AusAID-Indonesia Partnership

Despite the recent transition to middle-income status, Indonesia continues to face serious development constraints. Poverty remains a serious problem. Today, more than 120 million Indonesians (over half of the population) live on less than $2 a day. Furthermore, a high incidence of maternal mortality and malnutrition threatens prospects for socio-economic development. An Indonesian woman is 30 times more likely to die in childbirth than an Australian woman. Roughly 62 percent of the population is undernourished, with one in three children under the age of five suffering from stunting caused by malnutrition. The Australian Agency for International Development acknowledges that Indonesia requires further assistance to meet all of its Millennium Development Goals. Stepping up its aid programming and in close partnership with the Government of Indonesia, AusAID’s work in the country aims to achieve sustainable poverty alleviation, improve health and education outcomes, and strengthen democracy and good governance. To ensure that AusAID’s assistance delivers the development outcomes identified by the Government, the Australia Indonesia Country Partnership Strategy 2008-2013 is closely aligned with the National Medium Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional or RPJMN). Also, the Australia Country Strategy underpins the Australia Indonesia Partnership for Reconstruction and Development – a AU$1 billion ($1.04 billion) aid program at the center of Australia’s long-term commitment to Indonesia’s continued development. Funding levels Maintaining and growing its partnership with Indonesia is a top priority of the Australian government. For 2008-2013, Australia’s annual developmental assistance to Indonesia is approximately 400 million Australian dollars (please see table below). For fiscal year 2012-2013, Australia’s total development assistance to Indonesia is 578.4 million Australian dollars. Of this amount, AusAID manages 510.1 million Australian dollars for its bilateral program and 35.2 million Australian dollars for its regional and global initiatives in Indonesia. The remaining 33 million Australian dollars is administered by other Australian government departments for their development work in the middle-income country. AusAID is changing the way it develops and delivers assistance to Indonesia. Through close cooperation with the government, AusAID is working with Indonesian systems and selectively partnering with key public institutions to provide targeted assistance. Specifically, AusAID supports the Government’s development efforts though the provision of expert technical assistance and peer exchanges. Further, AusAID aims to harmonize assistance by coordinating and collaborating with development partners for other donor-led aid initiatives. Funding priorities (Fiscal year 2012-2013) AusAID’s strategic goals in Indonesia are promoting opportunities for all, sustainable economic development, saving lives, effective governance, and humanitarian and disaster response. With the overall aim of sustainable poverty reduction, AusAID’s comprehensive plan of support for Indonesia focuses on four key pillars: (1) sustainable growth and economic management, (2) investing in people, (3) democracy, justice, and good governance, and (4) safety and peace. For Fiscal year 2012-2013, funding allocations for AusAID’s strategic goals in Indonesia are as follows: Per Australia’s official country strategy for Indonesia, AusAID’s major initiatives include Australia’s Education Partnership with Indonesia (500 million Australian dollars) and the National Program for Community Empowerment or PNPM (215 million Australian dollars). AusAID works in areas with high levels of poverty and those lagging behind developmental outcomes at both national and sub-national levels. Priority areas of Australian aid include Papua, West Papua, East and West Nusa Tenggara, and Aceh. Outside of these 5 key provinces, AusAID also works in Java, West and Central Kalimantan, and South and Central Sulawesi. Devex analysis Given Indonesia’s growing importance to Australia’s strategic interests in the region, AusAID remains committed to doubling operations and financing for the middle-income country in the build-up towards a $1 billion Australian dollars annual aid program by 2016. Indonesia is currently receiving the largest share of Australian bilateral overseas development assistance – $521 million Australian dollars or 10 percent of the total. At present, AusAID’s work in the middle-income country prioritizes the areas of sustainable growth and economic management, education, health, democracy, justice, good governance, and security. More importantly, as Australian assistance to Indonesia grows, AusAID’s developmental work in education, infrastructure, and social protection are prioritized for expansion. Education remains a flagship program of the Australia-Indonesia development partnership given AusAID’s track record of successful education initiatives. Australia is also Indonesia’s largest bilateral grant donor. The government recently received a 555 million Australian-dollar AusAID grant to reduce the country’s maternal and child mortality rates. Contact: AusAID Indonesiac/o Australian Embassy, IndonesiaJakarta Selatan 12940, IndonesiaTel.: (62-21) 2550-5555Fax: (62-21) 2550-5467Email: public-affairs-jakt@dfat.gov.au Read more: - Indonesia’s top 10 donors: Responding to the promise of transformation