severely disrupting Indonesia's economy. Following a decade of steady GDP growth, the economy is experiencing a major contraction, with the International Monetary Fund predicting negative growth in 2020. The economic impact of COVID-19 is likely to have a long tail.
Australia's trusted advice, provided through our long-standing economic governance and World Bank partnerships, and government-to-government partnerships, has been critical in helping Indonesia to navigate the economic dimensions of the crisis.
Australia will continue to work with Indonesia to mitigate the economic slowdown and restore the foundations for an inclusive and resilient economy, and we will respond quickly to Indonesia's needs as it manages evolving impacts. We are focusing on supporting Indonesia to develop fiscal policy responses to COVID-19; to restore economic foundations, through business recovery and an improved business enabling environment, growth-enabling infrastructure, and human capital development for increased productivity; and the economic empowerment of women, people with disabilities and marginalised groups. We are also strengthening our economic partnership and creating opportunities for Indonesian and Australian business to support our shared economic recovery through the Indonesia-Australia Comprehensive Economic Partnership Agreement.
How we work together
Australia is working with Indonesia to achieve the best use of its resources for the most effective national COVID-19 response and recovery.
Using our trusted partnerships, we are continuing to provide evidence-based policy and technical advice to Indonesian ministries in real time as they make critical COVID-19 response decisions. We are working together to pilot innovative solutions to COVID-19 challenges and to build government systems for implementation. We are supporting Indonesia to generate evidence to inform policy and programming decisions, including through joint research and knowledge exchange, and by strengthening the enabling environment for research and development and innovation.
Australia is using the in-built flexibility of our programs to continually refocus our efforts.
Our work is harnessing the deep connections between Australian and Indonesian government agencies across our longstanding development, economic and security partnerships. We are also working with business, civil society, research partners and other international development agencies to leverage their expertise and finances for Indonesia's COVD-19 response.
Australia's development efforts are set out in Partnerships for Recovery: Australia's COVID-19 Development Response.