Effective economic institutions and infrastructure in Indonesia

Overview

Our economic governance investments support Indonesia to boost inclusive growth and to achieve mutual benefit from international trade and investment. We provide technical assistance, including through government-to-government partnerships, which focus on Indonesia’s priority economic reforms in areas such as financial sector supervision, budgeting, trade and competition, tax policy and administration and macroeconomic management. We are also working with Indonesia to tackle the underlying disincentives to investment in infrastructure, providing input on regulations and project planning, along with targeted technical assistance to make sure that Indonesia gets good results from its own spend on infrastructure development.

As nearly two thirds of Indonesia’s poor live in rural areas, our aid program continues to focus on development of the agricultural sector. We are encouraging inclusive economic growth by attempting to influence how agricultural markets work for the poor, improving food security, raising agricultural productivity, and helping to boost farmer’s incomes and employment by addressing constraints such as access to loans.

Related initiatives

Indonesia Infrastructure Initiative (IndII)

$239.4 million, 2007-2017

IndII works with the Indonesian government to address constraints to infrastructure investment, such as delays and high costs to freight due to congestion on roads and railways, energy shortages, and uncompetitive technologies, and to enable efficient and effective infrastructure service delivery. IndII focuses on water and sanitation, roads and transport, and cross-cutting policy and regulations.

IndII oversees the Water and Sanitation Grant Program and the Provincial Road Improvement and Maintenance Program. IndII also provides technical assistance in response to requests from Indonesian government agencies. IndII has provided experts to undertake feasibility studies, cost-benefit analyses, planning documents, engineering and architectural designs, project evaluations, and training on important infrastructure projects.

Related documents*

Name of document Year published Type
Indonesian Infrastructure Initiative Program Design Document 2007 Design
Indonesia Infrastructure Initiative (IndII) Monitoring and Evaluation Plan 2009 Plan
Communication and Visibility Strategy – Australia support for infrastructure development in Indonesia 2010 Strategy
Indonesia Infrastructure Initiative (IndII) Facility Extension Assessment Mission 18 to 28 October 2010 – Mission Report 2010 Report
Indonesia Infrastructure Initiative Phase II Implementation Document (July 2011 – June 2015) Workplan and Annexes 2012 Plan
Indonesia Infrastructure Initiative Program Fast Facts 2013 Fact sheet
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 1 Report 2014 Independent evaluation
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 1 Report: Management Response 2014 Evaluation management response
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 2 Report and management response 2014 Evaluation and management response
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 3 Report 2017 Independent evaluation
Gender Equality in the Indonesia Infrastructure Initiative Program 2017 Report

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Water and Sanitation Hibah Phase 2

$120.4 million, 2009-2018

The Water and Sanitation Grants Program aims to increase water and sewerage connections across Indonesia by working with local governments to boost investment in water and sanitation infrastructure. The program uses an innovative approach where local governments are reimbursed up to 45 per cent of the connection costs following verification that each new connection has functioned for at least three months. The program is working with 115 local governments to deliver 330,000 new water connections (38,000 of which are USAID funded) and 9,000 sewerage connections. This will benefit 1.5 million people from predominantly low-income families. Women, people with disabilities and the elderly are significant beneficiaries, with many experiencing improved health and productivity benefits.

Related documents*

Name of document Year published Type
Indonesia Water and Sanitation Initiative – Phase 1 Concept Note 2009 Concept note
Indonesia Development Cooperation Report 2010 Report
Indonesia Urban Household Water Supply and Sanitation Program – Direct Funding Agreement 2010 Agreement
Indonesia Urban Household Water Supply and Sanitation Program – Agreement with USAID 2011 Agreement
Indonesia Water and Sanitation Initiative – Phase 2 Concept Note 2011 Concept note
Indonesia Water and Sanitation Initiative – Independent Evaluation and Final Report 2011 Independent evaluation
Indonesia Water and Sanitation Initiative – Independent Evaluation and Final Report: Management Response 2012 Evaluation management response

Water and Sanitation for Low Income Communities Project (PAMSIMAS) 2

$49.5 million, 2013-2018

PAMSIMAS is the Indonesian Government's national program to deliver water, sanitation and improved hygiene to rural and peri-urban areas. PAMSIMAS works with communities to plan, finance, manage and maintain their water supply and sanitation systems and improve hygiene behaviour. As at August 2016, the program had enabled about 9 million people to have access to improved water facilities (such as piped water into houses and public taps), and enabled over 8 million people to access improved sanitation facilities (such as flush toilets or improved pit latrines). PAMSIMAS is delivered through the Indonesian Ministry of Public Works and Housing, and is co-financed by Australia and the World Bank.

Related documents*

Name of document Year published Type
Design Summary and Implementation Document – Water and Sanitation Initiative – Indonesia 2009 Design
Third Water Supply and Sanitation for Low income Communities Project Mid-Term Review Aid Memoir 2010 Review
PAMSIMAS Anti-Corruption Action Plan 2012 Plan
Third Water and Sanitation for Low Income Communities Project and the Water Supply and Sanitation Policy Formulation And Action Planning Facility – Independent Review 2013 Independent evaluation
Third Water and Sanitation for Low Income Communities Project and the Water Supply and Sanitation Policy Formulation and Action Planning Facility – Independent Review: Management Response 2013 Evaluation management response

Related links

Water and Sanitation for Low Income Communities Project (PAMSIMAS) 3

$10 million, 2016 – 2021

PAMSIMAS 3 is the newest Phase of the PAMSIMAS program and will support the achievement of universal access to water and sanitation in rural areas, covering a total of 27,000 villages in 360 districts and 33 provinces.

