Watch Annual Meetings development events from Oct 16-19. Comment and engage with experts.Calendar of Events

Overview

  • The largest economy in Southeast Asia, Indonesia – a diverse archipelago nation of more than 300 ethnic groups – has charted impressive economic growth since overcoming the Asian financial crisis of the late 1990s. The country’s GDP per capita has steadily risen, from $823 in the year 2000 to $3,932 in 2018.

    Today, Indonesia is the world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing power parity, and a member of the G-20. An emerging lower middle-income country, Indonesia has made enormous gains in poverty reduction, cutting the poverty rate by more than half since 1999, to 9.8% in 2018.

    Despite heightened global uncertainty, Indonesia’s economic outlook continues to be positive, with domestic demand being the main driver of growth. Supported by robust investment, stable inflation, and a strong job market, Indonesia’s economic growth is forecast to reach 5.2% in 2019.

    Indonesia’s economic planning follows a 20-year development plan, spanning from 2005 to 2025. It is segmented into 5-year medium-term plans, called the RPJMN (Rencana Pembangunan Jangka Menengah Nasional) each with different development priorities. The current medium-term development plan – the third phase of the long-term plan – runs from 2015 to 2020. It focuses on, among others, infrastructure development and social assistance programs related to education and healthcare. Such shifts in public spending are enabled by reforms of long-standing energy subsidies, allowing for more investments in programs that directly impact the poor and near-poor.

    Considerable challenges remain in achieving Indonesia’s goals.

    Out of a population of around 264 million, about 25.9 million Indonesians still live below the poverty line. Based on March 2018 data, approximately 20.19% of the entire population remains vulnerable of falling into poverty, as their income hovers marginally above the national poverty line.

    While greater efforts are being made to improve basic public services, the quality of health clinics and schools is uneven by middle-income standards, contributing to concerning indicators, particularly in health.

    Approximately 1 in 3 children under the age of 5 suffer from stunting, which impairs brain development and will affect their future opportunities.

    Last Updated: Sep 25, 2019

  • The partnership between Indonesia and the World Bank has evolved over six decades to become one of the Bank’s most significant in terms of lending, knowledge services and implementation support. Since 2004, World Bank support for Indonesia has moved towards supporting a country-led and country-owned policy agenda, consistent with Indonesia’s status as a middle-income country.

    In December 2015, after broad consultations with government, civil society, and the private sector, the Board approved the 2016-2020 Country Partnership Framework (CPF) for Indonesia, aligned with the priorities of Indonesia’s medium-term development plan, the RPJMN.

    The CPF strategy’s main objective is supporting the government of Indonesia to: eliminate extreme poverty, generate prosperity and reduce inequality. The strategy is organized around six engagement areas which are supported by two pillars.

     

    Engagement areas:

    1.   Infrastructure

    2.   Sustainable and universal energy access

    3.   Maritime economy and connectivity

    4.   Delivery of local services

    5.   Sustainable landscape

    6.   Collecting more and spending better

     

    Supporting pillar:

    1.   Leveraging the private sector

    2.   Shared prosperity, equality and inclusion

    Last Updated: Sep 25, 2019

  • In 2011, The World Bank supported the development of two geothermal fields: Ulubelu in Lampung at the southern part of the Sumatra Island (capacity 110 MW), and Lahendong in North Sulawesi (capacity 40 MW). More recently, in 2017, the World Bank provided grants to support the Geothermal Energy Upstream Development Project, to support government-sponsored exploration drilling and facilitate investment in geothermal power generation. The government is also planning a new Geothermal Resource Risk Mitigation Facility to unlock investments through risk mitigation for exploration and early production drilling by providing exploration funding to geothermal developers. This would allow investors to prove sufficient resources to attract commercial finance for large-scale development. The facility is expected to lead to the development of more than 600 MW of new geothermal capacity.

    Promoting human capital is an important priority for Indonesia, and the Bank is helping improve education quality in rural and remote areas. The KIAT Guru program is empowering community participation and tying allowance payment to teachers’ performance. The program has been implemented in over 200 schools and community satisfaction on teacher presence has improved from 68% in 2016 to 90%, and teacher service performance from 55% to 91%.

    To break the cycle of poverty among Indonesia’s poorest, the World Bank supports the government’s Family Hope Program. Family development sessions and learning materials jointly developed with World Bank assistance are included in the program to help mothers have a better understanding of health and nutrition, good parenting practices, child protection and financial management. The program is currently helping 3.5 million families improve the education and health outcomes of their children, and the government plans to expand the program to reach 10 million families in 2020.

    The Generasi program provided incentivized block grants to communities to address three lagging Millennium Development Goals: maternal health, child health, and universal education. Generasi worked in over 5,000 villages throughout 11 provinces, reaching nearly 5 million people. Some of the program’s results include helping hundreds of thousands of children receive immunizations, addressing malnutrition, and ensuring that nearly 1 million pregnant women received iron supplements.

    The World Bank is also supporting the government’s PAMSIMAS program to provide clean water and sanitation services. Active across 33 provinces and almost 23,000 villages, PAMSIMAS is a collaboration between local governments and communities, and widely considered to be the most cost-effective option for scaling up water and sanitation services. Between 2006 and the end of 2018, 17.2 million have benefited from access to improved water facilities, and 15.4 million people with access to basic and improved sanitation.

    Today, Indonesia is comprised of more than 500 autonomous local governments that have the potential to accelerate growth in the districts. The Local Government Decentralized Project works with local governments in ensuring that the transfers allocated by the central government for infrastructure investments are well spent, with improvements in transparency and accountability. Strong government buy-in has followed, and the output-verification approach is now being scaled up to 30 provinces nationwide.

    Last Updated: Sep 25, 2019



LENDING

Indonesia: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments


PHOTO GALLERY

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In Depth

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Indonesia Human Capital Knowledge Series

Explore this page to learn more about why human capital is important for Indonesia and what the country needs to do.

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Indonesia Economic Quarterly Updates

Indonesia’s economy remains positive and future potential is even greater, but ongoing challenges and risks remain.

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Partners Through Time

Explore the Indonesia-World Bank partnership in this interactive timeline.

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Disaster Management

Safeguarding Indonesia’s development from increasing disaster risks.

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Project Map

Take a closer look at where our projects are located in Indonesia

Results Profiles

Take a look at what results the World Bank projects have achieved in Indonesia.

Open Data

The World Bank provides free and open access to a comprehensive set of data about development in countries around the globe, including Indonesia.

INDO-DAPOER

The Indonesia Database for Policy and Economic Research has sub-national data for almost 200 development indicators.

Additional Resources

Country Office Contacts

Jakarta, (+62-21) 5299-3000
Indonesia Stock Exchange Building, Tower 2, 12th Floor. Jl. Jenderal Sudirman Kav 52-53, Jakarta 12190
wbindonesia@worldbank.org
Washington, +1-202-473-4709
1818 H Street, N.W, Washington, DC 20433
eastasiapacific@worldbank.org