About AusAID
in Indonesia

What is AusAID

The Australian Government's overseas aid program is a Federal Government funded program that reduces poverty in developing countries.

The program is managed through the Australian Agency for International Development (AusAID) which reports directly to the Minister for Foreign Affairs. The overall aim of Australia's aid program to Indonesia is to serve Australia's national interest through assisting Indonesia reduce the incidence of poverty and achieve sustainable development.

AusAID's assistance in Indonesia is primarily distributed through projects managed by contractors selected competitively using the Commonwealth Procurement Guidelines.

It is a Government to Government (G to G) program, with the National Development and Planning Agency (BAPPENAS) as our main counterpart.

The program uses a variety of delivery approaches. We have bilateral projects, we also channel funds through United Nations agencies, International Financial Institutions (IFIs) and International Non-Government Organisations (INGOs). We also directly support local Civil Society Organisations (CSOs) and other community groups. All activities require the Indonesian Government's endorsement.

AusAID's History in Indonesia

Australia-Indonesia have been development partners for many years. In some areas, like education, the Development Cooperation Program association stretches back to the early 1950s. Commencing with scholarships, funded through the Colombo Plan. The program has, over the years, continued to grow, shifting and adapting to the changing needs and priorities of Indonesia.

The tsunami which struck north-western Sumatra on 26 December 2004 illustrated dramatically and tragically Indonesia's vulnerability to natural disasters. Australia, a major donor of humanitarian assistance to Indonesia since the economic crisis of the late 1990s, responded immediately to this disaster including by agreeing with the government of Indonesia to form a A$1 billion, five-year, Australia Indonesia Partnership for Reconstruction and Development (AIPRD) to support Indonesia's reconstruction and development efforts, both in and beyond tsunami-affected areas.

From 1 May 2006, the Australian bilateral aid program in Indonesia will be promoted under the brand Australia Indonesia Partnership (Kemitraan Australia Indonesia): a whole of government aid program encompassing expenditure of around A$2 billion over five years. This includes the A$1 billion Australia Indonesia Partnership for Reconstruction and Development (AIPRD), the single largest aid package in Australia’s history.

Australia's aid to Indonesia is delivered by a range of Australian Government departments in partnership with the Indonesian Government. This needs to be reflected in our brand. The Australia Indonesia Partnership (AIP) brand reflects the very strong emphasis on partnership, in other words, the strong senior-level engagement in the program by both governments. The brand has been approved by both governments.

Please see information on AIP branding for further details.

Australia's Aid Program in Indonesia

Estimated Official Development Assistance (ODA) to Indonesia: 2008-09

Estimated Official Development Assistance (ODA) to Indonesia: 2007-08

See Australia's Overseas Aid Program Budget 2007-08 [external site].

Estimated Official Development Assistance (ODA) to Indonesia: 2006-07

The development context

Poverty is a serious challenge in Indonesia - seven per cent of the population of 242 million live below the international poverty line of US$1 a day. The poor lack access to quality health and education services and unemployment is a major concern, with the open unemployment rate at over nine per cent. Investment in human capital and infrastructure is inadequate to support the growth levels Indonesia needs to reduce poverty and achieve sustained increases in per capita income. Conflict still affects several areas of the country and, despite effective action by the Indonesian police, the threat of terrorism remains.

The destruction caused by the December 2004 Indian Ocean disaster was greatest in Indonesia, with over 150,000 dead or still missing and 500,000 internally displaced persons. Australia responded quickly with a A$33 million emergency relief package. Australia also played a leadership role in the international community by helping the Government of Indonesia, UN and NGOs coordinate the ongoing response.

Source: GNI per capita: World Development Indicators, World Bank, 2003; other indicators: Human Development Report, UNDP, 2004.

The Australia-Indonesia Partnership (AIP)

In 2006-07 Indonesia will receive the largest ODA contribution of all countries receiving aid from Australia. The goal of Australia's aid program with Indonesia is to assist that country to reduce poverty and achieve sustainable economic and social development. The aid program has four key components:

Improving economic management and growth through activities which support sound economic management and a strong productive private sector. Examples of programs include:

• the five year, A$50 million Government Partnerships Fund that is helping strengthen the capacity of Indonesian Government institutions to implement effective policies, exchange skills and knowledge, and build institutional linkages with counterpart institutions in Australia, such as Treasury, Tax Office, and ANAO,
• the five-year A$30 million Australia - Nusa Tenggara Assistance for Regional Autonomy (ANTARA) Program which aims to raise local government capacity, raise incomes and improve service delivery on two of Eastern Indonesia's poorest provinces through taking an integrated area-based approach,
• the four-year A$328 million Eastern Indonesia Road Improvement Program to support regional economic and social development, particularly in Eastern Indonesia, by improving the condition of 2,000km of national roads and replacing approximately 4,500m of essential bridging, and
• the A$26 million Technical Assistance Management Facility (III) that provides specialist technical experts to assist with policy development and implementation in key central economic agencies of the Indonesian government.

