Overview of Australia’s aid program to Indonesia

How we are helping

2013/14 Actual:
$581.0 million

2014/15 Budget Estimate:
$605.3 million

Australia’s aid program to Indonesia is designed to support prosperity, stability and security in one of our closest neighbours. The program includes a range of investments designed to promote sustainable economic growth, good governance and stability. Indonesia is a large middle-income country with great potential; the aid program aims to help it fulfil it. But because our aid program is dwarfed by the scale of Indonesia’s economy, we do not aim to achieve impact by simply adding to Indonesia’s resources. Rather, we seek to add value to Indonesia’s efforts. We do this by selecting issues that are important to the Government of Indonesia and by providing high quality, flexible and responsive assistance. We focus on strengthening institutions and infrastructure to ensure Indonesia provides an environment receptive to trade and investment, while also developing its human capital, particularly women and girls. In March 2014 we agreed with the Indonesia Government to develop a new partnership strategy, which will come into effect during 2015. This strategy will reflect our priorities but will also work towards the goals Indonesia has set for itself in its Medium Term Development Plan.

Indonesia is one of Australia’s closest neighbours and faces increasingly complex development challenges. Like other developing countries, Indonesia has had recent success achieving economic growth but is still afflicted by poverty. More than 105 million Indonesians live on less than US$2 per day. Indonesia remains vulnerable to shocks, like a natural disaster or an economic downturn, that could have devastating effects. An Indonesian woman is 30 times more likely to die in childbirth than an Australian woman and one in three children under the age of five suffer from stunting, caused by malnutrition. About 120 million Indonesians do not have access to safe drinking water while about 110 million do not have adequate sanitation.

We have a strong track record of working together with Indonesia to deliver results that have contributed to economic growth and reduced poverty. We will continue to build on this partnership, identifying areas where Australia can support Indonesia’s own programs. In order to improve Indonesia’s ability to deliver better results, the aid program is moving away from direct service delivery and toward providing systems strengthening, innovation and strategic technical assistance.

The major areas of focus of the program are: helping Indonesia address acute infrastructure bottlenecks; improving economic and social governance to help Indonesia get its policy settings right and provide the foundation for higher growth and trade; supporting the Indonesian Government to provide better health and education services; and building capacity and people-to-people links through the Australia Awards. We work in the following sectors:

Economic and democratic governance

Australia has provided support to Indonesia’s law and justice sector for over 10 years, helping develop robust legal and justice systems, well-run elections and an active civil society. The aid program is also assisting the Indonesian government to strengthen its ability to formulate and implement economic and budgetary policy.

Australia is working to support Indonesia’s decentralization efforts by helping local governments improve the way they deliver basic services such as education, health, water and sanitation. The program also provides policy and strategic planning advice to the national government on its bureaucratic reform agenda.

Economic and democratic governance assistance in Indonesia

Education

Australia has a long history of working to improve Indonesia’s education sector, which is crucial to its future economic development. Our current program is providing thousands of new school places, while also working to improve school administration quality.

Education assistance in Indonesia

Health

Australia is working with Indonesia to address the health needs of women and children, tackle HIV, malaria and emerging infectious diseases, and to improve its health systems. We are also assisting it to plan for the long term by strengthening its public health policy and budgetary capacity.

Health assistance in Indonesia

Infrastructure

Australia is working with Indonesia to build, maintain and improve infrastructure services focusing on the road, transport and water and sanitation sectors. We provide grants, loans and technical advice to ensure that infrastructure reaches the people who need it, improving health results and promoting economic and social development.

Infrastructure assistance in Indonesia

Social Development

Our social development program works with the Indonesian Government to protect the poor from economic shocks, send poor children to school and help families access health services. We’re also promoting women’s leadership in business and politics, increasing the capacity of women to participate in building Indonesia’s economy.

Social development assistance in Indonesia

Rural Development

Nearly two-thirds of Indonesia’s poor live in rural areas and depend on agriculture to make a living. The Australian and Indonesian governments are working together to improve the incomes of farmers, through improving cultivation techniques, materials and access to business opportunities.

Rural development assistance in Indonesia

Disaster Risk Reduction

Australia is working with Indonesia to prepare for and prevent disasters, through the Australia-Indonesia Facility for Disaster Reduction. In partnership with Indonesia’s National Disaster Management Agency, we have produced world-class response tools and helped develop national policy.

Disaster risk management in Indonesia

Our results

During 2013-14, thanks to Australian aid in Indonesia:

  • More than 97,000 births were attended by skilled birth attendants
  • 1,734 classrooms were built or upgraded and more than 234,000 students were provided with financial or nutritional supports
  • 296 kilometers of roads were constructed, rehabilitated or maintained and more than 2.8 million poor women and men received access to social transfers such as cash or food
  • More than 494,000 people were provided with increased access to safe water and more than 69,000 with increased access to basic sanitation


A hand placing a ballot in a box
Raising people’s awareness of electoral processes and supporting their participation strengthens democracy in Indonesia (credit: DFAT).
A woman sitting at a sewing machine
Misobah sews in her tenun workshop in Tlingsing village, Indonesia. The 36-year-old was recently trained in marketing and microfinance through an Australian-funded NGO (credit: DFAT).
Two doctors performing surgery
The Australia-Bali Memorial Eye Centre provides sight restoration and blindness prevention programmes to combat preventable blindness which affects more than 50,000 people in Bali (credit: DFAT).