Overview of Australia’s aid program to Indonesia

2016-17 Total Australian ODA Estimated Outcome
$357. million

2017-18 Bilateral Budget Estimate
$296.0 million

2017-18 Total Australian ODA Estimate
$356.9 million

The Australian Government will provide an estimated $356.9 million in total ODA to Indonesia in 2017-18, including an estimated $296.0 million in bilateral funding managed by DFAT.

Indonesia is one of Australia's most important bilateral relationships. Australia and Indonesia have an extensive framework of cooperation spanning political, economic, security, development, education and people-to-people ties. Sustainable and inclusive economic growth in Indonesia benefits Australia and contributes to regional growth and stability.

Indonesia has experienced steady economic growth in recent years. It has reached middle income status and achieved substantial development progress. However, economic growth is now slowing and inequality is rising. At least 100 million people in Indonesia continue to live on $2 or less per day. Slow growth will make it more difficult for Indonesia to meet its development goals. Furthermore, low growth means the poor will find it harder to escape poverty.

Australia works in an economic partnership with Indonesia, supporting its efforts to leverage its own resources to generate growth and distribute those benefits to a larger number of its people. Australia provides policy and technical advice that will improve the quality of Indonesia's investments in infrastructure, economic governance, human development and social policy.

Indonesia’s National Medium-Term Development Plan 2015-19 (RPJMN) is part of the country’s National Long-Term Plan 2005-2025 and sets out the 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. It has a focus on eastern Indonesia to help address regional disparities in development, whilst maintaining growth momentum in other parts of the country.

Australia’s Aid Investment Plan 2015/16-2018/19 aligns with RPJMN priorities.

Our development cooperation program in Indonesia is structured around the following three objectives, as outlined in the 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. By supporting areas such as financial sector stability, revenue mobilization, improved government spending and tax collection we help contribute to better economic productivity. We are also working to increase access to agricultural markets for poor farmers in Eastern Indonesia, driving economic growth and improving food security in the region.

Bottlenecks in infrastructure constrain growth. We are helping drive infrastructure investment and growth through technical assistance and policy advice on regulatory provisions, 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 all-round.

Investments for effective economic institutions and infrastructure

Objective 2: Human development for a productive society

Indonesia needs to drive 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 considerable educational dividends for Indonesia's future leaders as well as valuable people-to-people linkages. 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.

Investments for human development for a productive society

Objective 3: An inclusive society through effective governance

We work with Indonesia to ensure that the poor and marginalized 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.

Investments for an inclusive society through effective governance

Our results

In 2016, Australia helped:

  • 88,736 farmers (40,017 women) increase their incomes
  • 935,672 people (459,951 women) increase access to basic sanitation, and 536,718 people (263,238 women) increase access to safe water
  • train 2,714 people (870 women) in trade policy and regulation
  • 6,349 women survivors of violence receive services such as counselling
  • 126,696 people (63,971 women) access social transfers, such as cash or in kind support.

Last Updated: 22 September 2017
Woman in hat on farm
Woman farm labourer in Blitar, East Java, Indonesia, supported through the Promoting Rural Incomes through Support for Markets in Agriculture program (PRISMA) tends to her chilli plants (credit: DFAT).
A woman sitting with baby in her arms
Umiyatun is breastfeeding her child in Ngawi, East Java, Indonesia. The Empowering Indonesian Women for Poverty Reduction Program (MAMPU) is currently supporting more than 210 women’s forums (Balai Sakinah Aisyiyah) as a crucial way to raise awareness among poor women of the importance of maternal and reproductive health (credit: DFAT).
Man smiling with thumbs up in front of water tap
A beneficiary of the Water and Sanitation Phase 2 program in Wonosobo, Central Java, Indonesia is happy to have access to clean water in his home for the first time (credit: DFAT).