Indonesia

The world’s third largest democracy has set out to become the world’s tenth largest economy by 2025. Norwegian development cooperation includes help to save Indonesia’s rainforests.

Facts about Indonesia

Population
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Millions
Life expectancy
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Years
GNI pr capita
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USD
Percentage poor people (below 1.25$)
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%
HDI
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Ranking
Source:

Bilateral assistance million kroner

Bilateral assistance million kroner

Bilateral assistance million kroner

Indonesia is the world’s fourth most populous country and the largest Muslim nation. Unity and pluralism are enshrined in the constitution. Despite some challenges, the country is a functioning democracy that enjoys progress, with an active civil society and a free press. The country demonstrates that economic growth, democracy and Islam can be compatible. Joko “Jokowi” Widodo won the elections in July 2014 and is president of Indonesia.

Indonesia is the largest economy in South-East Asia and the 16th largest in the world, and seeks to enter the top ten by 2025. Falling prices for raw materials represent a challenge to the country’s export revenues. Growth prognoses have been adjusted downwards, but are assumed to reach five per cent in 2015.

The president’s main ambition is to accelerate the economy. Corruption presents a significant obstacle. Tax incomes are low, but the president succeeded in cutting the subsidies for fuel in the budget for 2015. This freed up nearly ten per cent of the budget, which will be devoted to the government’s main priorities: upgrading of infrastructure, maritime programmes, energy, food security, defence and administrative reforms that will benefit Indonesian industry.

Indonesia has an enormous need for electric power. New development of approximately 6000 MW per year has been planned for the next five years. Much of this power will come from coal, but capacity for renewable energy will also be increased.

Poverty rates are falling, although half of all Indonesians are living on less than two US dollars per day.

Food security, health and education also represent major social challenges. Indonesia is set to reach Millennium Development Goal No. 2 on universal primary education, and Millennium Goal No. 3 on gender equality, including gender equality in primary and lower secondary education.

Indonesia is unlikely to reach Millennium Goal No. 5 on maternal health, and figures for maternal mortality remain relatively high. Nor is Millennium Goal No. 6 on combatting HIV/AIDS, malaria and other diseases likely to be reached. HIV is estimated to have a prevalence of nearly one per cent.

Since the transition to democracy in 1998, major progress has been made in terms of human rights. However, the government’s protection of the rights of religious and sexual minorities has been questioned. Especially in Aceh, women are affected by discriminating regulations based on a conservative interpretation of Sharia law.

Indonesia is home to the world’s third largest rainforest – after the Amazon and the Congo Basin. At the same time, Indonesia has the world’s third largest emissions of greenhouse gases – after the USA and China. Most of these are a result of deforestation and forest degradation.

Reducing deforestation in Indonesia is key to achieving the two-degree goal and reducing the detrimental effects of climate change. Norway has a climate and forest partnership with Indonesia with a funding of up to NOK 6 billion.

Development cooperation with Indonesia

 

Climate and forest

Indonesia is responsible for the world’s third largest greenhouse gas emissions, much of which is caused by deforestation. In 2009, however, the country set out to reduce the emissions by 26 per cent by 2020 through domestic efforts and by 41 per cent with international support.

Through its Climate and Forest Initiative, Norway wishes to help preserve Indonesia’s verdant rainforest.

In 2007, the Norwegian government decided to grant NOK 3 million annually over the aid budget to international efforts to reduce emissions from deforestation and forest degradation (REDD+)

Norway has committed to disburse up to NOK 6 billion in the period up to 2020, on the condition that Indonesia reduce its emissions of greenhouse gases.

Under the partnership with Norway, Indonesia has strengthened its enforcement of laws pertaining to illegal logging. Local communities, indigenous peoples and the environmental movement have increasingly been included and consulted in the design of relevant policies. The rights of indigenous peoples are enjoying greater recognition.

Before the Norwegian funds are released to the partnership, requirements placed on Indonesia include the establishment of a verifiable and internationally accepted method for measuring deforestation. Progress has been made in this area, but some work still remains to be done.

