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Australian aid to Indonesia effective says review



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MTAI59

Date: 19 November, 1992 No.

Australian aid to Indonesia effective says review

A recent internal review of Australian aid to Indonesia has found that the program is overwhelmingly successful in meeting its objectives, the Minister for Trade and Overseas Development, John Kerin, announced today.

The fundamental aim of the program is to promote economic and social development in Indonesia. "According to the review, training and educational development and activities in water supply and agriculture in the poorer eastern

provinces are the strongest in meeting developmental objectives," Mr Kerin said.

"Projects with a direct poverty focus are among the most successful. The review recommends that we continue our emphasis on these areas.

"The review found that the aid program has been valuable in maintaining bilateral relations, particularly through the student assistance programs," Mr Kerin said. "It also found that the program has generated significant commercial returns to Australia as well as fostering Indonesia as a market for Australian goods. For example, the limited data available shows that $413 million of Australian aid expenditure has led to purchases of nearly $1,000 million of Australian goods and services.

"Overseas aid is a risky business," Mr Kerin said. "The whole point of undertaking regular reviews of the effectiveness of programs is to find ways to improve them.

"Seventeen of the twenty one projects reviewed were found to be "effective" in meeting developmental objectives. These covered a number of sectors, including training and student activities, water supply and sanitation and agriculture."

However, the review team raised concerns about aspects of the remaining four projects. These were a geological mapping project, the provision of Australian advisers to Cipta Karya (Public Works), a railway communications project and a project supplying scientific equipment for universities in eastern Indonesia.

In all cases changes have been made to address these concerns.

Mr Kerin noted that the review team commented favourably on changes to the administration of the DIFF scheme.

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"The team expressed confidence that the substantial changes to the DIFF scheme address issues of concern such as lack of information on project performance and use of appropriate technology. For example, full scale feasibility studies are now required for all projects involving a DIFF grant of more than $1.5 million.

"In recognition of concerns about project sustainability, AIDAB now insists that detailed training plans are in place. These changes considerably enhance the developmental effectiveness of the D1FF scheme.

"The review team also made a number of positive suggestions on matters such as the student program and women in development issues. All recommendations are currently being implemented." -

Australian aid to Indonesia in 1992/93 will be worth about $120 million. The program concentrates on four main sectors: education and training, agriculture and rural development, provision of infrastructure and environmental management.

Indonesia has a population of about 180 million, of whom an estimated 30 million live in poverty. In rural areas, only about 36 per cent of people have access to safe drinking water.

The program focuses on eastern Indonesia, a poorer and less developed part of the country. For example, in west Nusa Tenggara province, an Australian project worth nearly $23 million is improving water supply and sanitation facilities. In east Nusa Tenggara province, Australia will produce a management

plan for a critically degraded river catchment.

The program includes sponsored training, under which more than 200 Indonesians undertake post graduate studies each year in Australian institutions.

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CANBERRA For further information contact AIDAB Public Affairs: Wendy Levy - (06) 276 4966 or ah (06) 247 8920 Cathy Walker - (06) 276 4960.