Overview of Australia’s aid program to Indonesia

2017-18 Total Australian ODA Estimated Outcome
$359 million

2018-19 Bilateral Budget Estimate
$266.4 million

2018-19 Total Australian ODA Estimate
$316.2 million

The Australian Government will provide an estimated $316.2 million in total ODA to Indonesia in 2018-19, including an estimated $266.4 million in bilateral funding managed by DFAT.

How we work together

We work in an economic partnership, supporting Indonesia's efforts to tackle inequality and maintain social stability, promote tolerance and pluralism, and counter violent extremism. We provide policy and technical advice that will improve the quality of Indonesia's investments in infrastructure, economic governance, human development and social policy, including in the area of law and justice.

Why our work is important

While Indonesia has experienced steady economic growth in recent years and achieved substantial development progress, development across the country is uneven — poverty rates are seven times higher in Papua than in Java — and inequality remains a pressing challenge for the government. More than 72 million people in Indonesia continue to live under the World Bank's $3.20 per day poverty line. This context makes our work in Indonesia all the more important, because sustainable and inclusive economic growth in Indonesia benefits Australia and contributes to regional growth and stability.

Policy framework

Australia's Aid Investment Plan 2015/16-2018/19 aligns with the priorities of Indonesia's National Medium-Term Development Plan 2015-19 (RPJMN). This plan sits under the country's National Long-Term Plan 2005-2025 (RPJPN) and sets out the Indonesian 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. The 2015-19 plan has a focus on eastern Indonesia to help address regional disparities in development, while maintaining growth momentum in other parts of the country.

Our development partnership with Indonesia is structured around the three objectives of our Aid Investment Plan.

Our results

In 2017-18, Australia helped:

  • Indonesia attract approximately AUD550 million in new infrastructure investment through asset securitisation
  • 295,000 Indonesians access improved water and basic sanitation
  • Indonesians access over 54,000 identity documents – a critical first step in accessing government services
  • 1.2 million Indonesian families access a new food assistance program
  • improve the allocation of Indonesia's AUD9.3 billion Village Fund, benefiting Indonesia's poorest regions
  • enable more than 30,000 women to contribute to policy and decision making in their communities, and
  • an additional 104,534 farm households to increase their incomes, by an average of 191 per cent.

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. We contribute to improved economic productivity by supporting financial sector stability, revenue mobilisation, and improved government spending and tax collection.

We work to increase access to agricultural markets for poor farmers in Eastern Indonesia, supporting economic growth and improving food security in the region.

We are helping drive infrastructure investment and growth through technical assistance and policy advice on regulations, 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.

More about Objective 1: Effective economic institutions and infrastructure

Objective 2: Human development for a productive society

Indonesia needs to strengthen 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 educational dividends for Indonesia's future leaders as well as valuable people-to-people links. 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.

More about Objective 2: Human development for a productive society

Objective 3: An inclusive society through effective governance

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

More about Objective 3: An inclusive society through effective governance


Last Updated: 25 February 2019
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).