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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.