Major challenges

Indonesian authorities are facing major challenges when it comes to halting deforestation. For example, the country needs to crack down on corruption and forest crime, stop human rights abuses in the rainforest and establish effective mechanisms for forest preservation.

The new government has reiterated the goals of the previous one of achieving a 41 per cent reduction in greenhouse gas emissions before 2020 with international assistance. During Prime Minister Solberg’s state visit in April 2015, President Jokowi affirmed that Indonesia wishes to continue the REDD+ partnership with Norway, and that he remains committed to the Declaration of Intent with Norway, signed in 2010.

The deeper causes of the deforestation include the high prices on commodities such as palm oil and paper, poor governance and the fact that areas of current Indonesian legislation in practice encourage deforestation.

Moreover, one lesson learned from the Norwegian-Indonesian REDD+ partnership is that time and strong political leadership will be needed to set the country’s political economy on a more sustainable course.

According to an independent evaluation, the Norwegian contributions through the Climate and Forest Initiative have helped put preservation of the rainforest onto the political agenda in Indonesia.

Key contributions from Norway

According to Indonesian authorities, the Norwegian contributions have been crucial in amassing support for major reforms of the economy and new approaches to resource management. The country is now establishing the institutions and mechanisms that are necessary to reduce deforestation.

Indonesia has achieved significant progress during the first phase of the partnership. In 2015, the total ban on the granting of new licences for deforestation of natural forests was renewed for another two years. The area comprised by the ban was expanded by nearly one million hectares in 2015. Licences that would have been granted according to previous practice are now being denied.

Civil society in Indonesia reports that transparency has improved. While the authorities previously tended to ignore civil society, now indigenous peoples, environmental organizations and human rights organizations are included in policy formation.

For the first time, the country’s constitutional court has granted indigenous peoples the right to land areas. Moreover, the first official map of all forests and licences issued by different ministries and municipalities in the various areas is now being prepared. Thereby, the authorities can better plan for preservation of areas and decide where plantations should be established.

Enterprises that engage in illegal deforestation are now being investigated and punished more systematically. Systems for alerting to and fighting the highly destructive peat-bog fires have also been significantly upgraded.

A number of positive initiatives have also come from the private sector. Leading enterprises in the palm oil and forest products industries have committed to adhering to principles of sustainability and have invited environmental organizations to monitor their implementation.

In 2015, the World Resources Institute’s global forest monitoring programme Global Forest Watch published positive figures for Indonesia, showing a reduction in the deforestation rate of nearly 50 per cent for 2012–2013. At the moment, new figures are awaited to ascertain whether this trend has continued through 2014 and 2015.

Other examples of projects that have been granted support through the Norwegian Climate and Forest Initiative:

  • Norway has a multi-year agreement with the Kemitraan organization to help promote better management of the forest sector.

  • Norway has an agreement with the Global Green Growth Institute (GGGI) to contribute to Indonesia’s economic development plans and to provide technical assistance to the Indonesian REDD+ process.

  • Norway has supported a programme under the auspices of the UN organization UNODCto fight forest crime. The programme has reinforced The Special Responsive Police Forest Task Force (SPORC), improved capacity in the legal system and provided support to civil society.

  • Support to the World Bank’s work on provision of quality assurance for the funding mechanism REDD+.

  • Norway supports training of journalists with regard to climate and REDD+ issues. This support was granted to the Dr Soetomo Press Institute, which was responsible for organization of a number of courses and lecture series on this topic.

Energy

With Norwegian funding, the HIVOS organization constructed 1076 biogas installations on market conditions in households in nine provinces in 2014. Altogether 43 per cent of the farmers who received biogas installations also received training in their operation and maintenance. The biogas installations have improved waste management, created job opportunities and improved the living conditions of the target group.

A user survey showed a satisfaction rate of 91 per cent. Moreover, this has created a basis for the use of biogas in Indonesian homes, with more than 14 400 users included in this project alone. Thus, the project contributes, albeit to a limited extent, to reducing greenhouse gas emissions. The department of renewable energy in the Indonesian Ministry of Energy has included the HIVOS project as one of seven national programmes for renewable energy, and the project has also helped spur the government to increase its commitment to biogas.

