Australian Aid To Indonesia

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Indonesia is a neighbouring country to Australia and is an important partner in Australian bilateral, regional and global interests. A growing, prosperous and stable Indonesia is beneficial for regional stability, security, trade and cooperation in which Australia aims to ensure through foreign investment.
History

The Indonesian economy has recorded strong growth over the past few decades, and in recent years the firm pace of economic expansion has been accompanied by reduced output volatility and relatively stable inflation. Indonesia’s economic performance has been shaped by government policy, the country’s endowment of natural resources and its young and growing labour force. Alongside the industrialisation of its economy, …show more content…

This economic partnership with Indonesia will generate growth and distribute the reaped benefits to its people. Australia provides policy and technical advice that will improve the quality of Indonesia's investments in infrastructure, economic governance, human development and social policy.
Australia has cut its total foreign aid significantly over the past few years. This has been reflected by Australia giving proportionally less aid to Indonesia in comparison to other countries. Yet the total foreign direct investment into Indonesia from all countries has increased on average. As of 2015, Australian aid to Indonesia consists of 1.89% of the total aid given to Indonesia. This is a significant decrease from 2009, where Australia made up 9% of total Indonesian aid, as depicted in figure 1. Despite this, the bond between Indonesian and Australian trade has continued to increase, with Indonesia steadily importing more from Australia than Australia imports from Indonesia, which was reversed in 2007. This indicates that Australia is becoming of less importance to Indonesia in terms of foreign aid. The impact of decreasing the quantity of aid supplied is minor, as trade alliances between the two nations continue to prosper whilst Indonesian living standards are increasing. Indonesia is clearly becoming more independent, without the need of Australian …show more content…

By prioritising aid sectors such as effective governance and education, Australia is assisting in enabling Indonesia to be equipped with the means of self-dependency. Through increasing the primary school participation rate, the future leaders of Indonesia are better educated and society is more efficient. Although corruption is still increasing, the rate at which it increases is declining. Therefore, there is less corrupt officials and aid will be used in more effective ways. This self-dependency indicates that Australia’s aid is demanded less, accounting for Australia’s decreased proportional

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