Effective economic institutions and infrastructure in Indonesia

Overview

Our economic governance investments support Indonesia to boost inclusive growth and benefit from international trade and investment by improving its policy and regulatory settings. 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, and macroeconomic management. We are also helping Indonesia tackle the underlying disincentives to investment in infrastructure, providing input on regulations and project planning.

As nearly two thirds of Indonesia’s poor live in rural areas, our aid program continues to focus on the 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.

Related initiatives

Government Partnership Fund (GPF) Phase II

$51.8 million, 2011-2016

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.

Related documents*

Name of document	Year published	Type
Australia Indonesia Government Partnerships Fund Phase II 2010-15 design document	2010	Design

AIP Rural Economic Development Program

$112 million, 2010-2019

AIP-Rural is working to increase inclusive economic growth in five provinces in Eastern Indonesia by influencing how agricultural markets work for the poor. The program will help to reduce the number of Indonesians living in poverty, address constraints to rural income growth and improve food security and 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. The program aims to increase the incomes of one million rural farmers by 30 per cent by 2022.

Related documents*

Name of document	Year published	Type
Promoting Rural Incomes through Strengthening Markets in Agriculture (PRISMA) Summary Design	2013	Design summary
Tertiary Irrigation Technical Assistance (TIRTA) Design	2014	Design

Eastern Indonesia National Road Improvement Project (EINRIP)

$300 million, 2007-2016

EINRIP is supporting major national road and bridge improvements in Eastern Indonesia. EINRIP will support 20 major road projects across nine provinces, totaling 395 km of national roads and some 1,300m of fabricated steel bridge structures. Australia is providing a concessional loan of up to $300 million for construction works and supervision. This is supported by an additional $36 million for high quality road engineering designs and a program of technical and financial auditing to ensure roads are constructed to a high standard.

Related documents*

Name of document	Year published	Type
Anti-Corruption Action Plan for the Eastern Indonesia National Roads Improvement Project	2007	Plan
EINRIP Guidelines for Implementation of Environmental and Social Safeguards	2007	Guidelines
EINRIP design document	2007	Design
Eastern Indonesia National Roads Improvement Project (EINRIP) activity completion report	2009	Report
EINRIP Project Preparation Consultant Independent Completion Report	2009	Independent evaluation
EINRIP – Projection Preparation Consultant Independent Completion Report – Management Response	2009	Evaluation management response
Eastern Indonesia National Roads Improvement Project: Program fast facts	2013	Fact sheet
EINRIP project management manual	2011	Manual
EINRIP Independent Progress Review – Final Report	2012	Report

Provincial Road Improvement and Maintenance (PRIM)

$11.9 million, 2014-2015

PRIM is a pilot designed to help provincial governments improve the management and maintenance of their road networks. It also seeks to stimulate increased provincial government financing for road maintenance and facilitate public scrutiny of road maintenance services.

Related documents*

Name of document	Year published	Type
PRIM program design document	2014	Design

Indonesia Infrastructure Initiative (IndII)

$239.4 million, 2007-2017

IndII supports 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 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 Grants and the Provincial Road Improvement and Maintenance Programs. 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.

Related documents*

Name of document	Year published	Type
Indonesian Infrastructure Initiative Program Design Document	2007	Design
Indonesia Infrastructure Initiative (IndII) Monitoring and Evaluation Plan	2009	Plan
Communication and Visibility Strategy – Australia support for infrastructure development in Indonesia	2010	Strategy
Indonesia Infrastructure Initiative (IndII) Facility Extension Assessment Mission 18 to 28 October 2010 – Mission Report	2010	Report
Indonesia Infrastructure Initiative Phase II Implementation Document (July 2011 – June 2015) Workplan and Annexes	2012	Plan
Indonesia Infrastructure Initiative Program Fast Facts	2013	Fact sheet
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 1 Report	2014	Independent evaluation
Indonesia Infrastructure Initiative Program Impact Assessment Team Mission 1 Report: Management Response	2014	Evaluation management response

PAMSIMAS-2

$49.9 million, 2013-2018

The Water and Sanitation for Low Income Communities Project (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 own water supply and sanitation systems and improve hygiene behaviours. PAMSIMAS is delivered through the Indonesian Ministry of Public Works and is co-financed by Australia and the World Bank.

Related documents*

Name of document	Year published	Type
Design Summary and Implementation Document – Water and Sanitation Initiative – Indonesia	2009	Design
Third Water Supply and Sanitation for Low income Communities Project Mid-Term Review Aid Memoir	2010	Review
PAMSIMAS Anti-Corruption Action Plan	2012	Plan
Third Water and Sanitation for Low Income Communities Project and the Water Supply and Sanitation Policy Formulation And Action Planning Facility – Independent Review	2013	Independent evaluation
Third Water and Sanitation for Low Income Communities Project and the Water Supply and Sanitation Policy Formulation and Action Planning Facility – Independent Review: Management Response	2013	Evaluation management response

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 helping local governments 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 125 local governments to deliver 250,000 new water and 9,000 sewerage connections. This will benefit 1.2 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.

Related documents*

Name of document	Year published	Type
Indonesia Water and Sanitation Initiative – Phase 1 Concept Note	2009	Concept note
Indonesia Development Cooperation Report	2010	Report
Indonesia Urban Household Water Supply and Sanitation Program – Direct Funding Agreement	2010	Agreement
Indonesia Urban Household Water Supply and Sanitation Program – Agreement with USAID	2011	Agreement
Indonesia Water and Sanitation Initiative – Phase 2 Concept Note	2011	Concept note
Indonesia Water and Sanitation Initiative – Independent Evaluation and Final Report	2011	Independent evaluation
Indonesia Water and Sanitation Initiative – Independent Evaluation and Final Report: Management Response	2012	Evaluation management response

Australia Indonesia Partnership for Economic Governance (AIPEG)

$71.2 million, 2008-2015

AIPEG provides support to Government of Indonesia agencies responsible for economic management in order to promote the growth and stability of the Indonesian economy. Key areas of focus include: Market competitiveness, financial stability and development, revenue mobilisation, quality of spending.

Related documents*

Name of document	Year published	Type
Australia Indonesia Partnership for Economic Governance Facility Design document and annexes	2009	Design
Australia Indonesia Partnership for Economic Governance Independent Progress Report	2011	Independent evaluation
Independent Progress Report for the Australia Indonesia Partnership for Economic Governance – Management Response	2011	Evaluation management response

Multilateral Development Bank Infrastructure Assistance Program

$40.5 million, 2013-2019

The Multilateral Development Bank Infrastructure Assistance Program works with the World Bank and the Asian Development Bank. The program supports a range of activities including project preparation support and implementation, feasibility studies, engineering designs and environmental impact assessments. The program is also supporting the development of a Public Private Partnerships Centre in the Indonesian Ministry of Finance.

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.

* The Department of Foreign Affairs and Trade (DFAT) is committed to high standards of transparency and accountability in the management of the Australian aid program through publishing information on our website, including policies, plans, results, evaluations and research. Our practice is to publish documents after the partner government and any other partners directly involved in the delivery of the initiative have been consulted. Not all material published on this site is created by the Australian aid program and therefore not all documents reflect our views. In limited circumstances some information may be withheld for reasons including privacy and commercial sensitivity.