Electricity for Sumba

Norway is also supporting the work of the Asian Development Bank and the HIVOS organization for electrification of the island of Sumba. As of mid-2014, the electrification rate had increased to 48 per cent from 24 per cent at the start of the project. Ten per cent of this electricity comes from renewable energy sources.

A number of demonstration projects have been established in which local communities are involved, for example for construction of solar-powered irrigation and biogas installations. This results in increased harvests and incomes. HIVOS’ efforts have united relevant actors from local communities, the authorities, the national electricity corporation and private actors to ensure that they all pull in the same direction to achieve the goal of electricity supply to everybody on Sumba, on the basis of renewable energy.

Democracy, gender equality and human rights

Norway gives high priority to human rights in its cooperation with Indonesia, and a dialogue at the political and expert levels has been pursued since 2002. The embassy provides follow-up of projects through the Norwegian Centre for Human Rights (UiO), UNICEF’s Juvenile Justice Reform programme and separate projects for human rights and good governance.

Norway also helps reinforce the anti-corruption institutions through comprehensive training activities, strengthening of civil society and policy design related to anti-corruption strategies.

Corruption also impedes the struggle to preserve the rainforests, and the Norwegian-Indonesian climate and forest partnership therefore gives high priority to the efforts to improve management of the forest sector.

The proportion of women in the national parliament declined by close to one percentage point after the 2014 elections. In the district and provincial parliaments, the number of women parliamentarians increased by 22 per cent in those nine provinces where UNDP is active with Norwegian support. In UNDP’s project provinces, the number of women in the district and provincial parliaments increased by 1.0 – 3.2 percentage points more than the national average.

The project has also trained 333 women parliamentarians in legislative processes, budgeting, control functions/oversight, communication and gender perspectives. Results from tests undertaken before and after the training courses show a 45 per cent increase in knowledge levels.

In cooperation with The Asia Foundation, Norway is working with issues pertaining to women and gender equality. Women parliamentarians and candidates have been better enabled to work effectively with budgeting processes, drafting of legislation, chairing meetings and gender equality.

Self-evaluations show that 70–80 per cent of those who have undergone training feel more competent after completion of the courses. Twenty local laws/regulations with strong gender-equality components have been adopted in the three project provinces. Stronger ties have been established between women parliamentarians and their electors.

In cooperation with the United Nations Development Programme (UNDP), Norway is helping incorporate a national strategy for access to justice into the national development plan for 2015–2019. Nine complaints systems for public services have been established, and service suppliers (hospitals etc.) are demonstrating an increasing ability to improve their services on the basis of complaints received.

Fewer children in prison

The Norwegian Embassy supports efforts by the United Nations Children’s Fund (UNICEF) and Indonesian authorities to develop a judicial system that conforms to the Convention on the Rights of the Child, replacing punitive sanctions with other alternatives. UNICEF has been the driving force behind the adoption of a new Indonesian law on children in the judicial system. After the law entered into force in 2014, the number of children in prison has decreased by 30 per cent. At the same time, a higher number of children who come into conflict with the law are now dealt with by other agencies than the courts, for example through conflict resolution councils and the social services.

Norway has supported the work of the organization HIVOS to develop school curricula on sexual and reproductive rights and implement them in schools. Altogether 140 teachers have been trained in applying the curricula. A network of young enthusiasts for better sexual education has been established and trained, and 10 700 students have received instruction in sexual and reproductive health, 7500 of whom in 2014.

Read more about development cooperation through

NGOs

Norad grants support to a number of NGOs with Indonesian partners. In 2013, this support amounted to NOK 52.7 million. Support is primarily granted to organizations working with climate and forest issues, including indigenous people’s rights. The main recipients of support include the Rainforest Foundation, The Nature Conservancy and CIFOR.

The Nature Conservancy has assisted a number of villages in Berau in Easter Borneo to prepare municipal and land-use plans. This has better enabled the local population to communicate priorities and requirements to the regional authorities as well as to logging and palm-oil companies. In some cases, this has helped prevent deforestation in the project areas. Click here to read the entire results example.

Published 28.08.2014
Last updated 02.10.2015