Indonesia on the Move

Ten years after the Asian Financial Crisis, Indonesia has re-emerged as a growing and confident middle-income country with increasing regional and global standing.

When I first moved to Indonesia a year ago, I saw a dynamic nation on the move just waiting to reap its full potential. The story of Indonesia is a story of perseverance. Ten years after the Asian Financial Crisis, Indonesia has re-emerged as a growing and confident middle-income country with increasing regional and global standing. This is a historic time for Indonesia and I’ve been fortunate enough to witness it first hand.

From my observation, Indonesia is progressing in the right direction. Important policy and institutional reforms have been undertaken. Its macroeconomic fundamentals continue to be strong and the country is weathering the global economic slowdown well.

But, going forward, there remains an unfinished agenda based on the need to make institutions more effective in delivering development results. So, while Indonesia is doing well on many fronts, it can do even better in the areas of poverty reduction, governance, the investment climate, delivery of some public services and infrastructure. To achieve more progress on these issues, Indonesia’s main challenge today is the need for more effective public institutions that work for the public interest to deliver public services and policies.

We recently launched a new partnership strategy for Indonesia that aims to help the government improve its existing programs and strengthen the institutions involved. When institutions are strengthened, the people win because budgets are then translated into more effective development outcomes: better schools, better health clinics, and better livelihoods for the people.

This new strategy offers a flexible, pragmatic framework to assist Indonesia’s own development agenda and will focus on supporting Indonesia’s own institutions and systems for good governance and stronger development outcomes. 

We aim to support successful, replicable, Government-led programs related to education, poverty reduction, community development and social protection, environmental sustainability and disaster mitigation, infrastructure, and private sector development. In addition the IFC—the World Bank Group’s private sector arm—will also play a key role in enhancing investment climate and large-scale infrastructure development. 

Overall, the strategy aims to help the country to move to the next phase of its ongoing transformation and use the World Bank Group’s resources to better meet Indonesia’s needs and aspirations as a middle-income country. It supports government efforts to raise Indonesia's performance further and allow it to take its rightful place among Southeast Asia’s most successful economies. 

Obviously, the World Bank Group is a small element in the overall scheme of things. At the end of the day, it is the Indonesians themselves that decides their future. I’m just glad we can play a supporting role in such an important moment in this nation’s history.