Supporting the transition to democracy by helping Indonesia build strong democratic institutions and supporting broad participation in the democratic process. This component includes assistance for legal and judicial reform, institutions of human rights and public accountability, electoral and parliamentary processes, and civil society. Examples of programs include:

• the A$10 million program to restore local government services in Aceh including restoration of key government buildings and offices, and assistance in planning, prioritising and budgeting for reconstruction and development,
• the A$19 million Australian Community Development and Civil Society Strengthening Scheme which works with communities to strengthen their engagement with government and service provider agencies. This program assisted Balinese communities to recover from the impact of the 2002 Bali bombing,
• the A$22 million Indonesia Australia Legal Development Facility (IALDF) which works with Indonesian Government agencies, legal and judicial institutions and legal and human rights-focused civil society organisations to support Indonesia's evolving legal and human rights reform agenda, and
• A$6.5 million over five years to fund a national coalition of non-government organisations to undertake monitoring of provincial, district and mayoral elections across Indonesia.

Enhancing human security and stability through assistance in building competent law enforcement and emergency agencies, and strengthening Indonesia's capacity to respond effectively to communicable diseases such as avian influenza and HIV/AIDS. This component also covers conflict and disaster prevention activities, and humanitarian assistance for vulnerable groups. Examples of programs include:

• a A$10 million counter terrorism initiative to help Indonesia build its counter terrorism capacity,
• A$10 million to further develop Indonesia's own systems for managing and responding to the impact of natural disasters, including through support to build the disaster response capacities of local organisations and a closer partnership between Indonesia's and Australia's disaster management and coordination authorities,
• the A$151 million Aceh Rehabilitation Program which focuses primarily on health, education, governance and restoration of vital public and community infrastructure, and
• a multi-year A$34 million program for HIV/AIDS prevention and care in areas of highest prevalence. This program includes assistance for Indonesian policy and strategy development as well as service delivery.

Increasing the accessibility and quality of basic social services, particularly in Eastern Indonesia. This program includes activities which range from assistance for policy development at the national level to support for planning and implementation at the district level. It includes support for community-based as well as government approaches. Examples of programs include:

• the multi-year A$28 million women's health and family welfare project implemented in the provinces of East and West Nusa Tenggara, with a particular focus on maternal and neonatal health,
• an A$11 million program to provide safe, adequate, cost-effective, sustainable and easily accessible water supply and sanitation services to low income communities in several provinces. This program is implemented jointly with the World Bank, and
• a A$300 million basic education program which will construct and rehabilitate school facilities in poor under- serviced districts and improve education quality through teacher training and improved education management.

A range of Australian government departments and agencies are working together with the Government of Indonesia to achieve these objectives. These include AusAID, DFAT, PMC, Treasury, DoD, AFP, DOTARS, DIMEA, AQIS and DEST.

Estimated AusAID programs in Indonesia by sector 2006-07

Australia-Indonesia Partnership for Reconstruction and Development (AIPRD)

As part of the Australia-Indonesia Partnership, the AIPRD engages both governments at the highest political levels in support of Indonesia's reconstruction and development efforts, both within and beyond tsunami affected areas. The AIPRD is governed by a Joint Commission, overseen by the Prime Minister of Australia and the President of Indonesia, including the Minister for Foreign Affairs and Treasurer and their Indonesian counterparts.

The AIPRD consists of A$500 million in grant funding and A$500 million in highly concessional loans. All AIPRD funds have now been allocated and implementation of programs and activities is well underway. The joint commission has considered and endorsed the following allocations:

• A$328 million for the improvement of national roads
• A$300 million for basic education including building 2000 schools;
• A$181 million for the rehabilitation and reconstruction of Aceh and Nias;
• A$78 million for postgraduate scholarships;
• A$50 million for government partnerships in economic and public sector reform;
• A$38 million for rural and agribusiness development
• A$10 million for disaster preparedness and response
• A$5 million to respond to disasters outside of Aceh (eg. Alor)

Key Initiatives in 2006-07

• commence building and upgrading up to 2000 junior secondary schools, and to support teacher development in poor, under-serviced districts, particularly in Eastern Indonesia.
• commence repairing more than 2000 kilometres of national roads and replace 4,500 metres of steel truss bridges.
• provide some 253 Australian Partnership Scholarships, in addition to some 300 Australian Development Scholarships thereby offering significant opportunities for tertiary study in Australia.
• strengthening government partnerships in economic and public sector administration (including treasury, tax etc).
• help improve the response to a potential outbreak of Avian Influenza.
• continue reconstruction efforts in Aceh, including for building 19 schools and 180 village halls and mapping over 24,000 parcels of land.
• support democratic institutions and participation in the democratic process (including support for the elections in Aceh).
• service delivery in basic education (in both secular and mainstream Islamic schools) and health (including funding for maternal and child health activities).
• private sector development in Eastern Indonesia to improve production and marketing practices.
• development of alternative livelihoods for communities currently engaged in illegal fishing.
• maintenance of security and stability with particular focus on combating pandemics (including HIV/AIDS), transnational crime and terrorism
• enhanced emergency response capacity and community awareness on disaster including working with key Islamic and civil society organisations such as the Indonesian Red Cross.

See also:

Australia Indonesia Partnership Country Strategy 2008-13

Strategic Framework for Australia's Aid Program [external site]

Indonesia: Analytical Report for the White Paper on Australia's Aid Program [external site PDF file - 321 KB]

Australia-Indonesia Partnership for Reconstruction and Development [external site]

Indonesia Australia Development Cooperation 2004-05: Overview [PDF file - 155 KB]

Country Information Indonesia [external site]

Australia Indonesia Partnership (AIP) Branding

Information on branding Australia's aid program to Indonesia

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