Indonesia is a lower-middle income country with a population of about 220 million. The country’s gross domestic product and employment levels have largely recovered from the 1998 Asian crisis, but a majority continues to live in poverty with nearly half the population living on less than €2 a day. Indonesia is working towards the Millennium Development Goals, especially those related to poverty alleviation, but the country also faces major environmental challenges and general weaknesses in governance.
EU Aid programmes 2007-2013
The overall objective for the EU-Indonesia Strategy Paper (2007-2013) [365 KB] is poverty reduction, and the European Commission will provide about €248 million through the multi-annual indicative programme for the first four years (2007-2010) focusing on:
- Basic education
- Trade and investment
- Law enforcement and judicial reform (especially good governance)
In addition, the Commission has provided support measures of €30 million to help the reconstruction effort following the earthquake in Java, to back up the initial humanitarian and rehabilitation assistance provided in 2006. Indonesia is also a key beneficiary of Commission programmes in support of the Association of South-East Asian Nations (ASEAN)regional integration and other EU regional and thematic programmes.
For the period 2002-2006, €216 million was allocated by the EU under the ALA Regulation (Regulation for EU cooperation with Asia and Latin America) to support two inter-related sectors:
- Good governance (including improved trade and economic management, democratisation and enhanced access to justice, and reforming public administration with a particular emphasis on better delivery of basic health and education services)
- The preservation and sustainable management of natural resources (forests, water, the natural environment in rural areas)
Ongoing bilateral projects include support for education, health, trade, and forestry. Projects include: improvement of the quality of basic education, working with responsible authorities, both at central and local levels (€20 million); improved access to community health services in Jambi, South Sumatra and Papua (€35 million); facilitating EU-Indonesia trade with the provision of technical expertise and twinning with EU technical laboratories to remove barriers to trade in sectors of mutual interest (€8.5 million); working towards more efficient and transparent customs management systems (€3.5 million); improved water resource management in selected provinces (€10 million); supporting Forest Law Enforcement, Governance and Trade (FLEGT initiative), in particular by the negotiation and implementation of an EU-Indonesia voluntary partnership agreement that will ensure the traceability of legal forestry export products (€15 million).
A further €3.58 million was allocated as small grants in support of human rights and democracy, and about €62 million to civil society organisations working in Indonesia through regional programmes, such as aid to uprooted people, education, trade and investment, and the environment.
Following the tsunami disaster of 2004, the Commission approved €200 million to help in the reconstruction of Aceh and North Sumatra. A multi-donor trust fund pooled financing from 14 donors for a total of €450 million (80% from the Commission and Member States) to use resources more efficiently and effectively. Support focuses on regenerating communities, restarting livelihoods and repairing large infrastructures such as roads, bridges, etc. Read more about the progress on the site of the Multi Donor Fund.
To ensure the long-term success of the reconstruction work and bring stability to the Aceh region, the Commission also allocated €25 million to support local elections, reforms of the police, the justice system and of local governance as its contribution towards the peace process in Aceh, which gained renewed momentum after the tsunami.
The European External Action Service is responsible for drawing up the EU-Indonesia cooperation strategy.
The Delegation of the European Union to Indonesia is responsible for activities in the country.
Post-tsunami reconstruction – 2 years on (20/12/2006).