Indonesia’s idea for Australian aid: keep it coming

Indonesia is mounting a high-level push to maintain levels of Australian aid to the country.

Indonesian President Joko Widodo and Vice-President Ma'ruf Amin at Merdeka Palace in Jakarta in October. Picture: AFP

Indonesia is mounting a high-level push to maintain levels of Australian aid to the country, ­declaring the support is “fundamental” to the bilateral relationship and vital to its efforts to tackle poverty.

In an unprecedented move, ­Indonesia’s Vice-President and the Minister for National Development have made submissions to the Morrison government’s ­internal aid review — the only country to have done so.

The move follows five years of cuts that have slashed Australian support to the country by half — from $610m a year to $298m in 2019-20 — to help pay for the ­“Pacific step-up” policy.

Vice-President Ma’ruf Amin told the review that Australia had made a “vital contribution” to ­reducing poverty in his country, and provided “instrumental” support in helping to reduce stunting levels in Indonesian children from 37 per cent to 27 per cent in the past five years.

“While we are proud of all that Indonesia has achieved, many challenges to prosperity remain,” he said.

“Our strong partnership for development is a fundamental part of our important bilateral ­relationship.”

A second submission, from National Development Minister Suharso Monoarfa, said Indonesia had a “deep appreciation” for Australia’s aid support.

“The partnership supports ­important policy reforms that ­strengthen Indonesia’s stability and prosperity within the Indo-Pacific ­region and brings the relationship of our two countries closer,” Mr Suharso said.

He said the support gave Indonesia “the certainty we need to plan and budget for scale up and replication of successful ­approaches”.

“In this light, I urge Australia to maintain its strong development program in Indonesia,” Mr Suharso said.

The submissions follow last month’s visit to Australia by Indonesian President Joko Widodo, who declared in an address to both houses of parliament that “Australia is Indonesia’s closest friend”.

The Coalition has slashed aid to Southeast Asian countries by 42 per cent in what analysts have described as a diplomatic “step-down” that has undermined ­efforts to boost Australia’s influence in the region.

Australian Institute of International Affairs president Allan Gyngell, a former director-general of the Office of National ­Assessments, said the submissions were striking.

He said Australia and Indonesia had a valuable legacy of aid co-operation and Australia would be “very foolish to abandon it”.

“Indonesia is the linchpin of the Indo-Pacific,” Mr Gyngell said. “The South Pacific is ­important, but in terms of our ­capacity to influence long-term outcomes in the Indo-Pacific, ­Indonesia is far more significant, given its geographic location, its population, and the size of its economy.

“The relationship between Australia and Indonesia has not always been smooth sailing, and the fact that we now have these clear statements and a drive to ­engage more closely with Australia is an opportunity we should not ignore.”

The aid review, led by International Development Minister Alex Hawke, will examine the focus and administration of the aid program, but will not result in additional funding in the budget.

Indonesia is forecast to ­become the world’s fourth-biggest economy by 2050, but an estimated 25 million Indonesians live in absolute poverty, and 160 million have incomes below the average for Pacific islanders.

The Pacific is the only region to ­experience an Australian aid boost since 2014-15, enjoying a 17 per cent upswing.

Overall, the aid budget has shrunk by nearly $1bn a year, ­including $430m from education programs and $260m from health spending.