The Australia Indonesia Infrastructure Grant for Municipal Sanitation (sAIIG)

$44 million, 2012-2018

The Australia Indonesia Infrastructure Grant for Municipal Sanitation is provided to approximately 40 selected local governments to implement sanitation infrastructure. sAIIG has been designed to stimulate local government investment in sanitation infrastructure and to provide incentives for governance reforms that will improve the delivery of sanitation services.

Provincial Road Improvement and Maintenance (PRIM)

$25.2 million, 2014-2017

The Provincial Road Improvement and Maintenance Pilot Program is an output-based grant that incentivizes local governments to implement road maintenance and rehabilitation works. It aims to improve the way local governments plan, budget and implement their investments in road maintenance on a sustainable basis. PRIM is working to broaden the use of the hibah (grant) mechanism that was successfully piloted in the water and sanitation sector.

Related documents*

Name of document Year published Type
PRIM program design document 2014 Design

Multilateral Development Bank Infrastructure Assistance Program

$45.5 million, 2013-2019

The Multilateral Development Bank Infrastructure Assistance Program works with the World Bank and the Asian Development Bank to support a range of activities, including project preparation support and implementation, feasibility studies, engineering designs and environmental impact assessments. The program also supports the development of a Public Private Partnerships Centre in the Indonesian Ministry of Finance.

Related links

Government Partnership Fund (GPF) Phase II

$66.7 million, 2011-2017

The Government Partnerships Fund is a whole-of-government program that facilitates and strengthens government-to-government partnerships and policy dialogue between Australia and Indonesia in the pursuit of improved economic and public sector governance. GPF provides Indonesian agencies with access to the institutional knowledge of Australian Government agencies experienced in economic and public sector reform. There are currently thirteen partnerships in place between Australian and Indonesian government agencies.

Related documents*

Name of document Year published Type
Australia Indonesia Government Partnerships Fund Phase II 2010-15 design document 2010 Design
Mid-Term Review of the Indonesia Government Partnership Fund Phase Two 2013 Review

Australia Indonesia Partnership for Economic Governance (AIPEG)

$111.4 million, 2009-2017

AIPEG provides support to Government of Indonesia agencies responsible for economic management in order to achieve strong, sustainable and inclusive economic growth through increased competitiveness. AIPEG provides technical assistance and capacity building to Indonesian Government agencies in order to strengthen economic institutions, manage public finances, and promote effective markets to underpin growth and development.

Related documents*

Name of document Year published Type
Australia Indonesia Partnership for Economic Governance Facility Design document and annexes 2009 Design
Australia Indonesia Partnership for Economic Governance Independent Progress Report 2011 Independent evaluation
Independent Progress Report for the Australia Indonesia Partnership for Economic Governance – Management Response 2011 Evaluation management response

Related links

Australia Indonesia Partnership for Rural Economic Development Program (AIP-Rural)

$112 million, 2013-2018

AIP-Rural aims to increase inclusive economic growth in five provinces in eastern Indonesia by influencing how agricultural markets work for the poor. The program is designed to help reduce the number of Indonesians living in poverty, address constraints to rural income growth and improve agricultural productivity. AIP-Rural is facilitating private sector-led investment in better agricultural practices, while also supporting the Australian Government's aid for trade and women's economic empowerment priorities. Private sector partners have worked on more than 50 activities with the program since 2013. The program aims to increase the incomes of 300,000 smallholder farm households by 30 per cent by 2018.

Related documents*

Name of document Year published Type
Promoting Rural Incomes through Strengthening Markets in Agriculture (PRISMA) Summary Design 2013 Design summary
Tertiary Irrigation Technical Assistance (TIRTA) Design 2014 Design
Applied Research and Innovation Systems in Agriculture Design Document 2014 Design
Strengthening Agricultural Finance in Rural Areas Design Document 2015 Design
Mid Term Review and Management Response 2016 Independent evaluation and management response

Related links

Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector

$50 million (with an additional $10 million in non-Official Development Assistance funding from the Department of Agriculture), 2013-2024

The Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector aims to enhance and strengthen long-term economic relations between Indonesia and Australia. It is focused on developing economic opportunities along the cattle and beef sector supply chain in order to support Indonesia's food security and to promote closer ties in the beef and cattle sector between both countries. Membership of the Partnership comprises senior government officials and industry representatives from Indonesia and Australia. The Partnership provides advice and recommendations on areas of priority development in the sector. The partnership is delivering several successful programs, exchanging skills in beef processing, cattle production and husbandry, and agricultural policy and last year launched the Indonesia Australia Commercial Cattle Breeding Program.

Related documents*

Name of document Year published Type
Indonesia-Australia Partnership on Food Security - Communique 2014 Communique
Indonesia Cattle Breeding Program Investment Design 2015 Design

Indonesia-Australia Partnership for Environmental Governance

$10 million, 2017-2019

During the High-Level Launch of the Nationally Determined Contributions (NDC) Partnership at COP22 in Marrakesh in November 2016, Foreign Minister Bishop announced that Australia will provide $10 million to help Indonesia achieve its goal for a lower carbon and more efficient agricultural and forestry sectors, which are its largest sources of emissions and economic activity.

Related links


* The Department of Foreign Affairs and Trade (DFAT) is committed to high standards of transparency and accountability in the management of the Australian aid program through publishing information on our website, including policies, plans, results, evaluations and research. Our practice is to publish documents after the partner government and any other partners directly involved in the delivery of the initiative have been consulted. Not all material published on this site is created by the Australian aid program and therefore not all documents reflect our views. In limited circumstances some information may be withheld for reasons including privacy and commercial sensitivity.



 

 



Last Updated: 28 March 2017