Recent comments on G20: “Indonesia’s aid unclear without aid agency” by Awidya Santikajaya

The G20 recently concluded its ninth summit in Brisbane, Australia. Although the Brisbane Summit, as with other G20 summits, was first and foremost dedicated to discussing the management of macroeconomic policy and global financial issues, there were also significant concerns about development cooperation.

In the leaders’ communique, the G20 members agreed to commit to development and to supporting a post-2015 development agenda. In this sense, Indonesia, which has a growing economic and diplomatic profile, could contribute more to global efforts toward development by setting up a special agency which was dedicated to administering its development cooperation provided to other countries.

The issue of Official Development Assistance (ODA) has been discussed intensively by G20 leaders. Tracing back to the second G20 Summit in London, members reaffirmed their commitment to meeting Millennium Development Goals and ODA pledges.

It is South Korea which should be credited with more systematically adding development issues to the G20. Since the release of the Seoul Development Consensus in 2010, the leaders have agreed to expand the group’s global development agenda, to protect low-income countries from the worst impact of financial crises.

Developing countries in the G20 have also risen as “emerging donors” in recent years. India for instance, has transformed itself from one of the largest recipients in the 1970s to a donor nation, providing around US$1.3 billion of foreign assistance in 2014. China has become the most important emerging donor in terms of geographical scope and financial capability.

China released its Foreign Aid White Paper in 2011 which confirmed that by the end of 2009 it had provided a total of 256.9 billion yuan ($39.3 billion) in aid. Brazil disbursed around $850 million of foreign aid in 2013.

Turkey has also become the fastest-growing emerging donor according to the OECD, providing $2.5 billion in 2012 of foreign aid.

Indonesia is also increasingly active in providing development aid. The Finance Ministry states the national budget for south-south and triangular cooperation has risen 32.32 percent from Rp 56.588 billion ($6.08 million) in 2013 to Rp 74.879 billion in 2014.

Compared to other developing countries, Indonesian ODA is still minimal. But that relatively small amount of aid could be due to poorly documented and consolidated aid activities. There are currently more than 16 government agencies in Indonesia that provide development aid to other countries. Each agency has a different approach, standards and procedures, which only makes Indonesian ODA less effective.

There have been many attempts to synergize various aid projects. In recent years, the Foreign Ministry’s Directorate of Technical Cooperation has positively coordinated technical assistance provided by various Indonesian agencies.

Nevertheless, Indonesia needs a more powerful body, rather than either a small directorate or ad-hoc teams assigned to consolidate its various aid programs.

As an emerging donor Indonesia should establish an aid agency. India set up its Development Partnership Administration in 2012, while South Africa, which is economically smaller than Indonesia, formed the South African Development Partnership Agency last year.

China does not have one, but several, ODA agencies, each closely linked with the government’s foreign policy strategy. Many non-G20 developing nations already operate foreign-aid agencies. Thailand has been operating the Thailand International Development Cooperation Agency since 2004. Chile has created the Chilean International Cooperation Agency, which delivers aid and technical assistance mainly to Latin American nations.

There are at least three reasons to set up an ODA agency.

First, through the ODA agency, Indonesia could consolidate its development assistance, which currently flows through various channels and agencies in an ad-hoc way.

Indonesia has a strong legacy as an initiator of south-south cooperation through its role as the host of the Asia-Africa Conference in 1955.

It is also an active player in triangular cooperation, which provides technical assistance to less-developed countries with funding from developed nations.

Its activities range from giving tractors to farmers in Vanuatu to providing Darmasiswa scholarships. But the lack of an aid agency has resulted in unclear goals and objectives in providing aid to other countries. Any goal is hard to measure because no single institution is tasked with conducting evaluation and monitoring.

Secondly, a dedicated aid agency would enable Indonesia to catch up more with development issues. Through the agency, Indonesia could offer its unique view of the current discourse and debate on global development cooperation, such as the relationship between donors and recipients, where developed and developing nations often have divergent stances.

The agency would also help Indonesia learn important aspects of aid management, such as aid effectiveness, from well-established development institutions, such as Australia’s AUSAID, the American USAID, Japan’s JICA and the World Bank. The agency could also serve as a single gateway for Indonesia to cooperate with other institutions in triangular cooperation.

Last but not least, to domestic constituents, the aid agency would ensure the transparency and accountability of Indonesia’s aid program. The agency could publish routine and comprehensive reports on how Indonesian money is spent on aid programs overseas. Currently, reports on Indonesia’s aid program are too scattered and difficult to account for.

Despite its existing status as an aid recipient and its interminable domestic challenges, Indonesia’s current robust economic growth has provided it with the opportunity to leverage its profile as a more active donor for south-south and triangular cooperation.

An aid agency would not only become a diplomatic tool to expand Indonesia’s influence, more importantly, it would enhance Indonesia’s contribution to strengthening global development as well as promoting aid effectiveness and fairness, which is consistent with Indonesia’s dynamic role in the post-2015 development agenda process in recent years.


The writer is a PhD candidate at the Australian National University in Canberra.


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